Discontinued Operations, Divestitures and Acquisitions (Tables)

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Summary of Selected Financial Information of Discontinued Operations

Summary operating results of Diversey were as follows:

(In millions)	Year Ended December 31, 2017
Net sales	$	1,669.0
Cost of sales	950.4
Gross profit	718.6
Selling, general and administrative expenses	538.3
Amortization expense of intangible assets acquired	23.9
Operating profit	156.4
Other expense, net	(17.0		)
Earnings from discontinued operations before income tax provision	139.4
Income tax provision from discontinued operations(1)	28.0
Net earnings from discontinued operations	$	111.4

⁽¹⁾ 

For the year ended December 31, 2017, net earnings from discontinued operations included tax expense of $28.0 million, primarily driven by a change in our repatriation strategy and offset by a favorable earnings mix in jurisdictions with lower rates.

The following table presents selected financial information regarding cash flows of Diversey in the Consolidated Statements of Cash Flows but are within discontinued operations in the Consolidated Statements of Operations: 

(In millions)	Year Ended December 31, 2017
Non-cash items included in net earnings from discontinued operations:
Depreciation and amortization	$	29.3
Share-based incentive compensation	10.2
Profit sharing expense	3.0
Provision for bad debt	2.3
Capital expenditures	11.9

Summary of Identifiable intangible Assets, Net and Their Useful Life

The following table summarizes the identifiable intangible assets, net and their useful lives.

	Amount		Useful life
	(in millions)		(in years)
Customer relationships	$	25.4	17
Trademarks and tradenames	10.6		15
Technology	6.1		13
Total intangible assets with definite lives	$	42.1

The following table summarizes the identifiable intangible assets, net and their useful lives.

	Amount		Useful life
	(in millions)		(in years)
Customer relationships	$	28.2	13
Trademarks and tradenames	15.6		9.1
Technology	29.6		6.4
Backlog	3.9		0.4
Total intangible assets with definite lives	$	77.3

The following table summarizes the identifiable intangible assets, net and their useful lives.

	Amount		Useful life
	(in millions)		(in years)
Customer relationships	$	14.9	11
Trademarks and tradenames	4.4		5
Total intangible assets with definite lives	$	19.3

Summary of Consideration Transferred and Purchase Price Allocation of Assets Acquired and Liabilities Assumed

The following table summarizes the consideration transferred to acquire AFP and the final allocation of the purchase price among the assets acquired and liabilities assumed.

	Preliminary Allocation		Measurement Period			Final Allocation
(In millions)	As of August 1, 2018		Adjustments			As of September 30, 2019
Total consideration transferred	$	70.8	$	3.3		$	74.1
Assets:
Cash and cash equivalents	2.9		0.4			3.3
Trade receivables, net	30.8		—			30.8
Inventories, net	7.1		—			7.1
Prepaid expenses and other current assets	0.7		—			0.7
Property and equipment, net	3.5		(0.4		)	3.1
Identifiable intangible assets, net	18.6		0.7			19.3
Goodwill	21.6		1.0			22.6
Other non-current assets	0.7		(0.4		)	0.3
Total assets	$	85.9	$	1.3		$	87.2
Liabilities:
Current portion of long-term debt	—		0.1			0.1
Accounts payable	13.8		(2.2		)	11.6
Other current liabilities	1.3		(0.1		)	1.2
Long-term debt, less current portion	—		0.2			0.2
Total liabilities	$	15.1	$	(2.0	)	$	13.1

The following table summarizes the consideration transferred to acquire Fagerdala and the final allocation of the purchase price among the assets acquired and liabilities assumed.

	Preliminary Allocation		Measurement Period			Final Allocation
(In millions)	As of October 2, 2017		Adjustments			As of December 31, 2018
Total consideration transferred	$	106.6	$	(0.4	)	$	106.2
Assets:
Cash and cash equivalents	13.3		—			13.3
Trade receivables, net	22.4		—			22.4
Inventories, net	10.0		0.1			10.1
Prepaid expenses and other current assets	8.4		—			8.4
Property and equipment, net	23.3		—			23.3
Identifiable intangible assets, net	41.4		0.7			42.1
Goodwill	39.3		(1.5		)	37.8
Total assets	$	158.1	$	(0.7	)	$	157.4
Liabilities:
Short-term borrowings	14.0		—			14.0
Accounts payable	6.9		—			6.9
Other current liabilities	15.1		(0.1		)	15.0
Long-term debt, less current portion	3.8		—			3.8
Non-current deferred taxes	11.7		(0.2		)	11.5
Total liabilities	$	51.5	$	(0.3	)	$	51.2

The following table summarizes the consideration transferred to acquire Automated and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed. The allocation of purchase price is still preliminary as the Company finalizes the final purchase price adjustment with the seller and finalizes other aspects of the valuation including deferred taxes and intangible valuations. Preliminary estimates will be finalized within one year of the date of acquisition.

	Revised Preliminary Allocation		Measurement Period			Revised Preliminary Allocation
(In millions)	As of August 1, 2019		Adjustments			As of December 31, 2019
Total consideration transferred	$	445.7	$	—		$	445.7
Assets:
Cash and cash equivalents(1)	16.0		(0.2		)	15.8
Trade receivables, net	37.3		—			37.3
Other receivables(1)	0.3		—			0.3
Inventories, net	40.7		(0.7		)	40.0
Prepaid expenses and other current assets	2.3		—			2.3
Property and equipment, net	79.3		9.3			88.6
Identifiable intangible assets, net	78.7		(1.4		)	77.3
Goodwill	261.3		(7.4		)	253.9
Operating lease right-of-use-assets	—		4.3			4.3
Other non-current assets	24.7		1.3			26.0
Total assets	$	540.6	$	5.2		$	545.8
Liabilities:
Accounts Payable	12.0		—			12.0
Current portion of long-term debt	2.6		—			2.6
Current portion of operating lease liabilities	—		1.5			1.5
Other current liabilities(2)	56.2		(1.1		)	55.1
Long-term debt, less current portion	4.3		—			4.3
Long-term operating lease liabilities, less current portion	—		2.8			2.8
Deferred taxes	—		0.4			0.4
Other non-current liabilities(2)	19.8		1.6			21.4
Total liabilities	$	94.9	$	5.2		$	100.1

⁽¹⁾  On August 1, 2019, $8.6 million in cash was initially recorded as Other receivables in our preliminary opening balance sheet as disclosed in the table included in our third quarter 2019 Form 10-Q filing. The Company determined this balance should be reflected in Cash as the amount was settled to Automated on the day of purchase. This change had no impact on consideration paid or on our Consolidated Balance Sheets as of September 30, 2019.

⁽²⁾ 

On August 1, 2019, $19.4 million was initially recorded within Other non-current liabilities in our preliminary opening balance sheet as disclosed in the table included in our third quarter 2019 Form 10-Q filing. This amount was related to the second installment payment of the deferred incentive compensation plan for Automated's European employees. As two payments were expected to be made within the first twelve months after acquisition, the amount related to the second payment should have been reflected in other current liabilities. The preliminary allocation as of August 1, 2019 now shows the second installment within other current liabilities.