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ACQUISITIONS | 12 Months Ended
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Dec. 31, 2012
ACQUISITIONS [Abstract] |
ACQUISITIONS |
2. | ACQUISITIONS
2012 Acquisitions: On March 9, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of GigaCom Interconnect AB ("GigaCom Interconnect") with a cash payment of $2.7 million (£1.7 million). GigaCom Interconnect, located in Gothenburg, Sweden, is a supplier of expanded beam fiber optic technology and a participant in the development of next-generation commercial aircraft components. GigaCom Interconnect has become part of Bel's Cinch Connector business. Management believes that GigaCom's offering of expanded beam fiber optic products will enhance the Company's position within the growing aerospace and military markets. On July 31, 2012, the Company consummated its acquisition of 100% of the issued and outstanding capital stock of Fibreco Ltd. ("Fibreco") with a cash payment, net of $2.7 million of cash acquired, of $13.7 million (£8.7 million). Fibreco, located in the United Kingdom, is a supplier of a broad range of expanded beam fiber optic components for use in military communications, outside broadcast and offshore exploration applications. Fibreco has become part of Bel's interconnect product group under the Cinch Connector business. Management believes that the addition of Fibreco's fiber optic-based product line to Cinch's broad range of copper-based products will increase Cinch's presence in emerging fiber applications within the military, aerospace and industrial markets. In addition, management believes the acquisition provides access to a range of customers for the recently acquired GigaCom Interconnect EBOSA® product. On September 12, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Powerbox Italia S.r.L. and its subsidiary, Powerbox Design (collectively "Powerbox"), with a cash payment, net of $0.2 million of cash acquired, of $3.0 million. The Company also granted 30,000 restricted shares of the Company's Class B common stock in connection with this acquisition. Compensation expense equal to the grant date fair value of these restricted shares of $0.6 million is being recorded ratably through September 2014. Powerbox Italy, located near Milan, Italy, develops high-power AC-DC power conversion solutions targeted at the broadcasting market. The acquisition of Powerbox Italy will allow Bel to expand its portfolio of power product offerings to include AC-DC products and will also establish a European design center located close to several of Bel's existing customers. During the year ended December 31, 2012, the Company incurred $0.8 million of acquisition-related costs relating to the 2012 Acquisitions. These costs are included in selling, general and administrative expense in the accompanying consolidated statement of operations for the year ended December 31, 2012. While the initial accounting related to the 2012 Acquisitions is not complete as of the filing date of this Form 10-K, the following table depicts the Company's estimated acquisition date fair values of the combined consideration transferred and identifiable net assets acquired in these transactions (in thousands):
|  |  |  |  | Measurement |  |  | Acquisition-Date |
|  | Acquisition-Date |  |  | Period |  |  | Fair Values |
|  | Fair Values |  |  | Adjustments |  |  | (As adjusted) |
Cash and cash equivalents |  | $ | 2,991 |  |  | $ | - |  |  | $ | 2,991 |
Accounts receivable |  |  | 3,750 |  |  |  | 224 |  |  |  | 3,974 |
Inventories |  |  | 1,061 |  |  |  | (16 | ) |  |  | 1,045 |
Other current assets |  |  | 90 |  |  |  | - |  |  |  | 90 |
Property, plant and equipment |  |  | 502 |  |  |  | 248 |  |  |  | 750 |
Intangible assets |  |  | 30 |  |  |  | 10,358 |  |  |  | 10,388 |
Total identifiable assets |  |  | 8,424 |  |  |  | 10,814 |  |  |  | 19,238 |
Accounts payable |  |  | (1,702 | ) |  |  | - |  |  |  | (1,702 | )
Accrued expenses |  |  | (1,736 | ) |  |  | - |  |  |  | (1,736 | )
Notes payable |  |  | (216 | ) |  |  | - |  |  |  | (216 | )
Income taxes payable |  |  | (264 | ) |  |  | (60 | ) |  |  | (324 | )
Deferred income tax liability, current |  |  | (70 | ) |  |  | - |  |  |  | (70 | )
Deferred income tax liability, noncurrent |  |  | - |  |  |  | (2,297 | ) |  |  | (2,297 | )
Other long-term liabilities |  |  | (216 | ) |  |  | - |  |  |  | (216 | )
Total liabilities assumed |  |  | (4,204 | ) |  |  | (2,357 | ) |  |  | (6,561 | )
Net identifiable assets acquired |  |  | 4,220 |  |  |  | 8,457 |  |  |  | 12,677 |
Goodwill |  |  | 17,965 |  |  |  | (8,241 | ) |  |  | 9,724 |
Net assets acquired |  | $ | 22,185 |  |  | $ | 216 |  |  | $ | 22,401 |
Cash paid |  | $ | 22,138 |  |  |  | 263 |  |  | $ | 22,401 |
Deferred consideration |  |  | 47 |  |  |  | (47 | ) |  |  | - |
Fair value of consideration transferred |  | $ | 22,185 |  |  | $ | 216 |  |  | $ | 22,401 |
Subsequent to the respective acquisition dates of the 2012 Acquired Companies, the Company received additional information related to the Acquisition Date fair values of the net assets acquired. These updates to the purchase price allocation are noted as measurement period adjustments in the above table. While the purchase price allocations related to GigaCom and Fibreco are substantially complete, the allocations are currently under review and are subject to change. The purchase price allocation related to Powerbox Italia was not yet complete as of the filing date of this Annual Report. The Company expects to finalize the purchase price allocations as soon as practicable, but no later than one year from the respective acquisition dates. During the ongoing valuation process, the Company is utilizing the income, cost, and market approaches in determining the fair values of the assets acquired and liabilities assumed. The fair value measurements are primarily based on significant inputs that are not observable in the market. The income approach is primarily being utilized to value the intangible assets, consisting primarily of trademarks, customer relationships and technology. The income approach indicates value for a subject asset based on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a required market rate of return that reflects the relative risk of achieving the cash flows and the time value of money. The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, is being utilized as appropriate for property, plant and equipment. The cost to replace a given asset reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation. The fair value of property, plant and equipment (as adjusted) acquired from the 2012 Acquired Companies consists solely of machinery and equipment with an acquisition-date fair value of $0.8 million and a weighted-average useful life of 5 years. The fair value of identifiable intangible assets noted above (as adjusted) consists of the following:
| Weighted-Average Life |  | Acquisition-Date Fair Value |
Trademarks | Indefinite |  | $ | 1,264 |
Technology | 20 years |  |  | 5,464 |
Customer relationships | 16 years |  |  | 3,142 |
Non-compete agreements | 2 years |  |  | 518 |
Total identifiable intangible assets acquired |  |  | $ | 10,388 |
The Company is also still in the process of determining the allocation of the goodwill by reportable operating segment. This allocation will be based on those reportable operating segments expected to benefit from the 2012 Acquisitions. The Company is uncertain at this time how much of the goodwill, if any, will be deductible for tax purposes. For purposes of the 2012 annual goodwill impairment test, the Company has tentatively allocated all of the goodwill associated with the 2012 Acquisitions to the Company's Europe operating segment. The results of operations of the 2012 Acquired Companies have been included in the Company's consolidated financial statements for the periods subsequent to their respective acquisition dates. During the year ended December 31, 2012, the 2012 Acquisitions contributed revenues of $3.2 million and estimated net earnings of $0.2 million to the Company since their respective acquisition dates. The unaudited pro forma information below presents the combined operating results of the Company and the 2012 Acquired Companies. The unaudited pro forma results are presented for illustrative purposes only. They do not reflect the realization of any potential cost savings, or any related integration costs. Certain cost savings may result from the 2012 Acquisitions; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have actually been obtained if the 2012 Acquisitions had occurred as of January 1, 2011, nor is the pro forma data intended to be a projection of results that may be obtained in the future. The following unaudited pro forma consolidated results of operations assume that the acquisition of the 2012 Acquired Companies was completed as of January 1, 2011 (dollars in thousands except per share data):
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |
Revenue |  | $ | 293,948 |  |  | $ | 304,189 |
Net earnings |  |  | 3,465 |  |  |  | 4,623 |
Earnings per Class A common share - basic and diluted |  |  | 0.26 |  |  |  | 0.36 |
Earnings per Class B common share - basic and diluted |  |  | 0.30 |  |  |  | 0.40 |
On November 28, 2012, the Company entered into a Stock and Asset Purchase Agreement with Tyco Electronics Corporation pursuant to which the Company has agreed to acquire the Transpower magnetics business of TE from Tyco Electronics Corporation for approximately $22.4 million in cash. Included in the Company's purchase of the Transpower magnetics business are the integrated connector module ("ICM") family of products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21 and RJ.5, a line of modules for smart-grid applications and discrete magnetics. Bel will also receive a license to produce ICM products using TE's planar embedded magnetics technology. This acquisition is expected to close at the end of the first quarter of 2013. 2010 Acquisition of Cinch: On January 29, 2010 (the "Acquisition Date"), the Company completed its acquisition of 100% of the issued and outstanding capital stock of Cinch from Safran S.A. Bel paid $39.7 million in cash and assumed an additional $0.8 million of expenses in exchange for the net assets acquired. The transaction was funded with cash on hand. Cinch is headquartered in Lombard, Illinois and had manufacturing facilities in Vinita, Oklahoma; Reynosa, Mexico; and Worksop, England at the time of its acquisition. Cinch manufactures a broad range of interconnect products for customers in the military and aerospace, high-performance computing, telecom/datacom, and transportation markets. The addition of Cinch's well-established lines of connector and cable products and extensive clientele has enabled Bel to broaden its customer base to include aerospace and military markets. The acquisition of Cinch has also created the opportunity for expense reduction and the elimination of redundancies. The combination of these factors has given rise to $2.3 million of goodwill ($1.2 million allocated to the Company's North America operating segment and $1.1 million allocated to the Company's Europe operating segment). During the year ended December 31, 2010, the Company expensed $0.3 million of acquisition-related costs. These costs are included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. 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