Acquisition

PGI Acquisition

On January 28, 2011, pursuant to an Agreement and Plan of Merger, dated as of October 4, 2010, the Company was acquired by affiliates of the Blackstone Group (“Blackstone”), along with certain members of the Company's management (the "Merger"), for an aggregate purchase price valued at $403.5 million. As a result, the Company became a privately-held company. The Merger was financed by $560.0 million in aggregate principal of debt financing as well as common equity capital. In addition, the Company repaid our existing outstanding debt.

The Merger was recorded using the acquisition method of accounting in accordance with the accounting guidance for business combinations and non-controlling interest. The purchase price has been allocated to assets acquired and liabilities assumed based on the estimated fair market value of such assets and liabilities at the date of merger. The allocation of the purchase price was as follows:



In thousands	January 28, 2011
Cash	$	70,771
Accounts receivable	130,359
Inventory	122,006
Assets held for sale	17,284
Other current assets	51,687
Restricted cash	31,100
Total current assets	423,207

Property, plant and equipment	468,449
Goodwill	86,376
Intangible assets	71,992
Tax indemnification asset	16,221
Other noncurrent assets	30,264
Total assets acquired	$	1,096,509

Current liabilities	$	230,480
Current portion of long-term debt	3,586
Long-term debt	359,010
Deferred income taxes	36,792
Other noncurrent liabilities	55,898
Noncontrolling interest	7,247
Total liabilities assumed	$	693,013
Net assets acquired	$	403,496

Cash, accounts receivable and current liabilities were stated at their historical carrying values, which approximate their fair value, given the short-term nature of these assets and liabilities. Inventories were recorded at fair value, based on computations which considered many factors including the estimated selling price of the inventory, the cost to dispose of the inventory as well as the replacement cost of the inventory, where applicable. As a result, the Company increased the carrying value of inventory by $13.0 million. The step-up in inventory value was amortized into cost of goods sold over the period of the Company's normal inventory turns, which approximated two months.

The Company recorded intangible assets based on their estimated fair value, and consisted of the following:



In thousands	Useful Life	Amount
Technology	10 years	$	31,900
Trade names	Indefinite	23,500
Customer relationships	10 years	16,500
Other	< 1 year	92
Total		$	71,992

The Company allocated $23.5 million to trade names, primarily related to Chicopee. Management considered many factors in the determination that it will account for the asset as an indefinite-lived, including the current market leadership position of the name as well as the recognition in the industry. Therefore, in accordance with current accounting guidance, the indefinite-lived intangible asset will not be amortized, but instead tested for impairment at least annually (more frequently if certain indicators are present).

Acquisition related costs related to the Merger were as follows:



In thousands	Amount
Loan acquisition costs	$	19,252
Transaction expenses:
Fiscal year ended January 1, 2011	6,388
One month ended January 28, 2011	6,137
Eleven months ended December 31, 2011	27,919
Fiscal year ended December 29, 2012	452
Total transaction expense	40,896
Total	$	60,148

Loan acquisition costs related to the Merger were capitalized and recorded within Intangible assets, net in the Consolidated Balance Sheets and amortized over the term of the loan to which such costs relate. In accordance with ASC 805, "Business Combinations" ("ASC 805"), transaction expenses related to the Merger are expensed as incurred within Special charges, net in the Consolidated Statement of Operations.

China Acquisition

On May 26, 2010, the Company signed an equity transfer agreement to purchase the remaining 20% interest in our Chinese subsidiary Nanhia Nanxin Non-Woven Co. Ltd, subject to Chinese government approval. Pursuant to the agreement, the Company deposited $1.5 million into an escrow account with a bank to serve as a performance guarantee. On March 9, 2011, the Company received government approval and subsequently completed the noncontrolling interest acquisition for a purchase price of $7.2 million. The acquisition was accounted as an equity transaction in which no gain or loss was recognized.

Spain Acquisition

On December 2, 2009, the Company completed an acquisition from Grupo Corinpa S.L of certain assets and the operations of the nonwovens business of Tesalca-99, S.A. and Texnovo, S.A. (the “Sellers”) located in Barcelona, Spain. Consideration for the acquired assets consisted of 1.049 million shares of the Predecessor's Class A common stock which had a fair value of $14.5 million on the date of acquisition. The agreement contained a provision under which the Sellers were granted a put option on the Sellers land, building and equipment that were included in a lease under which the Company was provided full and exclusive use of the assets. In addition, the agreement contained a provision under which the Company was granted a call options for the same assets. On January 28, 2011, immediately prior to the Merger, the Company exercised its call option and purchased the remaining assets for an aggregate purchase price of $41.2 million.