XML 83 R11.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Acquisitions and Disposals | 12 Months Ended
--- | ---
Jun. 30, 2015
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | ACQUISITIONS The Company accounts for acquisitions using the acquisition method of accounting. The results of operations of the acquisitions typically have been included in the consolidated results from their respective dates of acquisition. The purchase price of each acquisition is allocated to the tangible assets, liabilities, and identifiable intangible assets acquired based on their estimated fair values. Acquisitions may include contingent consideration, the fair value of which is estimated on the acquisition date as the present value of the expected contingent payments, determined using weighted probabilities of possible payments. The fair values assigned to identifiable intangible assets acquired were determined primarily by using an income approach which was based on assumptions and estimates made by management. Significant assumptions utilized in the income approach were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by authoritative guidance. The excess of the purchase price over the fair value of the identified assets and liabilities has been recorded as goodwill. The costs related to all acquisitions have been expensed as incurred and are included in “Acquisition related expenses, restructuring and integration charges, net” in the Consolidated Statements of Income. Acquisition-related costs of $5,731, $7,238, and $5,461 were expensed in the fiscal years ended June 30, 2015, 2014, and 2013, respectively. The expenses incurred during fiscal 2015 primarily relate to professional fees, severance charges and other transaction related costs associated with the three acquisitions completed in the current fiscal year. The expenses incurred during fiscal 2014 primarily relate to professional fees and stamp duty associated with the acquisition of Tilda and during fiscal 2013 primarily related to professional fees associated with the acquisition of the UK Ambient Grocery Brands and BluePrint (as discussed below). Fiscal 2015 On July 17, 2014, the Company acquired the remaining 51.3% of HPPC that it did not already own, at which point HPPC became a wholly-owned subsidiary. HPPC processes, markets and distributes antibiotic-free, organic and other poultry products. HPPC held a 19% interest in Empire, which grows, processes and sells kosher poultry and other products. Consideration in the transaction consisted of cash totaling $20,310 and 462,856 shares of the Company’s common stock valued at $19,690. The cash consideration paid was funded with existing cash balances. Additionally, HPPC’s existing bank borrowings were repaid on September 30, 2014 with proceeds from borrowings under the Credit Agreement (see Note 10). The carrying amount of the pre-existing 48.7% investment in HPPC as of June 30, 2014 was $30,740. Due to the acquisition of the remaining 51.3% of HPPC, the Company adjusted the carrying amount of its pre-existing investment to its fair value. This resulted in a gain of $5,334 recorded in “Interest and other expenses, net” in the Consolidated Statements of Income. On February 20, 2015, the Company acquired Belvedere International, Inc., (“Belvedere”) a leader in health and beauty care products including the Live Clean® brand with approximately 200 baby, body and hair care products as well as several mass market brands sold primarily in Canada and manufactured in a company facility in Mississauga, Ontario, Canada. Consideration in the transaction consisted of cash totaling C$17,454 ($13,988 at the transaction date exchange rate), which included debt that was repaid at closing, and was funded with existing cash balances. Additionally, contingent consideration of up to a maximum of C$4,000 is payable based on the achievement of specified operating results during the two consecutive one-year periods following the closing date. Belvedere is included in our Canada operating segment. Net sales and income before income taxes from continuing operations attributable to the Belvedere acquisition and included in our consolidated results were not material in the fiscal year ended June 30, 2015. On March 4, 2015, the Company acquired the remaining 81% of Empire that it did not already own, at which point Empire became a wholly-owned subsidiary. Consideration in the transaction consisted of cash totaling $57,595 (net of cash acquired) which included debt that was repaid at closing. The acquisition was funded with borrowings under the Credit Agreement. The carrying amount of the pre-existing 19% investment in Empire as of March 4, 2015 was $6,864. Due to the acquisition of the remaining 81% of Empire, the Company adjusted the carrying amount of its pre-existing investment to its fair value. This resulted in a gain of $2,922 recorded in “Interest and other expenses, net” in the Consolidated Statements of Income. Net sales and income before income taxes from continuing operations attributable to the Empire acquisition and included in our consolidated results were not material in the fiscal year ended June 30, 2015. The following table summarizes the components of the preliminary purchase price allocations for the fiscal 2015 acquisitions:
| HPPC |  | Belvedere |  | Empire |  | Total
Carrying value of pre-existing interest, after fair value adjustments: | $ | 36,074 |  |  | $ | — |  |  | $ | 9,786 |  |  | $ | 45,860 |
Purchase Price: |  |  |  |  |  |  |
Cash paid | 20,310 |  |  | 13,988 |  |  | 57,595 |  |  | 91,893 |
Equity issued | 19,690 |  |  | — |  |  | — |  |  | 19,690 |
Fair value of contingent consideration | — |  |  | 1,603 |  |  | — |  |  | 1,603 |
Total investment: | $ | 76,074 |  |  | $ | 15,591 |  |  | $ | 67,381 |  |  | $ | 159,046 |
Allocation: |  |  |  |  |  |  |
Current assets | $ | 52,055 |  |  | $ | 10,042 |  |  | $ | 19,628 |  |  | $ | 81,725 |
Property, plant and equipment | 21,864 |  |  | 2,598 |  |  | 13,094 |  |  | 37,556 |
Other assets | 7,288 |  |  | — |  |  | — |  |  | 7,288 |
Identifiable intangible assets | 20,700 |  |  | 5,698 |  |  | 33,890 |  |  | 60,288 |
Deferred taxes | 1,388 |  |  | (3,890 | ) |  | (14,443 | ) |  | (16,945 | )
Assumed liabilities | (41,705 | ) |  | (1,784 | ) |  | (15,632 | ) |  | (59,121 | )
Goodwill | 14,484 |  |  | 2,927 |  |  | 30,844 |  |  | 48,255 |
| $ | 76,074 |  |  | $ | 15,591 |  |  | $ | 67,381 |  |  | $ | 159,046 |
The purchase price allocations are based upon preliminary valuations, and the Company’s estimates and assumptions are subject to change within the measurement period as valuations are finalized. Any change in the estimated fair value of the net assets, prior to the finalization of the more detailed analyses, but not to exceed one year from the dates of acquisition, will change the amount of the purchase price allocations. The preliminary fair values assigned to identifiable intangible assets acquired were based on assumptions and estimates made by management. Identifiable intangible assets acquired consisted of customer relationships valued at $14,621 with an estimated useful life of 10.8 years and trade names valued at $45,667 with indefinite lives. The goodwill represents the future economic benefits expected to arise that could not be individually identified and separately recognized, including use of the Company’s existing infrastructure to expand sales of the acquired business’ products. The goodwill recorded as a result of these acquisitions is not expected to be deductible for tax purposes. The following table provides unaudited pro forma results of continuing operations for the fiscal years ended June 30, 2015 and 2014, as if only the acquisitions completed in fiscal 2015 (HPPC, Belvedere and Empire) had been completed at the beginning of fiscal year 2014. The information has been provided for illustrative purposes only, and does not purport to be indicative of the actual results that would have been achieved by the Company for the periods presented or that will be achieved by the combined company in the future. The pro forma information has been adjusted to give effect to items that are directly attributable to the transactions and are expected to have a continuing impact on the combined results, which include amortization expense associated with acquired identifiable intangible assets and the impact of reversing our previously recorded equity in HPPC’s net income as prior to the date of acquisition, HPPC was accounted for under the equity-method of accounting.
| Fiscal Year ended June 30,
| 2015 |  | 2014
Net sales from continuing operations | $ | 2,797,368 |  |  | $ | 2,558,173 |
Net income from continuing operations | $ | 171,130 |  |  | $ | 148,215 |
Net income per common share from continuing operations - diluted | $ | 1.65 |  |  | $ | 1.48 |
Fiscal 2014 On April 28, 2014, the Company acquired Charter Baking Company, Inc. and its subsidiary Rudi’s Organic Bakery, Inc. (“Rudi’s”), a leading organic and gluten-free company with facilities in Boulder, Colorado. Under the Rudi’s Organic Bakery® and Rudi’s Gluten-Free Bakery brands, Rudi’s offers a range of approximately 60 products including USDA certified organic breads, buns, bagels, tortillas, wraps and soft pretzels and various gluten-free products including breads, buns, pizza crusts, tortillas, snack bars and stuffing in the United States and Canada. Consideration in the transaction consisted of cash totaling $50,807 (which is net of cash acquired) and 267,488 shares of the Company’s common stock valued at $11,168. The cash consideration paid was funded with borrowings under the Credit Agreement. On January 13, 2014, the Company acquired Tilda Limited (“Tilda”), a leading premium 100% branded Basmati and specialty rice products company. Tilda offers a range of over 60 dry rice and ready-to-heat branded products under the Tilda® brand and other names to consumers in over 40 countries, principally in the United Kingdom, the Middle East and North Africa, Continental Europe, North America and India. On June 18, 2014, the Company also completed the acquisition of certain assets of Tilda Riceland Limited in India. Consideration in these transactions consisted of cash totaling $123,822 (which is net of cash acquired and based on the exchange rates in effect at the respective transaction dates), 3,292,346 shares of the Company’s common stock valued at $148,353 and deferred consideration (the “Vendor Loan Note”) for £20,000 ($32,958 at the transaction date exchange rate) issued by the Company and payable within one year following completion of the acquisition, with a portion being payable in Company shares at the Company’s option. On January 13, 2015, the Company paid £10,000 ($15,114 at the transaction date exchange rate and which was funded with existing cash balances) and issued 266,984 shares of the Company’s common stock in full repayment of this obligation. As a result, the Company recorded a realized foreign currency gain of $3,397 which represents the change in foreign currency rates from the acquisition date through the repayment date. The cash consideration paid for the initial purchase price was funded with borrowings under the Credit Agreement. The following table summarizes the components of the purchase price allocations for the fiscal 2014 acquisitions:
| Tilda |  | Rudi’s |  | Total
Purchase price: |  |  |  |  |
Cash paid | $ | 123,822 |  |  | $ | 50,807 |  |  | $ | 174,629 |
Equity issued | 148,353 |  |  | 11,168 |  |  | 159,521 |
Vendor Loan Note | 32,958 |  |  | — |  |  | 32,958 |
| $ | 305,133 |  |  | $ | 61,975 |  |  | $ | 367,108 |
Allocation: |  |  |  |  |
Current assets | $ | 86,828 |  |  | $ | 8,058 |  |  | $ | 94,886 |
Property, plant and equipment | 39,806 |  |  | 3,774 |  |  | 43,580 |
Identifiable intangible assets | 124,549 |  |  | 27,514 |  |  | 152,063 |
Assumed liabilities | (93,742 | ) |  | (6,319 | ) |  | (100,061 | )
Deferred income taxes | (26,230 | ) |  | 1,932 |  |  | (24,298 | )
Goodwill | 173,922 |  |  | 27,016 |  |  | 200,938 |
| $ | 305,133 |  |  | $ | 61,975 |  |  | $ | 367,108 |
The fair values assigned to identifiable intangible assets acquired were based on assumptions and estimates made by management. Identifiable intangible assets acquired consist principally of customer relationships valued at $41,976 with a weighted average estimated useful life of 13.2 years and trade names valued at $110,087 with indefinite lives. The goodwill represents the future economic benefits expected to arise that could not be individually identified and separately recognized, including use of the Company’s existing infrastructure to expand sales of the acquired business’ products. The goodwill recorded as a result of the acquisitions is not expected to be deductible for tax purposes. The following table provides unaudited pro forma results of continuing operations for the fiscal years ended June 30, 2014 and 2013, as if only the acquisitions completed in fiscal 2014 (Rudi’s and Tilda) had been completed at the beginning of fiscal year 2013. The information has been provided for illustrative purposes only, and does not purport to be indicative of the actual results that would have been achieved by the Company for the periods presented or that will be achieved by the combined company in the future. The pro forma information has been adjusted to give effect to items that are directly attributable to the transactions and are expected to have a continuing impact on the combined results, which include amortization expense associated with acquired identifiable intangible assets and interest expense associated with bank borrowings to fund the acquisitions.
| Fiscal Year Ended June 30,
| 2014 |  | 2013
Net sales from continuing operations | $ | 2,310,540 |  |  | $ | 1,970,371 |
Net income from continuing operations | $ | 151,534 |  |  | $ | 139,085 |
Net income per common share from continuing operations - diluted | $ | 1.49 |  |  | $ | 1.41 |
Fiscal 2013 On May 2, 2013, the Company acquired Ella’s Kitchen Group Limited (“Ella’s Kitchen”), a manufacturer and distributor of premium organic baby food under the Ella’s Kitchen® brand and the first company to offer baby food in convenient flexible pouches. Ella’s Kitchen offers a range of branded organic baby food products principally in the United Kingdom, the United States and Scandinavia. Ella’s Kitchen’s operations are included as part of the Company’s United States operating segment. Consideration in the transaction consisted of cash totaling £37,571, net of cash acquired (approximately $58,437 at the transaction date exchange rate) and 1,375,558 shares of the Company’s common stock valued at $45,050. The acquisition was funded with borrowings under our Credit Agreement. The amounts of net sales and income before income taxes from continuing operations attributable to the Ella’s Kitchen acquisition and included in our consolidated results were not material in the fiscal year ended June 30, 2013. On December 21, 2012, the Company acquired the assets and business of Zoe Sakoutis LLC, d/b/a BluePrint Cleanse (“BluePrint”), a nationally recognized leader in the cold-pressed juice category based in New York City, for $16,679 in cash and 348,534 shares of the Company’s common stock valued at $9,525. Additionally, contingent consideration was payable based upon the achievement of specified operating results during the two annual periods ending December 31, 2013 and 2014. The Company recorded $13,491 as the fair value of the contingent consideration at the acquisition date. In the fourth quarter of fiscal 2014, the Company paid $11,800 in settlement of the contingent consideration obligation with the sellers (see note 15). The BluePrint® brand, which is part of our United States operating segment, expanded our product offerings into a new category. The acquisition was funded with existing cash balances and borrowings under our Credit Agreement. The amounts of net sales and income before income taxes from continuing operations attributable to the BluePrint acquisition and included in our consolidated results were not material in the fiscal year ended June 30, 2013. On November 1, 2012, the Company completed the disposal of our sandwich business, including the Daily Bread TM brand name, in the United Kingdom. The disposal transaction resulted in an exchange of businesses, whereby the Company acquired the fresh prepared fruit products business of Superior Food Limited in the United Kingdom in exchange for the Company’s sandwich business and a cash payment of £1,000 (approximately $1,600 at the transaction date exchange rate). On October 27, 2012, the Company completed the acquisition of a portfolio of market-leading packaged grocery brands including Hartley’s®, Sun-Pat®, Gale’s®, Robertson’s® and Frank Cooper’s®, together with the manufacturing facility in Cambridgeshire, United Kingdom (the “UK Ambient Grocery Brands”) from Premier Foods plc. The product offerings acquired include jams, fruit spreads, jellies, nut butters, honey and marmalade products. Consideration in the transaction consisted of £169,708 in cash (approximately $273,246 at the transaction date exchange rate) funded with borrowings under our Credit Agreement and 1,672,852 shares of the Company’s common stock valued at $48,061. Since the date of acquisition, net sales of $161,784 and income before income taxes from continuing operations of $19,873 were included in the Consolidated Statement of Income for the fiscal year ended June 30, 2013. These results for the UK Ambient Grocery Brands since the date of acquisition on October 27, 2012 through the end of fiscal 2013 did not include all of the selling, general and administrative expenses required to properly support the future operations of the acquired business as these brands were acquired without such functions and the build of the required infrastructure and integration activities was ongoing. On August 20, 2012, the Company completed the sale of its private-label chilled ready meals business in the United Kingdom (the “CRM business”). Total consideration received was £9,641 (approximately $15,132 at the transaction date exchange rate). A preliminary loss on disposal was recognized of $3,616 ($4,200 after-tax, which includes the write-off of certain deferred tax assets) in the fiscal year ended June 30, 2013, and a subsequent gain of $1,148 in the fiscal year ended June 30, 2014 related to the finalization of the working capital adjustment with the purchaser. These amounts are included within “Loss from discontinued operations, net of tax” in the Consolidated Statements of Income. The following table summarizes the components of the purchase price allocations for the fiscal 2013 acquisitions:
| UK Ambient Grocery Brands |  | BluePrint |  | Ella’s Kitchen |  | Total
Purchase price: |  |  |  |  |  |  |
Cash paid | $ | 273,246 |  |  | $ | 16,679 |  |  | $ | 58,437 |  |  | $ | 348,362 |
Equity issued | 48,061 |  |  | 9,525 |  |  | 45,050 |  |  | 102,636 |
Fair value of contingent consideration | — |  |  | 13,491 |  |  | — |  |  | 13,491 |
| $ | 321,307 |  |  | $ | 39,695 |  |  | $ | 103,487 |  |  | $ | 464,489 |
Allocation: |  |  |  |  |  |  |
Current assets | $ | 29,825 |  |  | $ | 2,742 |  |  | $ | 27,749 |  |  | $ | 60,316 |
Property, plant and equipment | 39,150 |  |  | 3,173 |  |  | 672 |  |  | 42,995 |
Identifiable intangible assets | 118,020 |  |  | 18,980 |  |  | 49,669 |  |  | 186,669 |
Assumed liabilities | (2,693 | ) |  | (2,189 | ) |  | (15,064 | ) |  | (19,946 | )
Deferred income taxes | 2,882 |  |  | — |  |  | (11,789 | ) |  | (8,907 | )
Goodwill | 134,123 |  |  | 16,989 |  |  | 52,250 |  |  | 203,362 |
| $ | 321,307 |  |  | $ | 39,695 |  |  | $ | 103,487 |  |  | $ | 464,489 |
The fair values assigned to identifiable intangible assets acquired were based on assumptions and estimates made by management. Identifiable intangible assets acquired consisted of customer relationships valued at $46,232 with a weighted average estimated useful life of 15.6 years, a non-compete arrangement valued at $1,100 with an estimated life of 3.0 years, and trade names valued at $139,337 with indefinite lives. The goodwill represents the future economic benefits expected to arise that could not be individually identified and separately recognized, including use of our existing infrastructure to expand sales of the acquired business’ products. The goodwill recorded as a result of the acquisitions of the UK Ambient Grocery Brands and Ella’s Kitchen is not expected to be deductible for tax purposes.

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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1500-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1524-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4922-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4934-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4926-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

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