Acquisitions

Fiscal 2019 Acquisition

Grakon Parent, Inc. ("Grakon")

On September 12, 2018, the Company acquired 100% of the stock of Grakon for $422.1 million in cash, net of cash acquired. The business, headquartered in Seattle, Washington, is a manufacturer of custom designed lighting solutions and highly styled engineered components. Grakon’s manufacturing capabilities and products help diversify the Company's product offerings and expand the Industrial segment, which is a key component of the Company's strategic direction. The accounts and transactions of Grakon have been included in the Automotive and Industrial segments in the consolidated financial statements from the effective date of the acquisition. For goodwill impairment testing purposes, Grakon has been included in the Company's North American Automotive and Grakon Industrial reporting units.

The Company has not yet completed the process of estimating the fair value of the assets acquired and liabilities assumed. Accordingly, the Company's preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as the Company completes the process, which would likely impact the Company's allocation of the purchase price to goodwill. The primary fair value estimates considered preliminary are contingencies and income tax-related items. Based on the Company's preliminary allocation of the purchase price, revised as of April 27, 2019, goodwill decreased $2.8 million from the preliminary amount reported in the Company's consolidated financial statements as of January 26, 2019. The revised preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed were:



(Dollars in Millions)
Cash	$	6.9
Accounts Receivable	36.1
Inventory	30.8
Prepaid Expenses and Other Current Assets	1.6
Intangible Assets	221.9
Goodwill	175.3
Pre-production Costs	1.5
Property, Plant and Equipment	16.2
Accounts Payable	(19.4		)
Accrued Employee Liabilities	(4.4		)
Other Accrued Expenses	(7.5		)
Income Tax Payable	(0.7		)
Deferred Income Tax Liability	(29.3		)
Total Purchase Price	$	429.0

The following table presents details of the intangible assets acquired:



(Dollars in Millions)	Fair Value at Date of Acquisition		Amortization Period
Customer Relationships and Agreements - Significant Customer	$	57.0	19.5 years
Customer Relationships and Agreements - All Other Customers	125.0		19.5 years
Technology Licenses	17.7		11.7 years
Trade Names	22.2		8.5 years
Total	$	221.9

The Company's consolidated statement of income for fiscal 2019 included approximately seven and a half months of the operating results of Grakon, which was comprised of net sales of $122.8 million and income before income taxes of $17.7 million.

Acquisition-related costs of $15.4 million were incurred in relation to the acquisition of Grakon for fiscal 2019, of which $9.8 million was reported in selling and administrative expenses and $5.6 million was reported in costs of products sold on the consolidated statements of income.

As part of the acquisition of Grakon in fiscal 2019, the Company recorded goodwill of $175.3 million, of which $36.9 million is deductible for income taxes.

Fiscal 2018 Acquisitions

Procoplast S.A. ("Procoplast")

On July 27, 2017, the Company acquired 100% of the stock of Procoplast for $22.2 million in cash, net of cash acquired. The business, located near the Belgian-German border, is an independent manufacturer of automotive assemblies. The accounts and transactions of Procoplast have been included in the Automotive segment in the consolidated financial statements from the effective date of the acquisition. For goodwill impairment testing purposes, Procoplast is included in the Company's European Automotive reporting unit.

During the fourth quarter of fiscal 2018, the Company completed the allocation of the purchase price to the assets acquired and liabilities assumed. The final allocation of the purchase price to the fair values of the assets acquired and liabilities assumed was:



(Dollars in Millions)
Cash	$	1.3
Accounts Receivable	7.4
Inventory	3.5
Intangible Assets	19.2
Goodwill	6.8
Pre-production Costs	2.3
Property, Plant and Equipment	23.8
Accounts Payable	(4.9		)
Accrued Employee Liabilities	(0.8		)
Other Accrued Expenses	(0.7		)
Income Taxes Payable	(0.6		)
Short-term Debt	(3.2		)
Other Long-term Liabilities	(2.1		)
Long-term Debt	(20.6		)
Deferred Income Tax Liability	(7.9		)
Total Purchase Price	$	23.5

As part of the acquisition of Procoplast in fiscal 2018, the Company recorded goodwill of $6.8 million, none of which is deductible for income taxes.

The following table presents details of the intangible assets acquired:



(Dollars in Millions)	Fair Value at Date of Acquisition		Amortization Period
Customer Relationships and Agreements - Significant Customer	$	12.3	17.0 years
Customer Relationships and Agreements - All Other Customers	2.8		11.5 years
Technology Licenses	2.1		8.5 years
Trade Names	2.0		8.5 years
Total	$	19.2

Acquisition-related costs of $1.3 million were incurred in relation to the acquisition of Procoplast in fiscal 2018, of which $1.1 million was reported in selling and administrative expenses and $0.2 million was reported in costs of products sold on the consolidated statements of income.

Pacific Insight Electronics Corp. ("Pacific Insight")

On October 3, 2017, the Company acquired 100% of the outstanding common shares of Pacific Insight for $108.7 million in cash, net of cash acquired. Pacific Insight, headquartered in Canada, is a global solutions provider offering design, development, manufacturing and delivery of lighting and electronic products and full-service solutions to the automotive and commercial vehicle markets. Its technology in LED-based ambient and direct lighting expands the Company's presence within the automotive interior, as well as augments the Company's efforts in overhead console and other areas. The accounts and transactions of Pacific Insight have been included in the Automotive segment in the consolidated financial statements from the effective date of the acquisition. For goodwill impairment testing purposes, Pacific Insight is included in the Company's North American Automotive reporting unit.



(Dollars in Millions)
Cash	$	4.9
Accounts Receivable	18.3
Inventory	13.0
Prepaid Expenses and Other Current Assets	0.3
Income Taxes Receivable	1.2
Intangible Assets	40.1
Goodwill	50.4
Pre-production Costs	0.8
Property, Plant and Equipment	13.2
Accounts Payable	(7.9		)
Accrued Employee Liabilities	(0.8		)
Other Accrued Expenses	(2.9		)
Short-term Debt	(0.8		)
Long-term Debt	(3.4		)
Deferred Income Tax Liability	(12.8		)
Total Purchase Price	$	113.6

As part of the acquisition of Pacific Insight in fiscal 2018, the Company recorded goodwill of $50.4 million, none of which is deductible for income taxes.

The following table presents details of the intangible assets acquired:



(Dollars in Millions)	Fair Value at Date of Acquisition		Amortization Period
Customer Relationships and Agreements - Automotive	$	22.6	11.0 years
Customer Relationships and Agreements - Commercial	9.6		13.0 years
Trade Names	6.2		7.5 years
Technology Licenses	1.7		5.5 years
Total	$	40.1

Acquisition-related costs of $5.5 million were incurred in relation to the acquisition of Pacific Insight for fiscal 2018, of which $4.9 million was reported in selling and administrative expenses and $0.6 million was reported in costs of products sold on the consolidated statements of income.

The following table presents unaudited supplemental pro forma results for fiscal 2019 and 2018 as if both the Grakon acquisition had occurred as of the beginning of fiscal 2018 and the Pacific Insight acquisition had occurred as of the beginning of fiscal 2017. The unaudited pro forma information is presented for information purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at such times. The unaudited pro forma results presented below primarily include amortization charges for acquired intangible assets, depreciation adjustments for property, plant and equipment that has been revalued, interest expense adjustments due to an increased debt level, adjustments for certain acquisition-related charges and related tax effects.



	Fiscal Year Ended
(Dollars in Millions)	April 27, 2019		April 28, 2018
Revenues	$	1,073.3	$	1,095.0
Net Income	$	106.4	$	70.5