XML 46 R10.htm IDEA: XBRL DOCUMENT v2.4.0.6
Business Acquisitions
 12 Months Ended
Dec. 31, 2011
Business Acquisitions [Abstract]  
Business Acquisitions
2.
Business Acquisitions

In April 2011, we acquired the Engine Controls business of BLD Products, Ltd., a subsidiary of Qualitor Inc., for $27 million in cash funded by our revolving line of credit.  As part of the acquisition, we acquired certain assets and assumed certain liabilities of BLD's Engine Controls business in Holland, Michigan, and acquired 100% of the equity of Novo Products Inc. located in Ocala, Florida.  The acquired business is a manufacturer of a range of products including fuel pressure regulators, air by-pass valves, idle air control valves, and PCV valves.  Revenues generated from the acquired business were approximately $18 million for the year-ended December 31, 2010, of which approximately 40% of the volume was sold to us.
 
In October 2011, we acquired all of the capital stock of Forecast Trading Corporation for $44.3 million in cash funded by our revolving credit facility.  Forecast has distribution facilities in Ft. Lauderdale, Florida and distributes a range of engine management products including ignition coils, ignition modules, switches and sensors, and filters.  Revenues generated from the acquired business were approximately $28 million for the year ended December 31, 2010.

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values (in thousands):

   
BLD
Products, Ltd.
  
Forecast Trading
Corporation
 
Purchase price
    $26,984     $44,250 
Assets acquired and liabilities assumed:
              
Receivables
 $1,944      $6,300     
Inventory
  3,826       10,120     
Other current assets (1)
  3       700     
Property, plant and equipment, net
  1,965       3,840     
Other assets
  -       10     
Intangible assets
  7,200       15,300     
Goodwill
  12,867       11,820     
Current liabilities
  (821)      (3,840)    
Net assets acquired
     $26,984      $44,250 

 
(1)
The other current assets balance for Forecast Trading Corporation includes $0.7 million of cash acquired.

Intangible assets acquired in the BLD Products, Ltd. acquisition of $7.2 million consists of customer relationships that will be amortized on a straight-line basis over the estimated useful life of 10 years.  Intangible assets acquired in the Forecast acquisition of $15.3 million consists of customer relationships of $13.8 million that will be amortized on a straight-line basis over the estimated useful lives of 7-10 years; trademarks and trade names of $0.8 million that will be amortized on a straight-line basis over the estimated useful life of 10 years; and non-compete agreements of $0.7 million that will be amortized on a straight-line basis over the estimated useful life of 5 years.  Goodwill related to the BLD Products, Ltd. and Forecast Trading Corporation acquisitions of $12.9 million and $11.8 million, respectively, was allocated to the Engine Management Segment and is deductible for income tax purposes.  The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce associated with personal reputations, as well as the value of expected synergies.
 
Aggregated revenues included in our consolidated statement of operations for the BLD Products, Ltd. and Forecast Trading Corporation acquisitions totaled $11.8 million from the date of acquisition through December 31, 2011.

Pro Forma Information (Unaudited)

The following table summarizes certain supplemental unaudited pro forma financial information which was prepared as if the acquisitions of BLD Products, Ltd. and Forecast Trading Corporation described above had occurred as of January 1, 2010.  The unaudited pro forma financial information was prepared for comparative purposes only and does not purport to be indicative of what would have occurred had the acquisitions been made at that time or of results which may occur in the future.  Supplemental unaudited pro forma financial information for the acquisitions is as follows (in thousands):

   
December 31, 2011
  
December 31, 2010
 
   
Reported
  
Pro Forma
  
Reported
  
Pro Forma
 
              
Revenues
 $874,625  $903,647  $810,910  $849,006 
Net earnings
  62,401   64,277   21,960   21,997