Acquisitions
 6 Months Ended
Jun. 30, 2016
Business Combinations [Abstract]  
Acquisitions

2. Acquisitions

Nestor Sales LLC

On July 31, 2015, Essendant Co. completed the acquisition of 100% of the capital stock of Nestor Sales LLC (“Nestor”), a leading wholesaler and distributor of tools, equipment and supplies to the transportation industry.  This acquisition accelerates the Company’s growth in the automotive aftermarket, complements the Company’s existing industrial offerings while providing access to new customer segments, and advances a key strategic pillar to diversify into channels and categories that leverage our common platform.

The purchase price was $41.8 million. This acquisition was funded through a combination of cash on hand and cash available under the Company’s revolving credit facility. Purchase accounting for this transaction was completed as of June 30, 2016. 

At June 30, 2016, the allocation of the purchase price was as follows (amounts in thousands):

 

Purchase price, net of cash acquired

$

39,983

 

 

 

 

 

Accounts receivable

 

9,230

 

Inventories

 

12,067

 

Other current assets

 

339

 

Property, plant and equipment, net

 

1,251

 

Other assets

 

752

 

Intangible assets

 

16,930

 

Total assets acquired

 

40,569

 

 

 

 

 

Accounts payable

 

4,992

 

Accrued liabilities

 

1,943

 

Deferred income taxes

 

3,287

 

Other long-term liabilities

 

76

 

Total liabilities assumed

 

10,298

 

     Goodwill

$

9,712

 

 

 

 

 

 

The purchased identifiable intangible assets were as follows (amounts in thousands):

 

Total

 

 

Estimated Life

Customer relationships

$

15,570

 

 

13 years

Trademark

 

1,360

 

 

2-15 years

     Total

$

16,930

 

 

 

Agreement with Staples, Inc.

On February 16, 2016, the Company announced an agreement to purchase from Staples, Inc. contracts and related assets representing more than $550 million in annual sales to minority and woman-owned office supply resellers and their large corporate and other enterprise customers.  The transaction was subject to the successful completion of the proposed merger of Staples and Office Depot, which was abandoned in May 2016. As a result, the Company cancelled its agreement to complete this purchase.