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Acquisition | 12 Months Ended
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Dec. 31, 2018
Business Combinations [Abstract] |
Acquisition |
3. | ACQUISITION
On October 1, 2018, we completed the acquisition of Georgia-Pacific’s European nonwovens business based in Steinfurt, Germany (“Steinfurt”) for $186 million including a working capital adjustment and subject to customary post-closing purchase price adjustments. The acquisition consisted of Georgia-Pacific’s operations located in Steinfurt along with sales offices located in France and Italy. The Steinfurt facility produces high-quality airlaid products for the table-top, wipes, hygiene, food pad, and other nonwoven materials markets, competing in the marketplace with nonwoven technologies and substrates, as well as other materials focused primarily on consumer based end-use applications. The facility is a state-of-the-art, 32,000-metric-ton-capacity manufacturing facility that employs approximately 220 people. Steinfurt’s results are reported prospectively from the acquisition date as part of our Advanced Airlaid Materials business unit. We financed the transaction through a combination of cash on hand and borrowings under our revolving credit facility. The preliminary purchase price allocation set forth in the following table is based on all information available to us at the present time and is subject to change. In the event new information, primarily related to the finalization of working capital adjustments, becomes available, the measurement of the amounts of goodwill reflected may be affected. The preliminary allocation of the purchase price to assets acquired and liabilities assumed is as follows:
In thousands |  |  | Preliminary Allocation |
Assets |  |  |  |  |
Cash and cash equivalents |  |  | $ | 7,540 |
Accounts receivable |  |  |  | 13,277 |
Inventory |  |  |  | 11,133 |
Prepaid and other current assets |  |  |  | 290 |
Plant, equipment and timberlands |  |  |  | 66,167 |
Intangible assets |  |  |  | 43,573 |
Goodwill |  |  |  | 75,317 |
Total assets |  |  |  | 217,297 |
Liabilities |  |  |  |  |
Accounts payable |  |  |  | 8,577 |
Deferred tax liabilities |  |  |  | 19,119 |
Other long term liabilities |  |  |  | 1,162 |
Total liabilities |  |  |  | 28,858 |
Total |  |  |  | 188,439 |
less cash acquired |  |  |  | (7,540 | )
Total purchase price |  |  | $ | 180,899 |
For purposes of allocating the total purchase price, assets acquired and liabilities assumed are recorded at their estimated fair market value. The allocation set forth above is based on management’s estimate of the fair value using valuation techniques such as discounted cash flow models, appraisals and similar methodologies. The amount allocated to intangible assets represents the estimated value of customer relationships, technological know-how and trade name. In connection with the Steinfurt acquisition we recorded $75.3 million of goodwill and $43.6 million of intangible assets. The goodwill arising from the acquisition largely relates to strategic benefits, product and market diversification, assembled workforce, and similar factors. For tax purposes, none of the goodwill is deductible. Intangible assets consist of technology, customer relationships and tradename. Acquired property, plant and equipment are being depreciated on a straight-line basis with estimated remaining lives ranging from 5 years to 25 years. Intangible assets are being amortized on a straight-line basis over an average estimated remaining life of 13 years reflecting the expected future value. Revenue and operating income of Steinfurt included in our consolidated results of operations for 2018 totaled $23.1 million and $2.4 million, respectively. The following table summarizes unaudited pro forma financial information as if the acquisition occurred as of January 1, 2017:
| Year ended December 31 (Unaudited) |  |
In thousands, except per share |  | 2018 |  |  |  | 2017 |  |
Pro forma |  |  |  |  |  |  |  |
Net sales | $ | 937,043 |  |  | $ | 904,430 |  |
Income from continuing operations |  | 1,585 |  |  |  | 1,396 |  |
Income per share from continuing operations |  | 0.04 |  |  |  | 0.03 |  |
During 2018, we incurred legal, professional and advisory costs directly related to the Steinfurt acquisition totaling $5.1 million. For purposes of presenting the above pro forma financial information, such costs have been eliminated. All such costs are presented under the caption “Selling, general and administrative expenses” in the accompanying consolidated statements of income (loss). This unaudited pro forma financial information presented in this section is not necessarily indicative of what the operating results would have been had the acquisition been completed at the beginning of the respective period nor is it indicative of future results.

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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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