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CREATIVE TOPS ACQUISITION
 12 Months Ended
Dec. 31, 2011
CREATIVE TOPS ACQUISITION

NOTE B — CREATIVE TOPS ACQUISITION

On November 4, 2011, the Company acquired 100% of the share capital of each of Creative Tops Holdings Limited and Creative Tops Far East Limited (collectively, “Creative Tops”), for £14.8 million ($23.7 million) of consideration, comprised of cash in the amount of £12.9 million ($20.6 million) and 255,908 shares of common stock with a value of £1.9 million ($3.1 million). Creative Tops, which reported net sales of approximately £26.3 million ($42.3 million) for its fiscal year ended March 31, 2011, is a leading UK-based supplier of private label and branded tableware and kitchenware products. The purpose of this acquisition is to expand the Company’s sale of products into Europe including growth in the sales of the traditional products of Creative Tops and new branded product offerings. The assets, liabilities and operating results of Creative Tops are reflected in the Company’s consolidated financial statements in accordance with ASC Topic No. 805, Business Combinations, commencing from the acquisition date.

The purchase price has been determined as follows (in thousands):

 

Cash paid, net of cash acquired

    $ 20,584   

Common stock issued

      3,100   
  

 

 

  

Total purchase price

    $ 23,684   
  

 

 

  

The cash portion of the purchase price was funded by borrowings under the Company’s Credit Facility (“Revolving Credit Facility”). Cash paid is reflected net of cash acquired of £0.1 million ($0.2 million).

The purchase price has been allocated based on management’s estimate of the fair value of the assets acquired and liabilities assumed, as follows (in thousands):

 

     Purchase
Price
Allocation		  

Accounts receivable

    $ 8,559   

Inventory

      5,228   

Other current assets

      508   

Property and equipment

      844   

Goodwill and other intangibles

      16,892   

Accounts payable

      (1,250 ) 

Accrued expenses

      (2,351 ) 

Other liabilities

      (1,191 ) 

Deferred tax liability

      (3,555 ) 
  

 

 

  

Total allocated value

    $ 23,684   
  

 

 

  

On the basis of estimated fair values, the excess of the purchase price over the net assets acquired of $13.3 million has been allocated as follows: $10.6 million for customer relationships, $3.6 million for trade names, $2.7 million for goodwill, net of a deferred tax liability related to amortizable intangibles of $3.6 million. Customer relationships and trade names are amortized on a straight-line basis over their estimated useful lives (see Note D).