Quarterly report pursuant to Section 13 or 15(d)

Acquisition

v3.3.1.900
Acquisition
9 Months Ended
Oct. 31, 2015
Acquisition  
Acquisition

 

 

2.  Acquisition

 

Jos. A. Bank

 

On June 18, 2014, we acquired 100% of the outstanding common stock of Jos. A. Bank, a men’s specialty apparel retailer, for $65.00 net per share in cash, or total consideration of approximately $1.8 billion. The acquisition was funded primarily by a $1.1 billion term loan facility, the issuance of $600.0 million in senior unsecured notes and borrowings under an asset-based credit facility (see Note 4).

 

We incurred integration and other costs related to Jos. A. Bank totaling $4.7 million and $15.5 million for the three and nine months ended October 31, 2015, respectively, which is included in selling, general and administrative expenses (“SG&A”) in the condensed consolidated statement of (loss) earnings.  For the three and nine months ended November 1, 2014, we incurred $27.3 million and $44.7 million, respectively, of integration and other costs related to Jos. A. Bank of which $10.6 million is included in cost of sales for the three and nine months ended November 1, 2014, respectively, and the remainder is included in SG&A in the condensed consolidated statement of (loss) earnings.  For the nine months ended November 1, 2014, we incurred acquisition-related costs for Jos. A. Bank totaling $43.5 million.    For the three and nine months ended October 31, 2015 and the three months ended November 1, 2014, we did not incur any acquisition-related costs.

 

The following table summarizes the final allocation of fair values of the identifiable assets acquired and liabilities assumed in the Jos. A. Bank acquisition (amounts in millions):

 

Cash

 

$

328.9

 

Accounts receivable (mainly credit card receivables)

 

8.3

 

Inventories

 

328.0

 

Other current assets

 

56.4

 

Property and equipment

 

165.3

 

Goodwill

 

769.0

 

Intangible assets

 

622.2

 

Accounts payable, accrued expenses and other current liabilities

 

(155.0

)

Other liabilities (mainly deferred income taxes)

 

(302.8

)

 

 

 

 

Total purchase price

 

1,820.3

 

Less: Cash acquired

 

(328.9

)

 

 

 

 

Total purchase price, net of cash acquired

 

$

1,491.4

 

 

 

 

 

 

 

Within the measurement period which closed during the second quarter of 2015, we made purchase accounting adjustments primarily related to deferred income taxes.  None of these measurement period adjustments had a material impact on the purchase price allocation. Goodwill is calculated as the excess of the purchase price over the net assets acquired.  The goodwill recognized is attributable to growth opportunities and expected synergies.  All of the goodwill has been assigned to our retail reporting segment and is non-deductible for tax purposes.

 

The following table presents unaudited pro forma consolidated financial information as if the closing of our acquisition of Jos. A. Bank had occurred on February 3, 2013 (in thousands, except per share data):

 

 

 

For the Nine
Months Ended
November 1, 2014

 

 

 

 

 

Total net sales.

 

$

2,668,460 

 

 

 

 

 

 

Net earnings attributable to common shareholders.

 

$

76,349 

 

 

 

 

 

 

Net earnings per common share allocated to common shareholders:

 

 

 

Basic

 

$

1.59 

 

 

 

 

 

 

Diluted

 

$

1.58 

 

 

 

 

 

 

 

The pro forma financial information presented above has been prepared by combining our historical results and the historical results of Jos. A. Bank and further reflects the effect of purchase accounting adjustments and the elimination of transaction costs, among other items.  This pro forma information is not necessarily indicative of the results of operations that actually would have resulted had the Jos. A. Bank acquisition occurred on the date indicated above or that may result in the future and does not reflect potential synergies, integration costs or other such costs and savings.