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ACQUISITIONS | 12 Months Ended
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Dec. 31, 2013
ACQUISITIONS [Abstract] |
ACQUISITIONS |
2. | ACQUISITIONS
2013 Acquisitions: On March 29, 2013, the Company completed its acquisition of TRP for $21.0 million, net of cash acquired. The Company’s purchase of TRP 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. On August 20, 2013, the Company completed its acquisition of Array, a manufacturer of aerospace and mil-spec connector products based in Miami, Florida, for $10.0 million in cash. The acquisition of Array expands the Company’s portfolio of connector products that can be offered to the combined customer base, and provides an opportunity to sell other products that Bel manufactures to Array’s customers. Array has become part of Bel’s Cinch Connector business. During the years ended December 31, 2013 and 2012, the Company incurred $0.7 million and $0.5 million, respectively, of acquisition-related costs associated with the 2013 Acquisitions. These costs are included in selling, general and administrative expense in the accompanying consolidated statements of operations for the year ended December 31, 2013 and 2012. While the initial accounting related to the acquisitions of TRP and Array is not complete as of the filing date of this Annual Report on Form 10-K, the following table depicts the Company’s current estimate of the respective acquisition date fair values of the consideration paid and identifiable net assets acquired (in thousands):
|  | TRP |  |  | Array |  |  | 2013 Acquisitions |
|  |  |  |  | Measurement |  |  | March 29, |  |  |  |  |  | Measurement |  |  | August 20, |  |  | Acquisition-Date |
|  | March 29, |  |  | Period |  |  | 2013 |  |  | August 20, |  |  | Period |  |  | 2013 |  |  | Fair Values |
|  | 2013 |  |  | Adjustments |  |  | (As adjusted) |  |  | 2013 |  |  | Adjustments |  |  | (As adjusted) |  |  | (As adjusted) |
Cash |  | $ | 8,388 |  |  | $ | (29 | ) |  | $ | 8,359 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 8,359 |
Accounts receivable |  |  | 11,580 |  |  |  | (39 | ) |  |  | 11,541 |  |  |  | 994 |  |  |  | - |  |  |  | 994 |  |  |  | 12,535 |
Inventories |  |  | 6,258 |  |  |  | 1,097 |  |  |  | 7,355 |  |  |  | 2,588 |  |  |  | (1,595 | ) |  |  | 993 |  |  |  | 8,348 |
Other current assets |  |  | 1,953 |  |  |  | (181 | ) |  |  | 1,772 |  |  |  | 83 |  |  |  | 345 |  |  |  | 428 |  |  |  | 2,200 |
Property, plant and equipment |  |  | 4,693 |  |  |  | 1,097 |  |  |  | 5,790 |  |  |  | 2,285 |  |  |  | 1,225 |  |  |  | 3,510 |  |  |  | 9,300 |
Intangible assets |  |  | - |  |  |  | 6,110 |  |  |  | 6,110 |  |  |  | - |  |  |  | 1,470 |  |  |  | 1,470 |  |  |  | 7,580 |
Other assets |  |  | 1,151 |  |  |  | 84 |  |  |  | 1,235 |  |  |  | 84 |  |  |  | 1,663 |  |  |  | 1,747 |  |  |  | 2,982 |
Total identifiable assets |  |  | 34,023 |  |  |  | 8,139 |  |  |  | 42,162 |  |  |  | 6,034 |  |  |  | 3,108 |  |  |  | 9,142 |  |  |  | 51,304 |
Accounts payable |  |  | (8,565 | ) |  |  | 331 |  |  |  | (8,234 | ) |  |  | (677 | ) |  |  | 1 |  |  |  | (676 | ) |  |  | (8,910 | )
Accrued expenses |  |  | (4,003 | ) |  |  | (219 | ) |  |  | (4,222 | ) |  |  | (206 | ) |  |  | (79 | ) |  |  | (285 | ) |  |  | (4,507 | )
Other current liabilities |  |  | (25 | ) |  |  | (791 | ) |  |  | (816 | ) |  |  | (214 | ) |  |  | 214 |  |  |  | - |  |  |  | (816 | )
Noncurrent liabilities |  |  | - |  |  |  | (586 | ) |  |  | (586 | ) |  |  | (643 | ) |  |  | (1,105 | ) |  |  | (1,748 | ) |  |  | (2,334 | )
Total liabilities assumed |  |  | (12,593 | ) |  |  | (1,265 | ) |  |  | (13,858 | ) |  |  | (1,740 | ) |  |  | (969 | ) |  |  | (2,709 | ) |  |  | (16,567 | )
Net identifiable assets acquired |  |  | 21,430 |  |  |  | 6,874 |  |  |  | 28,304 |  |  |  | 4,294 |  |  |  | 2,139 |  |  |  | 6,433 |  |  |  | 34,737 |
Goodwill |  |  | 8,278 |  |  |  | (7,234 | ) |  |  | 1,044 |  |  |  | 5,666 |  |  |  | (2,094 | ) |  |  | 3,572 |  |  |  | 4,616 |
Net assets acquired |  | $ | 29,708 |  |  | $ | (360 | ) |  | $ | 29,348 |  |  | $ | 9,960 |  |  | $ | 45 |  |  | $ | 10,005 |  |  | $ | 39,353 |
Cash paid |  | $ | 22,400 |  |  | $ | 6,948 |  |  | $ | 29,348 |  |  | $ | 9,960 |  |  | $ | 45 |  |  | $ | 10,005 |  |  | $ | 39,353 |
Assumption of severance payment |  |  | 109 |  |  |  | (109 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Fair value of consideration |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
transferred |  |  | 22,509 |  |  |  | 6,839 |  |  |  | 29,348 |  |  |  | 9,960 |  |  |  | 45 |  |  |  | 10,005 |  |  |  | 39,353 |
Deferred consideration |  |  | 7,199 |  |  |  | (7,199 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total consideration paid |  | $ | 29,708 |  |  | $ | (360 | ) |  | $ | 29,348 |  |  | $ | 9,960 |  |  | $ | 45 |  |  | $ | 10,005 |  |  | $ | 39,353 |
The measurement period adjustments noted above primarily relate to adjustments to fair value based on the preliminary appraisals on inventory, property, plant and equipment, and intangible assets. Various other asset and liability accounts had measurement period adjustments related to deferred taxes. The preliminary fair value of identifiable intangible assets related to the 2013 Acquired Companies is shown in the table below (dollars in thousands). For those intangible assets with finite lives, the acquisition-date fair values will be amortized over their respective estimated future lives utilizing the straight-line method.
| Weighted-Average Life |  | Acquisition-Date Fair Value |
Trademarks | Indefinite |  | $ | 40 |
Technology | 22 years |  |  | 1,540 |
Customer relationships | 17.5 years |  |  | 5,840 |
Non-compete agreements | 2 years |  |  | 160 |
Total identifiable intangible assets acquired |  |  | $ | 7,580 |
The results of operations of the 2013 Acquired Companies have been included in the Company’s consolidated financial statements for the period subsequent to their respective acquisition dates. During the year ended December 31, 2013, the 2013 Acquired Companies contributed $68.6 million of revenue and $9.2 million of net earnings to the Company’s consolidated financial results. The unaudited pro forma information below presents the combined operating results of the Company and the 2013 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 2013 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 2013 Acquisitions 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 acquisitions of the 2013 Acquired Companies were completed as of January 1, 2012. The pro forma results noted below for 2012 also include the effects of the 2012 Acquisitions discussed below. The 2013 unaudited pro forma net earnings were adjusted to exclude $0.9 million ($0.6 million after tax)of acquisition-related costs incurred in 2013 and $0.4 million ($0.4 million after tax) of nonrecurring expense related to the fair value adjustments to acquisition-date inventory. The 2012 unaudited pro forma net earnings were adjusted to include these charges (dollars in thousands except per share data):
|  | Year Ended December 31, |
|  | 2013 |  |  | 2012 |
Revenue |  | $ | 374,153 |  |  | $ | 376,921 |
Net earnings |  |  | 17,774 |  |  |  | 8,800 |
Earnings per Class A common share - basic and diluted |  |  | 1.48 |  |  |  | 0.69 |
Earnings per Class B common share - basic and diluted |  |  | 1.58 |  |  |  | 0.76 |
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. GigaCom has become part of Bel’s Cinch Connector business. Management believes that GigaCom’s offering of expanded beam fiber optic (“EBOSA®”) products will enhance the Company’s position within the growing aerospace and military markets. On July 31, 2012, the Company completed 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, now known as Bel Power Europe, 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. Bel Power Europe, located near Milan, Italy, develops high-power AC-DC power conversion solutions targeted at the broadcasting market. The acquisition of Bel Power Europe 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 years ended December 31, 2013 and 2012, the Company incurred $0.2 million and $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 statements of operations for the year ended December 31, 2012. During the year ended December 31, 2012, the Company completed the purchase accounting related to the GigaCom and Fibreco acquisitions. During the third quarter of 2013, the Company completed the purchase accounting related to its acquisition of Bel Power Europe. The following table reflects the finalized 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 |  |  | (As finalized) |
Cash and cash equivalents |  | $ | 2,991 |  |  | $ | - |  |  | $ | 2,991 |
Accounts receivable |  |  | 3,750 |  |  |  | 3 |  |  |  | 3,753 |
Inventories |  |  | 1,061 |  |  |  | (16 | ) |  |  | 1,045 |
Other current assets |  |  | 90 |  |  |  | - |  |  |  | 90 |
Property, plant and equipment |  |  | 502 |  |  |  | 263 |  |  |  | 765 |
Intangible assets |  |  | 30 |  |  |  | 11,626 |  |  |  | 11,656 |
Total identifiable assets |  |  | 8,424 |  |  |  | 11,876 |  |  |  | 20,300 |
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 |  |  | - |  |  |  | (2,700 | ) |  |  | (2,700 | )
Other long-term liabilities |  |  | (216 | ) |  |  | - |  |  |  | (216 | )
Total liabilities assumed |  |  | (4,204 | ) |  |  | (2,760 | ) |  |  | (6,964 | )
Net identifiable assets acquired |  |  | 4,220 |  |  |  | 9,116 |  |  |  | 13,336 |
Goodwill |  |  | 17,965 |  |  |  | (8,900 | ) |  |  | 9,065 |
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 |
The fair value of identifiable intangible assets related to the 2012 Acquired Companies is shown in the table below (dollars in thousands). For those intangible assets with finite lives, the acquisition-date fair values will be amortized over their respective estimated future lives utilizing the straight-line method.
| Weighted-Average Life |  | Acquisition-Date Fair Value |
Trademarks | Indefinite |  | $ | 1,264 |
Technology | 20 years |  |  | 6,542 |
Customer relationships | 16 years |  |  | 3,292 |
Non-compete agreements | 2 years |  |  | 558 |
Total identifiable intangible assets acquired |  |  | $ | 11,656 |
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 years ended December 31, 2013 and 2012, Fibreco and Bel Power Europe contributed combined revenues of $10.7 million and $3.1 million, respectively, and combined net earnings of $1.0 million and $0.2 million, respectively, to the Company’s consolidated financial results. The acquisition of GigaCom has contributed to Bel’s research and development efforts, and its technology has been incorporated into products now being sold by Fibreco. GigaCom incurred expenses, primarily related to research and development, of $1.0 million and $0.6 million during the years ended December 31, 2013 and 2012, respectively.

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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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