Acquisitions and Divestitures

3 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Business Combinations Disclosure

In the first quarter of 2015, the Company completed three acquisitions which are included in Process Management's measurement devices and systems and solutions businesses. Combined annualized sales for these businesses are approximately $32 million. Total cash paid for all businesses was $143 million, net of cash acquired. The Company recognized goodwill of $73 million ($42 million of which is expected to be tax deductible) and other intangible assets of $61 million, primarily customer relationships and intellectual property with a weighted-average life of approximately 11 years.

In connection with its longer-term strategy to divest selected slower-growth businesses, on January 30, 2015 the Company completed the previously announced sale of its mechanical power transmission solutions business to Regal Beloit Corporation for approximately $1.4 billion. After-tax proceeds of approximately $1 billion are expected to be used for share repurchase. This business is reported in the Industrial Automation segment and had fiscal 2014 sales of $605 million and earnings before income taxes of $87 million. Assets and liabilities for this business were classified as held-for-sale in the consolidated balance sheet at December 31, 2014 as follows: other current assets, $180 million (accounts receivable, inventories, other); other assets, $377 million (property, plant and equipment, goodwill, other noncurrent assets); accrued expenses, $81 million (accounts payable and other current liabilities); and other liabilities, $16 million. The Company will recognize an after-tax gain of approximately $520 million from the sale, $0.75 per share. Power transmission solutions designs and manufactures market-leading couplings, bearings, conveying components and gearing and drive components, and provides supporting services and solutions.

In the first quarter of 2014, the Company completed the divestiture of a 51 percent controlling interest in Artesyn and in the fourth quarter of 2014, the Company sold its connectivity solutions business. Both of these businesses had been reported in the Network Power segment. Consolidated operating results for the first quarter of 2014 include combined sales of $164 million and a pretax loss of $10 million (net loss, $8 million) for these businesses.