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BUSINESS COMBINATIONS - MATTRESS FABRIC SEGMENT
 12 Months Ended
May 01, 2016
Business Combinations [Abstract]  
BUSINESS COMBINATIONS - MATTRESS FABRIC SEGMENT
2.   BUSINESS COMBINATIONS – MATTRESS FABRIC SEGMENT

On May 8, 2013, we entered into an asset purchase and consulting agreement with Bodet & Horst GMBH & Co. KG and certain affiliates (“Bodet & Horst”) that provided for, among other things, the purchase of equipment and certain other assets from Bodet & Horst and the restructuring of prior consulting and non-compete agreements pursuant to an earlier asset purchase and consulting agreement with Bodet & Horst dated August 11, 2008. This agreement was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. We agreed with Bodet & Horst to replace the prior non-compete agreement that prevented us from selling certain mattress fabrics and products to a leading manufacturer, with a non-compete agreement that now allows us to make such sales. In addition, the prior consulting and non-compete agreement, under which Bodet & Horst agreed not to sell most  mattress fabrics in North America, was replaced, expanded, and extended pursuant to the new asset purchase and consulting agreement.

The purchase price for the equipment and the certain other assets noted below was $2.6 million in cash.

The following table presents the allocation of the acquisition cost to the assets acquired based on their fair values:
 
(dollars in thousands)
  
Fair Value
  
Equipment (Note 13)
  
$
890
  
Non-compete agreement (Notes 7 and 13)
    
882
  
Customer relationships (Notes 7 and 13)
    
868
  
   
$
2,640
  

The company recorded its non-compete at its fair value based on a discounted cash flow valuation model. The company recorded its customer relationships at its fair value based on a multi-period excess earnings valuation model. This non-compete agreement is being amortized on a straight line basis over the fifteen year life of the agreement. The customer relationships are being amortized on a straight line basis over their useful life of seventeen years. The equipment is being amortized on a straight line basis over its useful life of seven years.