of Lawry's sales is approximately 90% to our consumer
segment and 10% to our industrial segment.
The purchase price was $604 million in cash, the
assumption of certain liabilities relating to the purchased
assets and transaction costs of $11.5 million. We used
cash on hand and borrowings under our commercial
paper program to fund the purchase price. In September
2008 we issued $250 million in medium-term debt
($248 million in net proceeds) to repay a portion of our
outstanding commercial paper issued to fund the Lawry's
acquisition (see note 7 of the financial statements).
The transaction has undergone a regulatory review and
the Federal Trade Commission issued its final order.
In compliance with that order, we sold our Season-All
business to Morton International, Inc. With annual
sales of approximately
$18 million, the Season-All
business was sold for
$15 million in cash (with net cash
proceeds of
$14 million). This resulted in a pre-tax gain
of
$12.9 million which was recorded as part of Other
income in our income statement.
We are accounting for the acquisition of Lawry's as
a purchase of a business under U.S. GAAP. Under the
purchase method of accounting, the assets and liabilities
of Lawry's are recorded as of the acquisition date, at
their respective fair values, and consolidated with our
assets and liabilities. The excess purchase price over the
estimated fair value of the tangible net assets purchased
was
$606.2 million. The allocation of the purchase price
in these financial statements is based on preliminary
estimates, subject to revision after appraisals have been
finalized. Revisions to the allocation, which may be
significant, will be reported as changes to various assets
and liabilities, including goodwill and other intangible
assets. As of November 30, 2008, $202.0 million was
allocated to other intangible assets and $404.2 million
to goodwill. The significant amount of goodwill is due to
the profitability of the Lawry's business and our plans
to grow this business to achieve synergies during the
integration process. We expect the final valuation to
result in a value for brands and other intangible assets,
a portion of which will be amortizable and a portion of
which will be
non-amortizable.
We have
included an
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estimate of intangible asset amortization in our income
statement since the date of acquisition. For tax purposes,
goodwill resulting from this acquisition is deductible.
In the financial statements we have not included
pro-forma historical information, as if the results of
Lawry's had been included from the beginning of the
periods presented, since the use of forward-looking
information would be necessary in order to meaningfully
present the effects of the acquisition. Forward-looking
information, rather than historical information, would be
required as Lawry's was operated as a part of a larger
business within Unilever and the expense structure
and level of brand support will be different under our
ownership. Net sales for the year ended November 30,
2008 from this acquisition were $40.6 million. Operating
expenses for 2008 include amortization of intangible
assets from the Lawry's acquisition of
$2.0 million.
In February 2008, we purchased Billy Bee Honey
Products Ltd. (Billy Bee) for $76.4 million in cash,
a business which operates in North America and is
primarily included in our consumer segment from the
date of acquisition. Billy Bee markets and sells under the
"Billy Bee" and "Doyon®" brands. The annual sales of
this business are approximately $37.0 million and include
branded, private label and industrial products.
The excess purchase price over the estimated
fair value of the tangible net assets purchased was
$74.2 million. The allocation of the purchase price in
these financial statements is based on preliminary
estimates, subject to revision after appraisals have been
finalized. Revisions to the allocation, which may be
significant, will be reported as changes to various assets
and liabilities, including goodwill and other intangible
assets. We have preliminarily allocated
$18.6 million to
other intangible assets and $55.6 million to goodwill. We
expect the final valuation to result in a value for brands
and other intangible assets, a portion of which will be
amortizable and a portion of which will be non-amortizable.
We have included an estimate of intangible asset
amortization in our income statement since the date of
acquisition.
In June 2006, we purchased the assets of the
Simply Asia Foods business for $97.6 million in cash.
The $97.6 million purchase price was initially funded
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