Graco Inc.

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SEC Filings

10-K
GRACO INC filed this Form 10-K on 02/21/2017
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Acquired identifiable intangible assets and estimated useful life were as follows (dollars in thousands): 
 
 
 
Estimated
 Life (years) 
Customer relationships
$
47,100

 
12
Trade names
13,000

 
Indefinite
Total identifiable intangible assets
$
60,100

 
 

Approximately two-thirds of the goodwill acquired with HiP is deductible for tax purposes.

On January 2, 2015, the Company acquired White Knight Fluid Handling (“White Knight”) for $16 million cash and a commitment for additional consideration if future revenues exceed certain thresholds, initially valued at $8 million. The maximum payout is not limited. White Knight designs and manufactures high purity, metal-free pumps used in the production process of manufacturing semiconductors, solar panels, LED flat panel displays and various other electronics. The products, brands and distribution channels of White Knight expand and complement the offerings of the Company’s Process segment. The purchase price was allocated based on estimated fair values, including $12 million of goodwill, $9 million of other identifiable intangible assets and $3 million of net tangible assets.

On October 1, 2014, the Company acquired the stock of Alco Valves Group (“Alco”) for £72 million cash, subject to normal post-closing purchase price adjustments. Alco is a United Kingdom based manufacturer of high quality, high pressure valves used in the oil and natural gas industry and in other industrial processes. Alco’s products and business relationships enhance Graco’s position in the oil and natural gas industry and complement Graco’s core competencies of designing and manufacturing advanced flow control technologies. Alco revenues for the twelve months preceding the acquisition were approximately £19 million. Results of Alco operations have been included in the Company’s Process segment starting from the date of acquisition, including sales of $14 million in 2016, $23 million in 2015 and $6 million in 2014.

Purchase consideration was allocated to assets acquired and liabilities assumed based on estimated fair values as follows (in thousands): 
Cash and cash equivalents
$
1,929

Accounts receivable
9,821

Inventories
9,196

Other current assets
343

Property, plant and equipment
1,047

Other non-current assets
225

Identifiable intangible assets
30,348

Goodwill
77,545

Total assets acquired
130,454

Current liabilities assumed
(3,214
)
Deferred income taxes
(6,266
)
Net assets acquired
$
120,974


Post-closing working capital adjustments that completed the Alco purchase price allocation, acquired in the fourth quarter of 2014, resulted in a $4 million addition to goodwill in the first quarter of 2015.

None of the goodwill acquired with Alco is deductible for tax purposes.

Acquired identifiable intangible assets and estimated useful life were as follows (dollars in thousands):
 
 
 
Estimated
Life (years)
Customer relationships
$
22,883

 
10
Trade names
7,465

 
Indefinite
Total identifiable intangible assets
$
30,348

 
 


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