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Acquisitions (Notes) | 12 Months Ended
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Dec. 31, 2017
Business Combinations [Abstract] |
Acquisitions |
7. | Acquisitions and Divestitures
Waterstar During the third quarter of 2018, we sold substantially all of the assets of our Waterstar business for $4,000 in cash. The resulting gain was approximately $1,000 and is reflected within Selling and Administrative Expense in operating profit in our Consolidated Statements of Operations. IP Cleaning S.p.A. On April 6, 2017, we acquired nearly 100 percent of the outstanding capital stock of IPC Group for a purchase price of $353,769, net of cash acquired of $8,804. The primary seller was Ambienta SGR S.p.A., a European private equity fund. IPC Group, based in Italy, is a designer and manufacturer of innovative professional cleaning equipment, cleaning tools and supplies. The acquisition strengthens our presence and market share in Europe and will allow us to better leverage our EMEA cost structure. We funded the acquisition of IPC Group, along with related fees, including refinancing of existing debt, with funds raised through borrowings under a senior secured credit facility in an aggregate principal amount of $420,000. Further details regarding our acquisition financing arrangements are discussed in Note 11. The following table summarizes the final fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:
ASSETS |
Receivables | $ | 39,984 |
Inventories | 46,442 |
Other Current Assets | 7,456 |
Assets Held for Sale | 2,247 |
Property, Plant and Equipment | 63,890 |
Intangible Assets Subject to Amortization: |
Trade Name | 26,753 |
Customer Lists | 123,061 |
Technology | 9,631 |
Other Assets | 2,000 |
Total Identifiable Assets Acquired | 321,464 |
LIABILITIES |
Accounts Payable | 32,227 |
Accrued Expenses | 18,130 |
Deferred Income Taxes | 56,950 |
Other Liabilities | 10,964 |
Total Identifiable Liabilities Assumed | 118,271 |
Net Identifiable Assets Acquired | 203,193 |
Noncontrolling Interest | (1,896 | )
Goodwill | 152,472 |
Total Estimated Purchase Price, net of Cash Acquired | $ | 353,769 |
Based on the final fair value measurement of the assets acquired and liabilities assumed, we allocated $152,472 to goodwill for the expected synergies from combining IPC Group with our existing business. None of the goodwill is expected to be deductible for income tax purposes. In connection with the finalization of the fair value measurements in the first quarter of 2018, we recorded a measurement period adjustment, which increased goodwill by $4,627 with offsetting adjustments to various income tax assets and liabilities. The final fair value of the acquired intangible assets is $159,445. The expected lives of the acquired amortizable intangible assets are approximately 15 years for customer lists, 10 years for trade names and 10 years for technology. Trade names are being amortized on a straight-line basis while the customer lists and technology are being amortized on an accelerated basis. We recorded amortization expense of $20,794 in Selling and Administrative Expense on our Consolidated Statements of Operations for these acquired intangible assets for the twelve months ended December 31, 2018. The following unaudited pro forma financial information presents the combined results of operations of Tennant Company as if the acquisition of IPC Group had occurred as of January 1, 2016:
Years ended December 31 | 2017 |  | 2016
Net Sales |  |  |
Pro forma | $ | 1,057,127 |  |  | $ | 1,013,710 |
As reported | 1,003,066 |  |  | 808,572 |
Net Earnings (Loss) Attributable to Tennant Company |  |  |
Pro forma | $ | 12,288 |  |  | $ | 30,412 |
As reported | (6,195 | ) |  | 46,614 |
Net Earnings (Loss) Attributable to Tennant Company per Diluted Share |  |  |
Pro forma | $ | 0.68 |  |  | $ | 1.69 |
As reported | (0.35 | ) |  | 2.59 |
The unaudited pro forma financial information is presented for informational purposes only. It is not necessarily indicative of what our consolidated results of operations actually would have been had the acquisition occurred at the beginning of each year, nor does it attempt to project the future results of operations of the combined company. The unaudited pro forma financial information above gives effect to the following:
• | Incremental depreciation and amortization expense related to the fair value of the property, plant and equipment and identified intangible assets;
• | Exclusion of the purchase accounting impact of the inventory step-up related to the sale of acquired inventory;
• | Incremental interest expense related to additional debt used to finance the acquisition;
• | Exclusion of non-recurring acquisition-related transaction and financing costs; and
• | Pro forma adjustments tax affected based on the jurisdiction where the costs were incurred.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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