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ACQUISITIONS | 3 Months Ended
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Mar. 31, 2013
ACQUISITIONS [Abstract] |
ACQUISITIONS | 3. ACQUISITIONS 2013 Acquisition: On March 29, 2013, the Company acquired 100% of the outstanding shares of Transpower Technology (HK) Limited ("Transpower"), certain intellectual property and other tangible assets related to the Transpower magnetics business of TE Connectivity ("TE") for $22.4 million in cash and additional consideration including the assumption of $0.1 million in liabilities and the grant of a license to TE related to three of the Company's patents. The Company has accrued $7.2 million of additional consideration payable to TE related to a working capital adjustment at March 31, 2013. Transpower Technology (HK) Limited is the sole shareholder of Dongguan Transpower Electronic Products Co., Ltd. in the People's Republic of China. The operations acquired are now doing business as TRP Connector ("TRP"). The Company's purchase of the TRP magnetics business consisted of 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. During the three months ended March 31, 2013, the Company incurred $0.3 million of acquisition-related costs associated with TRP. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2013. While the initial accounting related to the TRP acquisition is not complete as of the filing date of this Form 10-Q, the following table depicts the Company's initial estimate of the acquisition date fair values of the consideration paid or payable and identifiable net assets acquired (in thousands):
|  | March 29, 2013 |  |
Cash |  | $ | 8,388 |  |
Accounts receivable |  |  | 11,580 |  |
Inventories |  |  | 6,258 |  | (a)
Other current assets |  |  | 1,953 |  |
Property, plant and equipment |  |  | 4,693 |  | (b)
Intangible assets |  |  | - |  | (c)
Other assets |  |  | 1,151 |  |
Total identifiable assets |  |  | 34,023 |  |
Accounts payable |  |  | (8,565 | ) |
Accrued expenses |  |  | (4,003 | ) |
Other current liabilities |  |  | (25 | ) |
Total liabilities assumed |  |  | (12,593 | ) |
Net identifiable assets acquired |  |  | 21,430 |  |
Goodwill |  |  | 8,278 |  | (d)
Net assets acquired |  | $ | 29,708 |  |
Cash paid |  | $ | 22,400 |  |
Assumption of severance payment |  |  | 109 |  |
Fair value of grant of license |  |  | - |  | (e)
Fair value of consideration transferred |  |  | 22,509 |  | (f)
Deferred consideration |  |  | 7,199 |  |
Total consideration paid/payable |  | $ | 29,708 |  |
(a) | The determination of fair value related to the inventory acquired was still in progress as of the date of this filing. The amount above represents only the carrying value of the inventory on TRP's balance sheet as of the acquisition date.
(b) | The appraisals related to machinery and equipment acquired were incomplete as of this filing date and as such, the amount noted above represents only the carrying value of those assets as of the acquisition date.
(c) | The Company has identified certain intangible assets related to the TRP acquisition, including technology, license agreements and customer lists, which are being valued by a third-party appraiser. These appraisals were not complete as of the date of this filing.
(d) | The amount of goodwill is provisional as of the filing date, as the fair value determination of inventory acquired, and appraisals related to property, plant and equipment and various intangible assets are still underway. As the final amount of goodwill has not yet been determined or allocated by segment, the Company is unable to determine at this time the portion of goodwill, if any, that will be deductible for tax purposes.
(e) | As part of the consideration transferred, the Company granteed Tyco a license related to three of the Company's patents. The valuation related to this license grant was not complete as of the date of this filing.
(f) | Deferred consideration represents the Company's estimate of a working capital adjustment which is payable to the seller. Such adjustment must be agreed upon between the Company and the seller, and has not yet been finalized as of the date of this filing.
There were no operations related to TRP between the March 29, 2013 acquisition date and March 31, 2013. As a result, TRP's results of operations had no impact on the Company's condensed consolidated statement of operations for the three months ended March 31, 2013. The preliminary fair values of net assets acquired, as noted above, are included in the Company's condensed consolidated balance sheet at March 31, 2013. The unaudited pro forma information below presents the combined operating results of the Company and TRP. 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 TRP acquisition; 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 TRP acquisition had occurred as of January 1, 2012, 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 TRP was completed as of January 1, 2012. The pro forma results noted below for the three months ended March 31, 2012 also assume the effects of the 2012 Acquisitions discussed below (dollars in thousands except per share data):
|  | Three Months Ended
|  | March 31,
|  | 2013 |  |  |  | 2012
Revenue | $ | 83,529 |  | $ |  | 86,410
Net earnings |  | 2,129 |  |  |  | 2,720
Earnings per Class A common share - basic and diluted |  | 0.18 |  |  |  | 0.22
Earnings per Class B common share - basic and diluted |  | 0.19 |  |  |  | 0.23
2012 Acquisitions: On March 9, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of GigaCom with a cash payment of $2.7 million (£1.7 million). GigaCom, 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 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 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 EBOSA® product. On September 12, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of 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, located near Milan, Italy, develops high-power AC-DC power conversion solutions targeted at the broadcasting market. The acquisition of Powerbox 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 three months ended March 31, 2013 and 2012, the Company incurred $0.1 million and less than $0.1 million, respectively, of acquisition-related costs relating to the 2012 Acquisitions. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2012. During the first quarter of 2013, the Company completed the purchase accounting related to its acquisitions of GigaCom and Fibreco. While the initial accounting related to the Powerbox acquisition is not complete as of the filing date of this Form 10-Q, the following table depicts the Company's estimated acquisition date fair values of the consideration transferred and identifiable net assets acquired related to the 2012 Acquisitions (in thousands):
|  |  |  |  | Measurement |  |  | Acquisition-Date |
|  | Acquisition-Date |  |  | Period |  |  | Fair Values |
|  | Fair Values |  |  | Adjustments (a) |  |  | (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 |
(a) There were no measurement period adjustments recorded during the three months ended March 31, 2013 related to the 2012 acquisitions.
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 three months ended March 31, 2013, the 2012 Acquisitions contributed $2.9 million of revenues and $0.8 million of net earnings to the Company. The 2012 Acquisitions had an immaterial contribution to the Company's revenues and net earnings during the first quarter of 2012.

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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. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1392-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1490-128463 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1383-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1486-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1500-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph 67-73 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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