Quarterly report pursuant to Section 13 or 15(d)

Acquisitions Business Combinations

v3.19.1
Acquisitions Business Combinations
3 Months Ended
Mar. 30, 2019
Business Acquisition [Line Items]  
Mergers, Acquisitions and Dispositions Disclosures [Text Block]
Minute Key Holdings, Inc.

On August 10, 2018, the Company completed the acquisition of Minute Key Holdings, Inc. (“MinuteKey”), an innovative leader in self-service key duplicating kiosks for a total consideration reflecting an enterprise value of $156,289.  MinuteKey is headquartered in Boulder, Colorado and has operations in the United States and Canada. MinuteKey is included in the Company's United States and Canada reportable segments.

The Company is in the process of obtaining additional information necessary to finalize the valuation of the assets acquired and liabilities assumed including income tax related amounts. Therefore, the preliminary fair values set forth below are subject to adjustment as additional information is obtained and the valuations are completed. Measurement period adjustments for the quarter ended March 30, 2019 were immaterial.  See Note 5 - Goodwill and Other Intangible Assets, The following table reconciles the preliminary estimated fair value of the acquired assets and assumed liabilities (net of purchase price accounting adjustments) to the total purchase price of the MinuteKey acquisition:
Cash
 
$
1,791

Inventory
 
3,952

Other current assets
 
766

Property and equipment
 
29,888

Goodwill
 
58,604

Customer relationships
 
50,000

Technology
 
19,000

Trade names
 
5,400

Other non-current assets
 
16

Total assets acquired
 
169,417

Less:
 
 
Liabilities assumed
 
(13,128
)
Total purchase price
 
$
156,289



The amount of net sales and operating loss of the acquired business included in the Company's Consolidated Statement of Comprehensive Income for the thirteen weeks ended March 30, 2019 were approximately $11,730 and $(1,541), respectively. Unaudited pro forma financial information has not been presented for MinuteKey as the financial results of MinuteKey were insignificant to the financial results of the Company on a standalone basis.
Big Time Products
On October 1, 2018, the Company acquired NB Parent Company, Inc. and its affiliated companies including Big Time Products, LLC and Rooster Products International, Inc. (collectively, "Big Time"), a leading provider of personal protection and work gear products ranging from work gloves, tool belts and jobsite storage for a purchase price of $348,834. Big Time has business operations throughout North America and its financial results reside in the Company's United States, Canada and Mexico reportable segments.
The Company is in the process of obtaining additional information necessary to finalize the valuation of the assets acquired and liabilities assumed including income tax related amounts. Therefore, the preliminary fair values set forth below are subject to adjustment as additional information is obtained and the valuations are completed. Measurement period adjustments for the quarter ended March 30, 2019 were immaterial.  See Note 5 - Goodwill and Other Intangible Assets, The following table reconciles the preliminary fair value of the acquired assets and assumed liabilities (net of purchase price accounting adjustments) to the total purchase price of the Big Time acquisition:
Cash
 
$
2,507

Accounts receivable
 
41,237

Inventory
 
42,303

Other current assets
 
1,648

Property and equipment
 
3,703

Goodwill
 
127,183

Customer relationships
 
189,000

Trade names
 
21,000

Other non-current assets
 
159

Total assets acquired
 
428,740

Less:
 
 
Liabilities assumed
 
(79,906
)
Total purchase price
 
$
348,834


The amount of net sales and operating income from Big Time included in the Company's consolidated statement of comprehensive income for first quarter fiscal 2019 was approximately $63,827 and $5,775, respectively. The following table provides unaudited pro forma results of the combined entities of Hillman and Big Time Products, had the acquisition occurred at the beginning of fiscal 2018:

 
(Unaudited)
Fiscal Period Ended
 
Thirteen Weeks Ended March 30, 2019
 
Thirteen Weeks Ended March 31, 2018
Net revenues
287,659

 
260,807

Net income (loss)
(35,268
)
 
(13,322
)


The pro forma results are based on assumptions that the Company believes are reasonable under certain circumstances. The pro forma results presented are not intended to be indicative of results that may occur in the future. The underlying pro forma information includes historical results of the Company, the Company's financing arrangements related to the Big Time acquisition, and certain purchase price accounting adjustments, including amortization of acquired intangibles.