ACQUISITIONS AND DIVESTITURES

Acquisitions

The results of operations for acquired businesses are included in the Condensed Consolidated Financial Statements from the dates of acquisition. Acquisition related expenses, which were recorded in operating expenses as incurred, were $0.2 million and $1.3 million for the three and nine months ended September 27, 2014, respectively, and immaterial and $3.2 million for the three and nine months ended September 28, 2013, respectively.

2014 Acquisitions

On June 30, 2014, the Company acquired all of the stock of Benshaw. Inc., ("Benshaw") for $51.0 million. Benshaw is a manufacturer of custom low and medium voltage variable frequency drives and soft starters. It is reported in the Electrical segment.

The acquisition of Benshaw was accounted for as a purchase in accordance with FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships and technology, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill attributable to the allocation of the purchase price is based upon a preliminary valuation of assets acquired and liabilities assumed. The Company expects the amount of goodwill will be deductible for United States tax purposes.

The preliminary purchase price allocation for Benshaw was as follows:



	As of June 30, 2014
Current assets	$	0.5
Trade receivables	10.4
Inventories	22.4
Property, plant and equipment	4.5
Intangible assets, subject to amortization	14.6
Goodwill	9.9
Total assets acquired	62.3
Accounts payable	3.7
Current liabilities assumed	2.2
Long-term liabilities assumed	5.4
Net assets acquired	$	51.0

On February 7, 2014, the Company acquired Hy-Bon Engineering Company, Inc. ("Hy-Bon") for $78.0 million. Hy-Bon is a leader in vapor recovery solutions for oil and gas applications and is reported in the Electrical segment.

The acquisition of Hy-Bon was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill attributable to the allocation of the purchase price is based upon a preliminary valuation of assets acquired and liabilities assumed. The Company does not expect the amount of goodwill will be deductible for tax purposes under current United States tax law.

The purchase price allocation for Hy-Bon was as follows:



	As of February 7, 2014
Current assets	$	1.7
Trade receivables	11.5
Inventories	14.3
Property, plant and equipment	8.1
Intangible assets, subject to amortization	13.4
Goodwill	40.6
Other assets	0.1
Total assets acquired	89.7
Accounts payable	5.5
Current liabilities assumed	5.1
Long-term liabilities assumed	1.1
Net assets acquired	$	78.0

2013 Acquisitions

On February 8, 2013, the Company acquired the RAM motor business ("RAM") previously owned by Schneider Electric for $6.0 million. This business manufactures hermetic motors from 250 hp to 2,500 hp for commercial HVAC applications and is reported in the Electrical segment.

The acquisition of RAM was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The allocation of the purchase price is based upon a valuation of assets acquired and liabilities assumed.

The purchase price allocation for RAM was as follows:



	As of February 8, 2013
Current assets	$	1.2
Trade receivables	1.9
Inventories	7.7
Property, plant and equipment	2.1
Other assets	0.1
Total assets acquired	13.0
Accounts payable	1.1
Current liabilities assumed	5.4
Long-term liabilities assumed	0.5
Net assets acquired	$	6.0

On September 3, 2013, the Company purchased additional shares owned by the noncontrolling interest in its joint venture in a South African distribution business increasing its ownership from 60.0% to 80.0% for $1.7 million. The Company historically consolidated the results of the South African distribution business into the Company's condensed consolidated financial statements and presented the portion of its investment not owned by the Company as noncontrolling interest. The noncontrolling interest in the South African distribution business was reduced to 20.0% as of September 3, 2013.

On November 19, 2013, the Company acquired Cemp s.r.l. ("Cemp"), an Italy based electric motor company for $34.6 million. Cemp is a leading designer, manufacturer and marketer of flameproof electric motors, and is reported in the Electrical segment.

The acquisition of Cemp was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill attributable to the allocation of the purchase price is based upon a valuation of assets acquired and liabilities assumed. The Company does not expect the amount of goodwill be deductible for tax purposes under current Italian tax law.

The purchase price allocation for Cemp was as follows:



	As of November 19, 2013
Current assets	$	3.1
Trade receivables	6.6
Inventories	7.8
Property, plant and equipment	3.7
Intangible assets, subject to amortization	12.6
Goodwill	14.8
Total assets acquired	48.6
Accounts payable	5.5
Current liabilities assumed	3.0
Long-term liabilities assumed	5.5
Net assets acquired	$	34.6

Pro Forma Consolidated Results

The following supplemental pro forma information presents the financial results for the three and nine months ended September 27, 2014 and September 28, 2013, respectively, as if the acquisitions of Benshaw and Hy-Bon had occurred on December 29, 2013. Based upon the timing of the Company's fiscal 2014 acquisitions, financial results for the three months ended September 27, 2014 included the financial results of the acquisitions of Benshaw and Hy-Bon. Also presented are the financial results for the three and nine months ended September 28, 2013 as if the acquisitions of Benshaw, Hy-Bon, Cemp and RAM had occurred on December 30, 2012.

Such pro forma amounts do not include any estimated cost synergies or other effects of the integration of the acquisitions. Accordingly, the pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on the dates indicated. Pro forma amounts are also not indicative of any future consolidated operating results of the Company (see Note 5 of the Notes to the Condensed Consolidated Financial Statements for amortization expense related to intangible assets acquired).



	Nine Months Ended
	September 27, 2014
Pro forma net sales	$	2,515.5
Pro forma net income	145.3

Basic earnings per share as reported	$	3.27
Pro forma basic earnings per share	3.22

Diluted earnings per share as reported	$	3.25
Pro forma diluted earnings per share	3.20



	Three Months Ended		Nine Months Ended
	September 28, 2013		September 28, 2013
Pro forma net sales	$	801.5	$	2,247.9
Pro forma net income	53.2		156.2

Basic earnings per share as reported	$	1.17	$	3.40
Pro forma basic earnings per share	1.18		3.47

Diluted earnings per share as reported	$	1.16	$	3.38
Pro forma diluted earnings per share	1.17		3.45

2014 Divestitures

The Company sold its shares of a joint venture located in Shanghai, China ("Jinling") on September 11, 2014 which was previously accounted for as a consolidated joint venture and was reported in the Electrical segment. The disposal of Jinling was determined to not qualify for presentation as discontinued operations in the Company's Condensed Consolidated Financial Statements, in accordance with ASU 2014-08. A loss of approximately $1.9 million was recorded in Operating Expenses in the Condensed Consolidated Statements of Income for the three and nine months ended September 27, 2014.