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Acquisitions | 12 Months Ended
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Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | 3. Acquisitions Acquisition of Franken On April 1, 2021, we completed the acquisition of Franken, for a purchase price of €2.4 million (US$2.8 million, based on April 1, 2021 exchange rates), net of cash acquired of $1.1 million. Franken is a provider of visual communication products, including boards, markers, planning tools, as well as creative and training products. Franken is a German company that is included in the Company’s EMEA reporting segment. Pro forma financial information is not presented due to immateriality. Acquisition of PowerA Effective December 17, 2020, we completed the acquisition of PowerA, a leading provider of third-party video gaming console accessories primarily in North America. The results of PowerA are included in all three of the Company's reporting units effective December 17, 2020. The purchase price was $321.8 million, net of a working capital adjustment received of $18.2 million, plus an additional earnout of up to $55.0 million in cash. The earnout is contingent upon PowerA achieving one- and two- year sales and profit growth objectives. The fair value of the contingent earnout liability was $36.8 million as of December 31, 2021. The PowerA acquisition and related expenses were funded by cash on hand, as well as borrowings from our revolving credit facility. For accounting purposes, the Company was the acquiring enterprise. The PowerA acquisition is being accounted for as a purchase business combination and PowerA's results are included in the Company’s consolidated financial statements as of December 31, 2020. The additional net sales contributed by the PowerA acquisition for the year ended December 31, 2021 were $249.6 million. During 2021, we finalized our fair value estimate of assets acquired and liabilities assumed as of the acquisition date. The following table presents the allocation of the consideration given to the fair values of the assets acquired and liabilities assumed at the date of the PowerA acquisition:
(in millions) | At December 17, 2020
Calculation of Goodwill: |
Purchase price, net of working capital adjustment | $ | 321.8 |
Fair value of contingent consideration | $ | 18.2 |
Plus fair value of liabilities assumed: |
Accrued liabilities | 9.2 |
Fair value of liabilities assumed | $ | 9.2 |
Less fair value of assets acquired: |
Inventory | 29.3 |
Property and equipment | 0.2 |
Identifiable intangibles | 235.4 |
Other assets | 13.2 |
Fair value of assets acquired | $ | 278.1 |
Goodwill | $ | 71.1 |
Transaction costs related to the PowerA acquisition were $0.1 million and $3.7 million for the years ended December 31, 2021, and 2020, respectively. These costs were reported as SG&A expenses in the Company's Consolidated Statements of Income. Unaudited Pro Forma Consolidated Results The accounting literature establishes guidelines regarding, and requires the presentation of, the following unaudited pro forma information. Therefore, the unaudited pro forma information presented below is not intended to represent, nor do we believe it is indicative of, the consolidated results of operations of the Company that would have been reported had the PowerA acquisition been completed on January 1, 2019. Furthermore, the unaudited pro forma information does not give effect to the anticipated synergies or other anticipated benefits of the PowerA acquisition. Had the PowerA acquisition occurred on January 1, 2019, unaudited pro forma consolidated results of the Company for the years ended December 31, 2021, 2020 and 2019 would have been as follows:
(in millions) | 2021 |  | 2020 |  | 2019
Net sales | $ | 2,025.3 |  |  | $ | 1,857.2 |  |  | $ | 2,124.0 |
Net income | 101.9 |  |  | 76.9 |  |  | 120.0 |
Net income per diluted common share | $ | 1.05 |  |  | $ | 0.80 |  |  | $ | 1.19 |
The pro forma amounts are based on the Company's historical results and the historical results for the acquired PowerA business, which have been translated at the average foreign exchange rates for the periods presented. The pro forma results of operations have been adjusted for amortization of finite-lived intangibles, and other charges related to the PowerA acquisition accounting. Acquisition of Foroni Effective August 1, 2019, we completed the acquisition of Foroni, a leading provider of Foroni® branded notebooks and paper-based school and office products in Brazil. The Foroni Acquisition increased our share of the back-to-school market in Brazil. The results of Foroni are included in the ACCO Brands International segment effective August 1, 2019. The purchase price was R$157.2 million (US$41.5 million based on July 31, 2019 exchange rates) inclusive of working capital adjustments. We also assumed $7.6 million in debt. A portion of the purchase price (R$25.0 million or US$6.6 million based on July 31, 2019 exchange rates) is being held in an escrow account for a period of up to 6 years after closing in the event of any claims against the sellers under the quota purchase agreement. The Company may also make claims against the sellers directly, subject to limitations in the quota purchase agreement, if the escrow is depleted. The Foroni Acquisition and related expenses were funded by cash on hand. For accounting purposes, the Company was the acquiring enterprise. The Foroni Acquisition is being accounted for as a purchase business combination and Foroni's results are included in the Company’s consolidated financial statements as of August 1, 2019. The following table presents the allocation of the consideration given to the fair values of the assets acquired and liabilities assumed at the date of the Foroni acquisition:
(in millions) | At August 1, 2019
Calculation of Goodwill: |
Purchase price, net of working capital adjustment | $ | 41.5 |
Plus fair value of liabilities assumed: |
Accounts payable and accrued liabilities | 13.9 |
Deferred tax liabilities | 5.4 |
Debt | 7.6 |
Lease liabilities | 5.3 |
Other non-current liabilities | 1.5 |
Fair value of liabilities assumed | $ | 33.7 |
Less fair value of assets acquired: |
Accounts receivable | 17.5 |
Inventory | 12.5 |
Property and equipment | 8.8 |
Identifiable intangibles | 11.1 |
Deferred tax assets | 2.7 |
Right of use asset, leases | 5.3 |
Other assets | 3.6 |
Fair value of assets acquired | $ | 61.5 |
Goodwill | $ | 13.7 |
In the third quarter of 2020, we finalized our fair value estimate of assets acquired and liabilities assumed as of the acquisition date. The transaction costs related to the Foroni Acquisition were $1.3 million. These costs were reported as SG&A expenses in the Company's Consolidated Statements of Income. Cumberland Asset Acquisition On January 31, 2019, the Company completed the purchase of certain assets, including inventory and certain identifiable intangibles, related to the Cumberland brand (the "Cumberland Asset Acquisition") in Australia for a purchase price of A$8.2 million (US$6.0 million based on January 31, 2019 exchange rates). The Cumberland Asset Acquisition extended our presence in Australia into new product categories. The Company accounted for the transaction as an asset acquisition, as the set of assets acquired does not meet the criteria to be classified as a business under GAAP. During the twelve months ended December 31, 2019, transaction costs related to the Cumberland Asset Acquisition were US$0.1 million. These costs were reported as SG&A expenses in the Company's Consolidated Statements of Income. The following table summarizes the fair value of assets acquired:
(in millions) | At January 31, 2019
Inventory | $ | 2.8 |
Identifiable intangibles | 3.2 |
Fair value of assets acquired | $ | 6.0 |

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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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