Collaborative Investments

12 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Collaborative Investments

Collaborative Investments

On May 12, 2020, a subsidiary of IDEX entered into a joint venture agreement with a third party to form a limited liability company (the “Joint Venture”) that manufactures and sells high performance elastomer seals for the oil and gas industry to customers within the Kingdom of Saudi Arabia as well as exports these high performance elastomer seals outside of the Kingdom of Saudi Arabia. The Joint Venture is headquartered in Dammam, Saudi Arabia and operates in the Company’s Sealing Solutions reporting unit within the HST segment. During the year ended December 31, 2020, the Company contributed $0.1 million for 55% of the share capital while the third party partner contributed $0.1 million for 45% of the share capital. During the year ended December 31, 2021, the Company contributed an additional $0.6 million and during the year ended December 31, 2022, the third party partner contributed an additional $0.5 million. The Joint Venture has incurred start-up expenses and began sales in July 2022. Since IDEX controls the entity, IDEX has consolidated the Joint Venture and recorded a Noncontrolling interest in its Consolidated Financial Statements.

On June 29, 2021, a subsidiary of IDEX funded a $4.2 million convertible promissory note to a start-up company that provides communication technology to improve individual performance and team coordination for firefighters’ responses. The investment aligns with the FSDP segment’s strategic plan to reduce response time and greatly increase life-safety outcomes and is an extension of FSDP’s smart and connected products. The note bears paid-in-kind interest at a rate of 5% per annum and is secured by the Company’s interest in the intellectual property of the start-up company. Unless earlier converted, the principal amount outstanding and the related accrued interest are due upon the earliest of (a) June 28, 2024, (b) a change in control or (c) when declared due and payable by the Company upon an event of default. On December 22, 2022, the subsidiary of IDEX funded an additional $3.0 million promissory note, which bears paid-in-kind interest at a rate of 5% per annum and is secured by the Company’s interest in the intellectual property of the start-up company. The principal amount outstanding and the related accrued interest are due upon the earliest of (a) December 21, 2025, (b) a change in control or (c) when declared due and payable by the Company upon an event of default.

The notes are included in Other noncurrent assets on the Company’s Consolidated Balance Sheets. In addition, the Company recorded $0.3 million and $0.1 million of accrued interest in Other noncurrent assets on the Company’s Consolidated Balance Sheets for the years ended December 31, 2022 and 2021, respectively. The Company measures the allowance for credit losses under the current expected credit loss model. As of December 31, 2022 and 2021, no allowance for credit losses was recorded.