Held For Sale, Divestitures and Acquisitions (Tables)

12 Months Ended

Jan. 01, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions

The preliminary purchase price of the Rexnord PMC business consisted of the following (in millions):

Fair value of Company common stock issued to Zurn (a)	$	3,896.3
Stock based compensation (b)	47.1
Adjustment amount (c)	30.9
Land Financing Fees paid by the Company (d)	3.9
Preexisting Relationships (e)	(0.8)
Preliminary purchase price	$	3,977.4

(a) Represents approximately 27 million new shares of Company common stock issued to Zurn stockholders in the exchange offer, based on the Company's October 4, 2021, closing share price of $151.00, less the Special Dividend amount of $6.99, which the Zurn stockholders were not entitled to receive.

(b) Represents fair value of replacement equity-based awards and Company common stock issued in settlement of other Zurn share based awards. The portion of the fair value attributable to pre-Merger service was recorded as part of the consideration transferred in the Merger - see Note 10.

(c) Represents estimated working capital adjustment pursuant to the terms of the purchase agreement.

(d) Represents financing fees paid by the Company for the Bridge Facility and Land Term Facility (as defined in Note 7) that were determined to be costs of Zurn.

(e) Represents effective settlement of outstanding payables and receivables between the Company and the Rexnord PMC business. No gain or loss was recognized on this settlement.

Schedule of Assets Acquired and Liabilities Assumed

The preliminary fair value of the assets acquired and liabilities and noncontrolling interests assumed were as follows (in millions):

	as of October 4, 2021
Cash and Cash Equivalents	$	192.8
Trade Receivables	186.9
Inventories	262.5
Prepaid Expenses and Other Current Assets	21.0
Assets Held for Sale	1.4
Deferred Income Tax Benefits	8.8
Property, Plant and Equipment	412.3
Operating Lease Assets	46.4
Intangible Assets	1,831.0
Other Noncurrent Assets	12.3
Accounts Payable	(121.1)
Accrued Compensation and Benefits	(44.0)
Other Accrued Expenses	(55.7)
Current Operating Lease Liabilities	(8.1)
Current Maturities of Long-Term Debt	(2.5)
Long-Term Debt	(558.2)
Deferred Income Taxes	(508.2)
Pension and Other Post Retirement Benefits	(75.1)
Noncurrent Operating Lease Liabilities	(38.0)
Other Noncurrent Liabilities	(17.0)
Total Identifiable Net Assets	1,547.5
Goodwill	2,433.2
Noncontrolling Interests	(3.3)
Preliminary purchase price	$	3,977.4

The preliminary fair value of the assets acquired and liabilities assumed were as follows (in millions):

	as of November 23, 2021
Cash and Cash Equivalents	$	1.1
Trade Receivables	19.1
Inventories	12.8
Prepaid Expenses and Other Current Assets	7.6
Property, Plant and Equipment	3.7
Intangible Assets(1)	160.0
Accounts Payable	(4.7)
Accrued Compensation and Benefits	(2.6)
Other Accrued Expenses	(25.0)
Total Identifiable Net Assets	172.0
Goodwill	143.6
Preliminary purchase price	$	315.6

(1) Includes $124.0 million related to Customer Relationships, $18.0 million related to Trademarks and $18.0 million related to Technology.

Summary of the Identifiable Intangible Assets

The fair value and weighted average useful life of the identifiable intangible assets are as follows (in millions):

	Fair Value		Weighted Average Useful Life (Years)
Trademarks(1)	$	225.0	10
Customer Relationships(2)	1,519.0		17
Technology(3)	87.0		12
Total Identifiable Intangible Assets	$	1,831.0

The fair value estimates for identifiable intangible assets are preliminary and are based upon assumptions that market participants would use in pricing an asset.

(1) The Rexnord PMC business Trademarks were valued using the relief from royalty method, which considers both the market approach and the income approach.

(2) The fair value of Customer Relationships was valued using a multi-period excess earnings method, a form of the income approach, which incorporates the estimated future cash flows to be generated from the Rexnord PMC business's existing customer base.

(3) The Rexnord PMC business Technology were valued using the relief from royalty method, which considers both the market approach and the income approach.

Supplemental Pro Forma Information

Unaudited Supplemental Pro Forma Financial Information

	For the Year Ended January 1, 2022		For the Year Ended January 2, 2021
Net Sales	$	4,780.7	$	4,136.8
Net Income Attributable to Regal Rexnord Corporation	$	347.3	$	84.8
Earnings Per Share Attributable to Regal Rexnord Corporation:
Basic	$	5.13	$	1.25
Assuming Dilution	$	5.09	$	1.25