NOTE 5: Acquisitions
On August 30, 2013, the Company acquired the majority of the assets of Orchard Supply Hardware (Orchard), a neighborhood hardware and backyard store, primarily located in densely populated markets in California, for approximately $207 million in cash and assumed liabilities. The acquisition provides a smaller store format that allows additional opportunities for growth. Acquisition-related costs were expensed as incurred and were not significant. The aggregate purchase price of this acquisition was preliminarily allocated as follows:
|
| | | | | |
(In millions) | | | August 30, 2013 | |
Purchase Price: | | | | |
Cash paid | | $ | 207 |
| |
| | | | |
Allocation: | | | | |
Cash acquired | | | 4 |
| |
Merchandise inventory | | | 154 |
| |
Property | | | 181 |
| |
Amortizable intangible assets: | | | | |
Trade name | | | 8 |
| |
Other assets | | | 36 |
| |
Goodwill | | | 46 |
| |
Current liabilities assumed | | | (95 | ) | |
Long-term liabilities assumed | | | (127 | ) | |
Total | | $ | 207 |
| |
The trade name acquired has a useful life of 10 years. The goodwill of $46 million is primarily attributable to the synergies expected to arise after the acquisition. Goodwill is expected to be deductible for tax purposes. Pro forma and historical financial information has not been provided as the acquisition was not material to the consolidated financial statements.
