Quarterly report pursuant to Section 13 or 15(d)

Acquisitions

v3.8.0.1
Acquisitions
6 Months Ended
Feb. 28, 2018
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
Note 4. Acquisitions
The Company acquired the stock and certain assets of Mirage Machines, Ltd. ("Mirage") on December 1, 2017 for a purchase price of $16.5 million, net of cash acquired and subject to closing working capital adjustments plus potential future performance-based consideration. This Energy segment tuck-in acquisition is a provider of industrial and energy maintenance tools. This acquisition resulted in the recognition of goodwill in the Company’s consolidated financial statements because the purchase price reflected the future earnings and cash flow potential of Mirage, as well as the complementary strategic fit and resulting synergies. The Company incurred acquisition transaction costs of $0.3 million in the six months ended February 28, 2018 (included in selling, administrative and engineering expenses in the condensed consolidated statement of operations) related to this acquisition.
The Company makes an initial allocation of the purchase price, at the date of acquisition, based upon the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the date of acquisition), the Company will refine its estimates of fair value and adjust the purchase price allocation accordingly.
The preliminary purchase price allocation resulted in $8.9 million of goodwill (which is not deductible for tax purposes) and $4.1 million of intangible assets, including $2.3 million of indefinite lived tradenames and $1.8 million of amortizable customer relationships.
Net sales of $1.9 million are included in our consolidated financial results for both the three and six months ended February 28, 2018 related to Mirage. Because the net sales and earnings impact of the Mirage acquisition are not material to the three and six month periods ended February 28, 2018 and 2017, respectively, the Company has not included the pro forma operating result disclosures otherwise required for acquisitions. The following table summarizes the preliminary estimated fair value of the assets acquired and the liabilities assumed, at the date of acquisition, for Mirage (in thousands):
 
Total
Accounts receivable, net
$
1,090

Inventories, net
3,004

Other current assets
90

Property, plant & equipment
2,014

Goodwill
8,856

Other intangible assets, net
4,126

Trade accounts payable
(1,299
)
Accrued compensation and benefits
(97
)
Income taxes payable
(586
)
Deferred income taxes
(681
)
Cash paid, net of cash acquired
$
16,517