On November 26, 2014, the Group completed the acquisition of substantially all of the assets of Miller-St. Nazianz, Inc. (“Miller”) for total consideration of $106 million. The acquisition was funded using existing cash balances. Miller is a leading manufacturer of precision spraying equipment. The results of the acquired business for the period from the acquisition date are included in the accompanying Consolidated Financial Statements and are reported in the Agricultural Equipment.
Of the $106 million purchase price, $12 million was attributable to accounts receivable, $18 million to inventory, $16 million to property, plant and equipment, $8 million to goodwill, $62 million to other intangible assets and $10 million to liabilities assumed. Any subsequent changes to the fair value of the assets and liabilities will be recorded as adjustments to those assets and liabilities and the residual amounts will be allocated to goodwill in 2015.
For the intangible assets acquired, the dealer network has a useful life of 20 years, trademarks have a useful life of 3 years, the order backlog has a useful life of 1 year, the patent portfolio has a useful life of 10 years, and developed technology has a useful life of 10 years.
Goodwill generated from the business acquisition is primarily attributable to access to Miller technology and expected synergies from geographic and network expansion, utilization of Powertrain engines in Miller sprayers and cost savings as a result of increased purchasing power and operational synergies. Goodwill of $8 million is deductible for tax purposes.
No significant business combinations took place in 2013, except for the Merger described in the above section “Principal activities”.