Business Acquisitions and Investments

6 Months Ended

Jun. 26, 2021

Business Combinations [Abstract]

Business Acquisitions and Investments

2. Business Acquisitions and Investments

DPL Holding Corporation (“Dayton Parts”)

On June 25, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire 100% of the equity interests of Dayton Parts, a manufacturer of undercarriage and other parts designed to serve the heavy-duty vehicle sector of the aftermarket, for aggregate consideration of $338 million, subject to certain customary adjustments based on, among other things, the amount of cash, indebtedness and working capital in the business of Dayton Parts as of the closing date of the transaction. The transaction is subject to customary closing conditions, including the expiration or earlier termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. We expect the transaction to close in the second half of 2021.

In connection with entering into the Merger Agreement, we have entered into a commitment letter, dated as of June 25, 2021, with certain lenders as counterparties, whereby the lenders have committed to provide us with a new $600 million revolving credit facility (the “New Facility”) contingent on the satisfaction of customary conditions. The New Facility would replace our existing $100 million revolving credit facility. We may finance all or a portion of the merger transaction and related fees and expenses with borrowings under the New Facility.

Power Train Industries, Inc. (“PTI”)

On January 2, 2020, we acquired the remaining outstanding stock of PTI not already owned by the Company. The total purchase price for PTI was approximately $30.7 million, which included $18.4 million paid for the remaining 60% of the outstanding stock, subject to customary purchase price adjustments, and $12.3 million which represents the fair value of the previously held 40% equity interest in PTI that was acquired by the Company in 2016. As a result of the acquisition, we recorded a gain of $2.5 million in other (expense) income, net during the quarter ended March 28, 2020 from the increase in fair value of our original 40% interest in PTI. We previously accounted for our 40% interest as an equity-method investment.