C. Dogfish Head Brewery Transaction On May 8, 2019, the Company entered into definitive agreements to acquire Dogfish Head Brewery (Dogfish Head) and various related operations (the Transaction), through the acquisition of all of the equity interests held by certain private entities in Off-Centered Way LLC, the parent holding company of the Dogfish Head operations. In accordance with these agreements, the Company made a payment of $158.4 million, which was placed in escrow pending the satisfaction of certain closing conditions. The Transaction closed on July 3, 2019, for total consideration of $336.0 million consisting of $173.0 million in cash and 429,291 shares of restricted Class A Common Stock that had an aggregate market value as of July 3, 2019 of $163.0 million, after taking into account a post-closing cash related adjustment. As required under the definitive agreements, 127,146 of the 429,291 shares of restricted Class A Stock have been placed in escrow and will be released no later than July 3, 2029. These shares had a market value on July 3, 2019 of $48.3 million. The timing of the release of these escrowed shares is primarily related to the continued employment with the Company of Samuel A. Calagione III, one of the two Dogfish Head founders. The fair value of the Transaction is estimated at approximately $ 317.7 million. The Company estimates that transaction-related and other non-recurring costs incurred and estimated to be incurred as a result of the Transaction will total approximately $12.0 million . Of this total, $10.0 million had been expensed as of D ecember 28, 2019 and consists of $3.3 million in transaction costs and $ 6.7 million in other non-recurring costs. Of the $10.0 million cost s incurred , $7.8 million w ere recor d ed in general and administrative expense and $2.2 m illion were rec orded in cost of goods so ld within in the accompanying statements of comprehensive income. As part of the Transaction, certain members of Dogfish Head management entered into employment agreements with the Company and were granted 906 shares of restricted stock units that vest in one year and have a fair value of approximately $ 345,000 . The Company funded the cash component of the Transaction through cash on-hand and its existing line of credit. The following table summarizes the acquisition date fair value of the tangible assets, intangible assets, liabilities assumed, and related goodwill acquired from Dogfish Head, as well as the allocation of purchase price paid: Total (In Thousands) Cash and cash equivalents $ 7,476 Accounts receivable 8,081 Inventories 9,286 Prepaid expenses and other current assets 847 Property, plant and equipment 106,964 Goodwill 108,846 Brand 98,500 Other intangible assets 3,800 Other assets 378 Total assets acquired 344,178 Accounts payable 3,861 Accrued expenses and other current liabilities 4,085 Deferred income taxes 18,437 Other liabilities 59 Total liabilities assumed 26,442 Net assets acquired $ 317,736 Cash consideration $ 172,993 Nominal value of equity issued 162,999 Fair Value reduction due to liquidity (18,256 ) Estimated total purchase price $ 317,736 The Company accounted for the acquisition in accordance with the accounting standards codification guidance for business combinations, whereby the total purchase price was allocated to the acquired net tangible and intangible assets of Dogfish Head based on their fair values as of the Transaction closing date. The Company believes that the information available as of the Transaction closing date provides a reasonable basis for estimating the fair values of the assets acquired and liabilities assumed; however, the Company is continuing to finalize these amounts, particularly with respect to income taxes and valuation of inventories, fixed assets, and intangible assets. Thus, the preliminary measurements of fair value reflected are subject to change as additional information becomes available and as additional analysis is performed. The Company expects to finalize the valuation and complete the allocation of the purchase price as soon as practicable, but no later than one year from the closing date of the acquisition, as required. The fair value of the Dogfish Head brand trade name is estimated at approximately $98.5 million and the fair value of customer relationships is estimated at $3.8 million. The Company estimated the Dogfish Head brand trade name will have an indefinite life and customer relationships will have an estimated useful life of 15 years. The customer relationship intangible asset will be amortized on a straight-line basis over the 15 year estimated useful life. The fair value of the deferred income tax liability assumed is $18.4 million, representing the expected future tax consequences of temporary differences between the fair values of the assets acquired and liabilities assumed and their tax basis. The Company used a preliminary consolidated tax rate to determine the net deferred tax liabilities. The Company will record measurement period adjustments as the Company applies the appropriate tax rate for each legal entity within Dogfish Head. The expectation is that the Dogfish Head deferred income taxes will be subject to the Companys consolidated rate. The excess of the purchase price paid over the estimated fair values of the assets and liabilities assumed has been recorded as goodwill in the amount of $108.8 million. Goodwill associated with the acquisition is primarily attributable to the future growth opportunities associated with the Transaction, expected synergies and value of the workforce. The Company believes the majority of the goodwill is deductible for tax purposes. The fair value of the brand trade name was determined utilizing the relief from royalty method which is a form of the income approach. Under this method, a royalty rate based on observed market royalties is applied to projected revenue supporting the trade name and discounted to present value using an appropriate discount rate. The fair value of the property, plant and equipment was determined utilizing the cost and market valuation approaches. The results of operations from Dogfish Head have been included in the Companys consolidated statements of comprehensive income since the July 3, 2019 Transaction closing date. During fiscal year 2019, Dogfish Head represented $48.5 million of the Companys total revenue and $1.6 million of total net income. Transaction costs incurred by the Company in connection with the Transaction were $3.3 million in fiscal year 2019 and were recorded within general and administrative expenses in the Companys consolidated statements of comprehensive income . Consistent with prior periods and considering post-merger reporting structures, the Company will continue to report as one o perating segment. The combined Companys brands are predominantly beverages that are manufactured using similar production processes, have comparable alcohol content, generally fall under the same regulatory environment, and are sold to the same types of customers in similar size quantities at similar price points and through the same channels of distribution. The following unaudited pro forma information has been prepared, as if the Transaction and the related debt financing had occurred as of December 31, 2017, the first day of the Companys 2018 fiscal year. The pro forma amounts reflect the combined historical operational results for Boston Beer and Dogfish Head, after giving effect to adjustments related to the impact of purchase accounting, transaction costs and financing. The unaudited pro forma financial information is not indicative of the operational results that would have been obtained had the Transaction occurred as of that date, nor is it necessarily indicative of the Companys future operational results. The following adjustments have been made: (i) Depreciation and amortization expenses were updated to reflect the fair value adjustments to Dogfish Head property, plant and equipment and intangible assets beginning December 31, 2017. (ii) Transaction costs incurred in the fifty-two weeks ended December 28, 2019 have been re-assigned to the first period of the comparative fiscal year. (iii) Interest expense has been included at a rate of approximately 3% which is consistent with the borrowing rate on the Companys current line of credit. (iv) The tax effects of the pro forma adjustments at an estimated statutory rate of 25.6%. (v) Earnings per share amounts are calculated using the Companys historical weighted average shares outstanding plus the 429,291 shares issued in the merger. Fifty-two weeks ended December 28, 2019 December 29, 2018 (in thousands , ex cept per share data) Net revenue $ 1,304,239 $ 1,103,061 Net income $ 116,868 $ 98,700 Basic earnings per share $ 9.83 $ 8.12 Diluted earnings per share $ 9.73 $ 8.04