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Business Acquisitions | 6 Months Ended
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Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
Business Acquisitions | Business Acquisitions Neenah On March 28, 2022, the Company entered into an Agreement and Plan of Merger to combine with Neenah, Inc. ("Neenah"), a specialty materials company incorporated in Delaware, in an all-stock merger of equals (the "Merger Agreement"). The Merger was approved by the shareholders of both the Company and Neenah on June 29, 2022 and was consummated on July 6, 2022. Under the terms of the Merger Agreement, which was unanimously approved by the board of directors of both companies, Neenah merged into a directly owned subsidiary of the Company, with Neenah surviving the Merger as a direct, wholly-owned subsidiary of Mativ. Pursuant to the Merger Agreement, each share of Neenah's common stock outstanding was exchanged for 1.358 shares of common stock in the Company. As such, the Company issued approximately 22.8 million shares of its common stock to Neenah's shareholders under the terms of the Merger Agreement. Based on the Company's closing stock price on July 5, 2022, the total value of shares issued to Neenah's shareholders was approximately $534.0 million. During the three months and six months ended June 30, 2022, the Company recognized direct and indirect costs related to the Merger of $7.8 million and $13.6 million, respectively. These costs were expensed as incurred and are included in the General expense line item in the Condensed Consolidated Statements of Income. The transaction will be accounted for as a business combination with the Company being treated as the accounting acquirer. The assets acquired and liabilities assumed will be measured at fair value as of the Merger date primarily using Level 3 inputs. The initial purchase price allocation was not complete as of the date of this report and once available, will be revised during the measurement period, not to exceed one year, as new information is received and analyzed. Scapa On April 15, 2021, we completed the previously announced acquisition of Scapa Group plc (“Scapa”), a UK-based innovation, design, and manufacturing solutions provider for healthcare and industrial markets for aggregate cash consideration of $630.6 million, net of $22.7 million of Cash and cash equivalents acquired and including $568.9 million for the purchase of all Scapa ordinary shares, $75.9 million for the repayment of Scapa debt and $8.5 million for the repayment of acquisition costs incurred by Scapa. The acquisition adds to our portfolio of precision engineered performance materials, expands our innovation, design, and formulation capabilities, and brings a variety of new coating and converting technologies to the Company. Scapa is part of the AMS segment and operates globally with manufacturing and sales operations in the Americas, Asia and Europe. The purchase price was funded with borrowings under the amended Credit Agreement, as defined and discussed in Note 10. Debt. The acquisition was accounted for as a business combination with the assets acquired and liabilities assumed measured at their fair values as of the acquisition date, primarily using Level 3 inputs. The excess of the acquisition consideration over the estimated fair values of the acquired assets and assumed liabilities is assigned to goodwill. The goodwill is assigned to the AMS reportable segment and is primarily attributable to expected revenue synergies. It is not expected to be deductible for tax purposes. The estimated purchase price allocation disclosed as of June 30, 2021 was revised during the measurement period as new information was received and analyzed resulting in a decrease in Deferred tax liabilities of $12.3 million, an increase in Property, plant and equipment of $7.7 million, an increase in Other non-current liabilities, primarily due to changes in certain tax positions of $7.0 million, a $3.0 million decrease in Other non-current assets, and other insignificant changes, as presented in the table below. The consideration paid for Scapa, and the fair values of the assets acquired and liabilities assumed as of the April 15, 2021 acquisition date were as follows (in millions):
| Final Fair Value as of June 30, 2022 |  | Adjustments |  | Preliminary Fair Value as of April 15, 2021
Cash and cash equivalents | $ | 22.7 |  |  | $ | — |  |  | $ | 22.7 |
Accounts receivable | 67.7 |  |  | — |  |  | 67.7 |
Inventory | 60.0 |  |  | (0.9) |  |  | 60.9 |
Other current assets | 9.7 |  |  | (0.1) |  |  | 9.8 |
Property, plant and equipment | 159.8 |  |  | 7.7 |  |  | 152.1 |
Identifiable intangible assets | 246.2 |  |  | — |  |  | 246.2 |
Other non-current assets | 23.3 |  |  | (3.0) |  |  | 26.3 |
Total assets | $ | 589.4 |  |  | $ | 3.7 |  |  | $ | 585.7 |
Current debt | $ | 15.0 |  |  | $ | — |  |  | $ | 15.0 |
Accounts payable and other current liabilities | 83.9 |  |  | (2.0) |  |  | 85.9 |
Deferred income tax liabilities | 49.2 |  |  | (12.3) |  |  | 61.5 |
Other non-current liabilities | 40.1 |  |  | 7.0 |  |  | 33.1 |
Net assets acquired | $ | 401.2 |  |  | $ | 11.0 |  |  | $ | 390.2 |
Goodwill | 252.1 |  |  | (11.0) |  |  | 263.1 |
Total consideration | $ | 653.3 |  |  | $ | — |  |  | $ | 653.3 |
The fair value of receivables acquired approximates the gross contractual value. The contractual amount not expected to be collected is not material. Acquired inventory was comprised of finished goods and raw materials. The fair value of finished goods was based on net realizable value adjusted for the costs of selling and a reasonable profit margin on selling effort. The fair value of raw materials was determined to approximate book value. Property, plant and equipment is comprised of buildings and leasehold improvements, machinery and equipment, furniture and fixtures, computer equipment, and construction in progress. The fair value was determined using a reproduction/replacement cost approach which measures the value of an asset by estimating the cost to acquire or construct comparable assets adjusted for age and condition of the asset. Acquired intangible assets include customer relationships, tradenames and developed technologies. Intangible assets were valued using the multi-period excess earnings and relief-from-royalty methods, both are forms of the income approach which considers a forecast of future cash flows generated from the use of each asset. The following table shows the fair values assigned to identifiable intangible assets (in millions):
| Fair Value |  | Weighted-Average Amortization Period (Years)
Amortizable intangible assets: |  |  |
Customer relationships | $ | 205.4 |  |  | 15
Tradenames and other | 7.7 |  |  | 10
Developed technology | 33.1 |  |  | 7
Total amortizable intangible assets | $ | 246.2 |  |  |
The deferred tax effects resulting from the acquisition include the expected federal, state, and foreign tax consequences associated with temporary differences between the fair values of the assets acquired, liabilities assumed and the respective tax basis. During the three and six months ended June 30, 2022, the Company did not incur any direct and indirect acquisition-related costs for the Scapa acquisition. During the three and six months ended June 30, 2021, the Company recognized $5.1 million and $8.7 million of direct and indirect acquisition-related costs, respectively. Direct and indirect acquisition-related costs were expensed as incurred and are included in General expense in the Condensed Consolidated Statements of Income. Pro Forma Financial Information The supplemental pro forma financial information presents the combined results of operations for the periods presented, as if the Scapa acquisition had occurred on January 1, 2020. The supplemental pro forma financial information includes the following adjustments related to the Scapa acquisition: amortization of intangible assets and fair value adjustments to inventory, interest expense for the additional indebtedness incurred to complete the acquisition, transaction and severance costs, and applicable tax adjustments based on statutory rates in the jurisdictions where the adjustments occurred. The supplemental pro forma financial information presented below is not necessarily indicative of consolidated results of operations of the combined business had the Scapa acquisition occurred as of January 1, 2020 (in millions):
| Three Months Ended |  | Six Months Ended
| June 30, 2021 |  | June 30, 2021
Net sales | $ | 387.2 |  |  | $ | 797.0 |
Net income | $ | 3.6 |  |  | $ | 35.5 |
The supplemental pro forma financial information presented above does not include any adjustments related to the Merger.

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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 + Details
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