XML 23 R9.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Acquisitions and Dispositions | 9 Months Ended
--- | ---
Jun. 30, 2015
Acquisitions and Dispositions [Abstract] |
Acquisitions and Dispositions | Note 4. Acquisitions and Dispositions On December 2, 2014, the Company completed the acquisition of certain citrus and related assets of Orange-Co, LP (“Orange-Co”) pursuant to an Asset Purchase Agreement, which we refer to as the Orange-Co Purchase Agreement, dated as of December 1, 2014 and 51% of the ownership interests of Citree. The assets the Company purchased include approximately 20,263 acres of citrus groves in DeSoto and Charlotte Counties, Florida, which comprise one of the largest contiguous citrus grove properties in the state of Florida. Total assets acquired were approximately $277,792,000, net of $2,060,000 in cash acquired and $4,838,000 in fair value attributable to noncontrolling interest, including: (1) $147,500,000 in initial cash consideration funded from the proceeds of the sugarcane disposition and new term loan debt; (2) up to $7,500,000 in additional cash consideration to be released from escrow in equal parts, subject to certain limitations, on December 1, 2015 and June 1, 2016; (3) the refinancing of Orange-Co's outstanding debt including approximately $92,290,000 in term loan debt and a working capital facility of approximately $27,857,000 and (4) the assumption of certain other liabilities totaling $4,705,000. On December 1, 2014, Alico deposited an irrevocable standby letter of credit issued by Rabo Agrifinance, Inc., or Rabo, in the aggregate amount of $7,500,000 into an escrow account to fund the additional cash consideration. The Company acquired Orange-Co to transform our citrus business and meaningfully enhance the Company's position in the citrus industry. The Company has included the financial results of Orange-Co in the Financial Statements from the date of acquisition. These results include approximately $72,233,000 in revenue and $18,060,000 in gross profit. This acquisition was accounted for under the acquisition method of accounting. Accordingly, the Company recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisition were expensed as incurred. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and noncontrolling interests is recognized as goodwill. All goodwill recognized will be deductible for tax purposes. The initial accounting for the business combination is not complete and adjustments to provisional amounts, or recognition of additional assets acquired or liabilities assumed, may occur as more detailed analyses are completed and additional information is obtained about the facts and circumstances that existed as of the acquisition date. In the Company's Condensed Combined Consolidated Financial Statements for the period ended June 30, 2015, the total assets acquired and liabilities assumed were based on preliminary information and were subject to adjustment as new information was obtained. During the three months ended June 30, 2015, an adjustment to the fair value of total assets acquired resulted in an increase of approximately $1,000,000. For the nine months ended June 30, 2015, the Company incurred approximately $3,239,000 in professional and legal costs in connection with the Orange-Co acquisition. These costs are included in corporate, general and administrative expenses in the Condensed Combined Consolidated Statements of Operations and Comprehensive Income for the nine months ended June 30, 2015. The following table summarizes the consideration paid for the acquired net assets and the acquisition accounting for the fair values of the assets acquired and liabilities assumed, as adjusted, in the Condensed Combined Consolidated Balance Sheets as of the acquisition date. These balances are subject to change when final asset valuations are obtained and the potential for liabilities has been further evaluated. The fair value of the consideration paid for the acquisition of the net assets, as adjusted, was as follows:
Asset acquisition |  |
(in thousands) |  |
|  | Amount
Assets: |  |  |  |
Accounts receivable, net |  | $ | 888 |
Other current assets |  |  | 845 |
Inventories, net |  |  | 35,562 |
Property, Buildings and Equipment |  |  | 240,949 |
Goodwill |  |  | 2,246 |
Other assets |  |  | 2,140 |
Total assets, net of cash acquired |  | $ | 282,630 |
Liabilities: |  |  |  |
Accounts payable and accrued liabilities |  | $ | 4,205 |
Debt |  |  | 500 |
Payable to seller |  |  | 7,500 |
Total liabilities assumed |  | $ | 12,205 |
Assets acquired less liabilities assumed |  | $ | 270,425 |
Less: fair value attributable to noncontrolling interest |  |  | (4,838 | )
Total purchase consideration |  | $ | 265,587 |
Cash proceeds from sugarcane disposition |  | $ | 97,126 |
Working capital line of credit |  |  | 27,857 |
Term loans |  |  | 140,604 |
Total purchase consideration |  | $ | 265,587 |
The unaudited pro-forma information below for the three and nine months ended June 30, 2015 and 2014 gives effect to this acquisition as if the acquisitions had occurred on October 1, 2013. The pro-forma financial information is not necessarily indicative of the results of operations if the acquisition had been effective as of this date.
(in thousands except per share amounts) |  | Three Months Ended June 30, |  | Nine Months Ended June 30,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
Revenues |  | $ | 68,809 |  |  | $ | 73,519 |  |  | $ | 131,857 |  |  | $ | 163,375 |
Income from operations |  | $ | 16,177 |  |  | $ | 20,479 |  |  | $ | 18,438 |  |  | $ | 38,119 |
Net income attributable to Alico, Inc. common stockholders |  | $ | 7,767 |  |  | $ | 11,843 |  |  | $ | 15,104 |  |  | $ | 20,932 |
Basic earnings per common share |  | $ | 0.94 |  |  | $ | 1.61 |  |  | $ | 1.90 |  |  | $ | 2.86 |
Diluted earnings per common share |  | $ | 0.94 |  |  | $ | 1.61 |  |  | $ | 1.89 |  |  | $ | 2.85 |
Acquisition of Citrus Grove On September 4, 2014, Silver Nip Citrus and TRB Groves, LLC entered into a Purchase and Sale Agreement pursuant to which Silver Nip Citrus purchased all of the assets on a 1,500 acre citrus grove in Charlotte County, FL for a purchase price of approximately $17,624,000. The purchase price was funded from Silver Nip Citrus' cash and cash equivalents and $11,000,000 in term loans (see “Note 7” to the accompanying Condensed Combined Consolidated Financial Statements). We acquired the citrus acres to increase the size of our citrus groves which we believe strengthens our market position. The total cost of the acquisition was allocated to the assets acquired based on their estimated respective fair values in accordance with ASC 805, Business Combinations and was accounted for using the acquisition method of accounting. The results of operations have been included in our combined consolidated statements of operations since September 4, 2014, the date of closing. Pro-forma operating results, as if the Company had completed the acquisition at the beginning of the periods presented, are not significant to the Company's consolidated financial statements and are not presented. Assets acquired in the acquisition are as follows:
(in thousands) |  |
| Amount
Assets: |  |
Inventories, net | $ | 1,329
Property, Buildings and Equipment |  |
Equipment and other facilities |  | 2,742
Land |  | 5,921
Citrus Trees |  | 7,632
Total assets, net of cash acquired | $ | 17,624
Sugarcane Land On November 21, 2014, the Company completed the sale of approximately 36,000 acres of land used for sugarcane production and land leasing in Hendry County, Florida to Global Ag Properties, LLC (“Global Ag Properties”) for approximately $97,900,000 in cash. We had previously leased approximately 30,600 of these acres to United States Sugar Corporation (“USSC”) (the “USSC Lease”). The USSC Lease was assigned to Global Ag Properties in conjunction with the land sale. Net proceeds from the sugarcane land sale of approximately $97,126,000 were deposited with a Qualified Intermediary in anticipation of the Orange-Co asset acquisition in a tax deferred like-kind exchange pursuant to Internal Revenue Code Section §1031. The sales price is subject to post-closing adjustments over a ten (10)-year period. The Company realized a gain of $42,753,000 on the sale. Initially, $29,140,000 of the gain was deferred due to the Company's continuing involvement in the property pursuant to a post-closing agreement and the potential price adjustments. The deferral represents the Company's estimate of the maximum exposure to loss as a result of the continuing involvement. A net gain of approximately $13,613,000 was recognized in the Condensed Combined Consolidated Statement of Operations and Comprehensive Income for the nine months ended June 30, 2015. On May 1, 2015, the Company made a payment of $1,347,000 to Global Ag Properties pursuant to the sales contract. USSC's rent is tied to the market price of sugar, and this payment is required annually in advance, to supplement the rent paid by USSC in the event that the sugar prices are below certain thresholds. This advance payment is included in other current assets at June 30, 2015. As a result of the disposition of our sugarcane land, we are no longer involved in sugarcane operations, and, as of November 21, 2014, the Improved Farmland segment was no longer material to our business, however, the sugarcane operation has not been classified as a discontinued operation due to the post-closing adjustments, amongst other involvement, as described above.

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

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration