XML 33 R13.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Acquisitions | 12 Months Ended
--- | ---
Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | 3. ACQUISITION S On May 13, 2021, we completed the acquisition of all the outstanding equity interests in Georgia-Pacific Mt. Holly LLC, Georgia-Pacific's U.S. nonwovens business ("Mount Holly") for $170.9 million. This business includes the Mount Holly, NC manufacturing facility with annual production capacity of approximately 37,000 metric tons and an R&D center and pilot line for nonwovens product development in Memphis, TN. The Mount Holly facility produces high-quality airlaid products for the wipes, hygiene, 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 employs approximately 140 people. Mount Holly’s results are reported prospectively from the acquisition date as part of our Airlaid Materials segment. Mount Holly had annual net sales of approximately $100 million in 2020. The Mount Holly acquisition was financed through a combination of cash on hand and borrowings under our revolving credit facility. On October 29, 2021, we completed the acquisition of PMM Holding (Luxembourg) AG, the owner of all of the equity interest in Jacob Holm, a global leading manufacturer of premium quality spunlace nonwoven fabrics for critical cleaning, high-performance materials, personal care, hygiene and medical applications, for approximately $304.0 million for all outstanding shares and the extinguishment of Jacob Holm’s debt. Jacob Holm’s broad product offerings and blue-chip customer base expands our portfolio to include surgical drapes and gowns, wound care, face masks, facial wipes and cosmetic masks. The acquisition of Jacob Holm’s Sontara brand, a leading producer of finished products for critical cleaning wipes and medical apparel, enhances our technological capabilities. Jacob Holm has approximately 760 employees, operates production facilities in the United States, France and Spain, and its revenue in 2020 totaled approximately $400 million. The results of Jacob Holm's operations are reported as Spunlace, a newly formed segment, prospectively from the acquisition date. The Jacob Holm acquisition was financed with the proceeds of a private placement of $500.0 million of senior notes discussed in Note 17 - "Long-term Debt." The following table sets forth information related to the consideration exchanged for each acquisition.
In thousands | Mount Holly |  | Jacob Holm |  | Total
Total consideration | $ | 170,919 |  |  | $ | 303,952 |  |  | $ | 474,871 |
Less: Debt repaid | — |  |  | (148,000) |  |  | (148,000) |
Cash consideration | $ | 170,919 |  |  | $ | 155,952 |  |  | $ | 326,871 |
The preliminary purchase price allocations set forth in the following table are based on all information available to us at the present time and is subject to change. With respect to the Mount Holly acquisition, the purchase price allocation is complete. However, the Jacob Holm purchase price allocation is preliminary as we are in the process of finalizing our analysis of certain matters, primarily related to the assessment potential tax liabilities associated with the acquired entities. In the event new information becomes available, the measurement of the amount of goodwill reflected may be affected.
In thousands | Mount Holly |  | Jacob Holm |  | Total
Assets |  |  |  |  |
Cash and cash equivalents | $ | — |  |  | $ | 11,426 |  |  | $ | 11,426 |
Accounts receivable | 11,599 |  |  | 30,271 |  |  | 41,870 |
Inventory | 7,031 |  | 45,340 |  | 52,371
Prepaid and other current assets | 11 |  | 6,727 |  | 6,738
Plant, equipment and timberlands | 100,498 |  | 158,612 |  | 259,110
Intangible assets | 20,000 |  | 70,240 |  | 90,240
Goodwill | 35,793 |  | 48,855 |  | 84,648
Other assets | 8,041 |  | 26,929 |  | 34,970
Total assets | 182,973 |  | 398,400 |  | 581,373
Liabilities |  |  |  |  |
Short-term debt |  |  | 14,081 |  | 14,081
Accounts payable | 2,321 |  | 25,264 |  | 27,585
Other current liabilities | 1,868 |  | 21,763 |  | 23,631
Other long-term liabilities | 7,865 |  | 33,340 |  | 41,205
Total liabilities | 12,054 |  | 94,448 |  | 106,502
Total preliminary purchase price | $ | 170,919 |  |  | $ | 303,952 |  |  | $ | 474,871 |
The preliminary purchase price allocations set forth in the table above are based on all information available to us at the present time and is subject to change. In the event new information becomes available, primarily related to the finalization of post-closing working capital adjustments, the measurement of the amount of goodwill reflected may be affected. For purposes of allocating the total purchase price, assets acquired and liabilities assumed are recorded at their estimated fair market values. The allocations set forth above are based on management’s estimate of the fair value using valuation techniques such as discounted cash flow models, appraisals and similar methodologies. Acquired property, plant and equipment in both acquisitions are being depreciated on a straight-line basis with estimated remaining lives ranging from five years to 35 years. Intangible assets recorded in connection with the Mount Holly acquisition consist of customer relationships and are being amortized on a straight-line basis (11 years). With respect to the Jacob Holm acquisition, identifiable intangible assets consist of trade and product names (15 to 20-year life), technical know-how (8 to 20-year life) and customer relationships (20-year life). These assets are being amortized on a straight-line basis. The goodwill arising from the acquisitions largely relates to strategic benefits, product and market diversification, assembled workforce, and similar factors. Goodwill recorded in connection with the Mount Holly transaction is deductible for federal tax purposes over 15 years. Additional information is discussed in Note 16 - "Goodwill and Intangible Assets." In connection with the Jacob Holm acquisition and as provided for in the underlying Share Purchase Agreement, we recorded a $17.3 million indemnification asset related to certain potential tax liabilities. The indemnification asset is presented above under the caption "Other assets." The following table sets forth information related to amounts of net sales, operating income (loss) of the acquired businesses included in our results of operations prospectively from the date of acquisition and amounts of legal and professional fees directly related to the transaction included in our results of operations for the year ended December 31, 2021:
In thousands |  | Mount Holly |  | Jacob Holm
Net sales |  | $ | 60,599 |  |  | $ | 57,637 |
Operating income (loss) |  | 6,205 |  |  | (1,338) |
Legal and professional fees included in SG&A |  | 3,421 |  |  | 16,336 |
For purposes of presenting the pro forma financial information, the legal and professional costs directly related to the acquisitions have been eliminated. The following table summarizes annual unaudited pro forma financial information as if the acquisition occurred as of January 1, 2020:
| 2021 |  | 2020 |
In thousands, except per share | (unaudited) |
Net sales | $ | 1,400,901 |  |  | $ | 1,421,578 |  |
Income (loss) from continuing operations | 14,677 |  |  | 23,055 |  |
For purposes of presenting the above pro forma financial information, the legal and professional costs directly related to the acquisitions have been eliminated. 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.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationAndAssetAcquisitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration