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Business Combinations

6 Months Ended

Sep. 30, 2022

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

BUSINESS COMBINATION

Acquisition of Shank's Extracts, LLC

On October 4, 2021, the Company acquired 100% of the capital stock of Shank's Extracts, LLC. (“Shank's”), a flavors and extracts processing company, for approximately $100 million in cash and $2.4 million of additional working capital on-hand at the date of acquisition. The acquisition of Shank's diversifies the Company's product offerings and generates new opportunities for its plant-based ingredients platform.

A portion of the goodwill recorded as part of the acquisition was attributable to the assembled workforce of Shank's. The goodwill and intangibles recognized for the Shank's acquisition are deductible for U.S. income tax purposes. The transaction was treated as an asset acquisition for U.S. Federal tax purposes, resulting in a step-up of tax basis to fair value. The Company determined the Shank's operations are not material to the Company’s consolidated results. Therefore, pro forma information is not presented.

For the fiscal year ended March 31, 2022, the Company incurred $2.3 million of acquisition-related transaction costs for the purchase of Shank's. The acquisition-related costs were expensed as incurred and recorded in selling, general, and administrative expense on the consolidated statements of income.

In November 2021, the Company acquired the land and buildings utilized by Shank's operations for $13.3 million. The purchase of the land and buildings resulted in the elimination of the $8.5 million operating lease right-of-use asset and lease liability recognized on the acquisition date for Shank's.

The following table summarizes the final purchase price allocation of the assets acquired and liabilities assumed for the Shank's acquisition.

(in thousands of dollars)
			Shank's
			October 4, 2021
Assets
Cash and cash equivalents			$	754
Accounts receivable, net			6,643
Inventory			15,792
Other current assets			415
Property, plant and equipment (net)			11,000
Operating lease right-of-use assets			8,531
Intangibles
Customer relationships			24,000
Developed technology			4,500
Non-compete agreements			3,000
Goodwill			41,061
Total assets acquired			115,696
Liabilities
Accounts payable and accrued expenses			6,159
Customer advances and deposits			351
Accrued compensation			655
Current portion of operating lease liabilities			8,531
Total liabilities assumed			15,696
Total assets acquired and liabilities assumed			$	100,000

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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 https://asc.fasb.org/topic&trid=2303972

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 5
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472

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X

- References

No definition available.

+ Details

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