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Acquisitions | 6 Months Ended
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Jul. 03, 2022
Acquisitions [Abstract] |
Acquisitions | Note 3. Acquisitions Normerica Inc. On July 26, 2021, the Company completed the acquisition of Normerica Inc., a leading North American supplier of premium pet care products. Normerica has production facilities in Canada, the U.S. and Thailand. As a leader in the pet product industry, Normerica provides premium products, both branded and private label to world-class retailers. Its product portfolio consists primarily of bentonite-based cat litter products which are supplied from a network of strategically located manufacturing facilities in Canada and the United States. The results of Normerica are included within our Household, Personal Care & Specialty Products product line in our Performance Materials segment. The fair value of the total consideration transferred, net of cash acquired, was $187.5 million. The acquisition has been accounted for using the acquisition method of accounting, which requires, among other things, that we recognize the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. As of July 3, 2022, the purchase price allocation remains preliminary as the Company completes its assessment of property, certain reserves, legal and tax matters, obligations, intangible assets and deferred taxes, as well as completes its review of Normerica’s existing accounting policies. The following table summarizes the Company's preliminary purchase price allocation for the Normerica acquisition as previously reported on the Company's Form 10-K for the year ended December 31, 2021. There have been no changes to the purchase price allocation during the period ended July 3, 2022.
(millions of dollars) |  | Preliminary Allocation Previously Reported on Form 10-K as of July 3, 2022 |
Accounts receivable |  | $ | 8.4 |
Inventories |  |  | 5.1 |
Other current assets |  |  | 1.4 |
Property, plant and equipment |  |  | 21.2 |
Goodwill |  |  | 104.5 |
Intangible assets |  |  | 68.1 |
Total assets acquired |  |  | 208.7 |
Accounts payable |  |  | 12.8 |
Accrued expenses |  |  | 8.4 |
Total liabilities assumed |  |  | 21.2 |
Net assets acquired |  | $ | 187.5 |
The Company used the income, market, or cost approach (or a combination thereof) for the valuation and used valuation inputs and analyses that were based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. For certain items, the carrying value was determined to be a reasonable approximation of fair value based on the information available. Goodwill was calculated as the excess of the consideration transferred over the assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill is primarily attributable to fair value of expected synergies from combining the MTI and Normerica businesses and will be allocated to the Performance Materials segment. The allocation was completed during the third quarter of 2022. Intangible assets acquired mainly include tradenames and customer relationships. Tradenames have an estimated useful life of approximately 15 years and customer relationships have an estimated useful life of approximately 20 years. The Company incurred $2.6 million and $4.2 million of acquisition related transaction and integration costs during the three and six-month periods ended July 3, 2022 and $0.4 million in the three and six-months period ended July 4, 2021, which are reflected within the acquisition-related expense line of the Condensed Consolidated Statements of Income. Concept Pet Heimtierprodukte GmbH On April 29, 2022, the Company completed the acquisition of Concept Pet Heimtierprodukte GmbH ("Concept Pet"), a European supplier of pet litter products. The purchase of Concept Pet supports the expansion of our European pet care business, as well as provides additional mineral reserves. The purchase price was $28.0 million and acquisition was financed through cash on hand. The fair value of the total consideration transferred, net of cash acquired, was $22.3 million. The results of Concept Pet are included in our Performance Materials segment. The acquisition has been accounted for using the acquisition method of accounting, which requires, among other things, that we recognize the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The Company has recorded goodwill of $9.2 million and intangible assets of $4.3 million relating to this acquisition.

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