3.Acquisitions and Dispositions

Acquisitions

2015 Activity

In December 2014, subsequent to the company’s fiscal year end for international operations, the company entered into a licensing agreement and business acquisition with Aseptix Health Sciences NV. With pre-acquisition annual sales of less than $1 million, the acquired business became part of the company’s Global Institutional reportable segment during the first quarter of 2015.

Also in December 2014, subsequent to the company’s fiscal year end for international operations, the company acquired Commercial Pest Control Pty Ltd, an Australian commercial pest control company. With pre-acquisition annual sales of less than $1 million, the acquired business became part of the company’s Other segment during the first quarter of 2015.

In April 2015, the company acquired certain assets from Clariant AG, based in Brazil and Argentina. With pre-acquisition annual sales of approximately $4 million, the acquired business became part of the company’s Global Industrial reportable segment during the second quarter of 2015. An immaterial portion of the transaction based in Colombia closed effective September 2015, which is subsequent to the company’s quarter end for international operations.

In June 2015, the company acquired Jianghai Environmental Protection Co. Ltd (“Jianghai”), an industrial water treatment company headquartered in Changzhou, China. The purchase price of the acquired business is approximately $190 million. Significant assets acquired include customer relationships, trademarks and other technology, with goodwill calculated as the excess of consideration transferred over the fair value of identifiable net assets acquired. With pre-acquisition annual sales of approximately $90 million, the acquired business became part of the company’s Global Industrial reportable segment during the third quarter of 2015. The purchase price allocation is preliminary, pending completion of fair value determination of the acquired assets and liabilities.

2015 Activity (continued)

In August 2015, the company entered into an agreement to acquire the U.S. operations of Charlotte, N.C. - based Swisher Hygiene Inc. (“Swisher”) for approximately $40 million. Swisher provides hygiene and sanitizing solutions for the foodservice, hospitality, retail and healthcare markets. Sales in 2014 for the operations included in the agreement were approximately $176 million. The transaction closed on November 2, 2015, subsequent to the company’s third quarter end, and will become part of the company’s Global Institutional reportable segment in the fourth quarter of 2015.

2014 Activity

In December 2013, subsequent to the company’s year end for international operations, the company completed the acquisition of AkzoNobel’s Purate business, which specializes in global antimicrobial water treatment. Pre-acquisition annual sales of the business were approximately $23 million. The acquired business became part of the company’s Global Industrial reportable segment during the first quarter of 2014.

In March 2014, the company acquired AK Kraus & Hiller Schädlingsbekämpfung, one of Germany’s leading commercial pest elimination service providers. Pre-acquisition annual sales of the business were approximately $4 million. The acquired business became part of the company’s Other segment during the second quarter of 2014.

In March 2014, the company purchased the remaining interest in a joint venture held in South Africa. The transaction was not significant to the company’s operations.

In June 2014, the company purchased the remaining interest in a joint venture in Indonesia. The transaction was not significant to the company’s operations.

In July 2014, the company obtained control of a joint venture in the United Arab Emirates through an amendment in the related shareholder agreements. This amendment resulted in the company consolidating the entity and removing the related equity method investment. The transaction was not significant to the company’s operations. As discussed in Note 2, the company recognized a gain of $5.0 million during the third quarter of 2014 as a result of this transaction.

In July 2014, the company acquired the chemical division of AKJ Industries, a leading provider of chemical solutions in the coal industry. Pre-acquisition annual sales of the business were approximately $21 million. The acquired business became part of the company’s Global Industrial reportable segment during the third quarter of 2014.

Acquisition summary

Acquisitions during the first nine months of 2015 and all of 2014 were not material to the company’s consolidated financial statements. The aggregate purchase price of acquisitions has been reduced for any cash or cash equivalents acquired with the acquisitions. Based upon purchase price allocations, the components of the aggregate purchase prices of completed acquisitions during the third quarter and the first nine months of 2015 and 2014 are shown in the following table.

	Third Quarter Ended						Nine Months Ended
	September 30						September 30
(millions)	2015			2014			2015			2014

Net tangible assets acquired, including impact of joint venture consolidation activity	$	49.4		$	(10.8	)	$	52.9		$	12.9
Identifiable intangible assets
Customer relationships	25.6			27.7			28.2			30.6
Patents	13.5			—			13.5			—
Trademarks	3.5			2.6			3.6			3.4
Other technology	—			1.2			2.7			4.1
Non-compete	—			—			—			0.1

Total intangible assets	42.6			31.5			48.0			38.2
Goodwill	83.5			16.8			90.2			28.1

Total aggregate purchase price	175.5			37.5			191.1			79.2
Acquisition related liabilities and contingent consideration	(60.7		)	14.9			(60.8		)	15.1


Net cash paid for acquisitions, including contingent consideration	$	114.8		$	52.4		$	130.3		$	94.3

The acquisition related liability activity during 2015 is related to hold-back liabilities as part of the Jianghai acquisition, payable from the fourth quarter of 2015 through the third quarter of 2016. The contingent consideration activity during 2014 primarily relates to payments on legacy Nalco acquisitions. The weighted average useful lives of identifiable intangible assets acquired during the first nine months of 2015 and 2014, as shown in the previous table, were 15 and 10 years, respectively.

Champion acquisition

On April 10, 2013, the company completed its acquisition of Champion, a global energy specialty products and services company delivering its offerings to the oil and gas industry.

During the first quarter of 2014 purchase price allocations were finalized, resulting in net adjustments of $16.9 million to the value of Champion assets acquired and liabilities assumed, with an offset to goodwill. The adjustments primarily related to estimated liabilities, updated property, plant and equipment values and deferred taxes. As the adjustments were not significant, they were recorded in 2014 upon identification.

In accordance with the acquisition agreement, except under limited circumstances, the company was required to pay an additional amount in cash, up to $100 million in the aggregate, equal to 50% of the incremental tax on the merger consideration as a result of increases in applicable gains and investment taxes after December 31, 2012. In January 2014, in accordance with the above discussion, an additional payment of $86.4 million was made to the acquired entity’s former stockholders.

The company deposited approximately $100 million of the original Champion purchase price consideration in an escrow account to fund post-closing adjustments to the consideration, and covenant and other indemnification obligations of the acquired entities’ former stockholders for a period of two years following the effective date of the acquisition. During the third quarter of 2015, the company reached a settlement of approximately $35 million regarding the indemnification obligations of the acquired entities’ former stockholders. The recovered funds adjusted certain other asset and other liability positions of approximately $29 million on the company’s Consolidated Balance Sheet. Approximately $4 million was reflected in selling, general and administrative expenses, with the remainder recorded in special (gains) and charges, both within the Consolidated Statement of Income.

Dispositions

In June 2015, the company sold a portion of its Ecovation business, resulting in a loss of $13.7 million ($8.6 after tax), recorded in special (gains) and charges. The business was part of the company’s Global Industrial reportable segment.

In April 2014, the company sold an immaterial business in Italy that was part of the company’s Global Institutional reportable segment.