Acquisitions and Divestitures

9 Months Ended

Sep. 30, 2020

3. Acquisitions and Divestitures

Öhlins Intressenter AB Acquisition

On January 10, 2019, the Company completed the acquisition of a 90.5% ownership interest in Öhlins Intressenter AB (“Öhlins”, the “Öhlins Acquisition”), a Swedish technology company that develops premium suspension systems and components for the automotive and motorsport industries for a purchase price of $162 million (including $4 million of cash acquired). The remaining 9.5% ownership interest in Öhlins was retained by Köhlin. Köhlin has an irrevocable right at any time after the third anniversary of the Öhlins Acquisition to sell the KÖ Interest to the Company. Refer to Note 2, Summary of Significant Accounting Policies, for further information on the KÖ Interest.

Pro Forma Results

Pro forma results of operations have not been presented because the effects of the Öhlins Acquisition were not material to the Company’s condensed consolidated results of operations.

Assets Held for Sale

On October 17, 2020, the Company entered into an agreement to sell a non-core business and its related assets for $15 million. The sale of the business closed on October 31, 2020 and the related assets shortly thereafter. The Company received $5 million of the purchase price at closing with the remaining to be received in installment payments through the fourth quarter of 2023. The Company recognized an impairment on these assets held for sale of $2 million and $1 million during the three and nine months ended September 30, 2020.

The related assets and liabilities for this non-core business are classified as held for sale at September 30, 2020 and December 31, 2019:


	September 30, 2020		December 31, 2019
Assets
Receivables	$	3	$	5
Inventories	7		8
Other current assets	1		1
Long-lived assets	17		18
Goodwill	2		4
Impairment on carrying value	(9)		(8)
Total assets held for sale	$	21	$	28
Liabilities
Accounts payable	$	3	$	4
Accrued liabilities	1		2

Total liabilities held for sale	$	4	$	6

In addition to the non-core business above, at September 30, 2020, the Company had approximately $22 million of property, plant, and equipment, primarily land and buildings and non-core machinery and equipment, and $2 million of related liabilities across multiple segments that are expected to be sold in the next twelve months. The related assets and liabilities have been classified as held for sale at September 30, 2020 and are not included in the table above. The Company recognized a non-cash impairment charge of $1 million during the nine months ended September 30, 2020 related to these assets held for sale.

The assets and liabilities held for sale are recorded in prepayments and other current assets and accrued expenses and other current liabilities in the condensed consolidated balance sheets at September 30, 2020 and December 31, 2019.

On March 1, 2019, in accordance with a stock and asset purchase agreement, the Company sold certain assets and liabilities related to a non-core business and received sale proceeds of $22 million, subject to customary working capital adjustments. During the three and nine months ended September 30, 2020, the Company received $3 million of proceeds due to the finalization of working capital adjustments.