Acquisitions and Divestitures

6 Months Ended

Jun. 30, 2020

3. Acquisitions and Divestitures

Öhlins Intressenter AB Acquisition

On January 10, 2019, the Company completed the acquisition of a 90.5% ownership interest in Öhlins Intressenter AB (“Öhlins”, the “Öhlins Acquisition”), a Swedish technology company that develops premium suspension systems and components for the automotive and motorsport industries for a purchase price of $162 million (including $4 million of cash acquired). The remaining 9.5% ownership interest in Öhlins was retained by Köhlin. Köhlin has an irrevocable right at any time after the third anniversary of the Öhlins Acquisition to sell the KÖ Interest to the Company. Refer to Note 2, Summary of Significant Accounting Policies, for further information on the KÖ Interest.

Pro Forma Results

Pro forma results of operations have not been presented because the effects of the Öhlins Acquisition were not material to the Company’s condensed consolidated results of operations.

Assets Held for Sale

As the Company continues to rationalize its product portfolio and focus on core production lines, the Company has classified a non-core business in the Motorparts segment as held for sale. At June 30, 2020, expected proceeds from a sale would be approximately $16 million, which is representative of its fair value. The related assets and liabilities were classified as held for sale at June 30, 2020 and December 31, 2019. The sale is expected to occur within the next twelve months.

The related assets and liabilities for this non-core business are classified as held for sale at June 30, 2020 and December 31, 2019:



	June 30, 2020			December 31, 2019
Assets
Receivables	$	3		$	5
Inventories	7			8
Other current assets	2			1
Long-lived assets	16			18
Goodwill	3			4
Impairment on carrying value	(7		)	(8		)
Total assets held for sale	$	24		$	28
Liabilities
Accounts payable	$	2		$	4
Accrued liabilities	2			2
Total liabilities held for sale	$	4		$	6

Additionally, during the three months ended June 30, 2020, the Company identified approximately $16 million of property, plant, and equipment, primarily land and buildings and non-core machinery and equipment, and $2 million of related liabilities across multiple segments that are expected be sold in the next twelve months. The related assets and liabilities have been classified as held for sale at June 30, 2020 and are not included in the table above. The Company recognized a non-cash impairment charge of $1 million during the three and six months ended June 30, 2020 related to these assets held for sale.

The assets and liabilities held for sale are recorded in prepayments and other current assets and accrued expenses and other current liabilities in the condensed consolidated balance sheets at June 30, 2020 and December 31, 2019.

On March 1, 2019, in accordance with a stock and asset purchase agreement, the Company sold certain assets and liabilities related to a non-core business, and received sale proceeds of $22 million, subject to customary working capital adjustments, in the six months ended June 30, 2019.