Business Combinations and Divestitures

12 Months Ended

Sep. 30, 2024

Business Combinations

Billie Inc.

On November 29, 2021, the Company completed the Billie Acquisition for cash consideration of $309.4, net of cash acquired. As a result of the Acquisition, Billie became a wholly owned subsidiary of the Company. The Company accounted for the Acquisition utilizing the acquisition method of accounting, which requires assets and liabilities to be recognized based on estimates of their acquisition date fair values. The determination of the values of the acquired assets and assumed liabilities, including goodwill, other intangible assets and deferred taxes, requires significant judgement. The Company has calculated fair values of the assets and liabilities acquired from Billie, including goodwill, intangible assets and working capital. The Company completed the final fair value determination of the Acquisition in the fourth quarter of fiscal year 2022.

The Company used variations of the income approach in determining the fair value of intangible assets acquired in the Billie Acquisition. Specifically, we utilized the multi-period excess earnings method to determine the fair value of the definite lived customer relationships acquired and the relief from royalty method to determine the fair value of the definite lived trade name acquired. Our determination of the fair value of the intangible assets acquired involved the use of significant estimates and assumptions related to revenue growth rates, discount rates, customer attrition rates, and royalty rates. Edgewell believes that the fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that marketplace participants would use.

The following table provides the allocation of the purchase price related to the Billie Acquisition based upon the fair value of assets and liabilities assumed:


Current assets	$	17.0
Goodwill	181.2
Intangible assets	136.0
Other assets, including property, plant and equipment, net	3.2
Current liabilities	(6.9)
Deferred tax liabilities	(21.1)
	$	309.4

The acquired goodwill represented the value of expansion into new markets and channels of trade and is not deductible for tax purposes. The intangible assets acquired consisted primarily of the Billie trade name and customer relationships with a weighted average useful life of 19 years. All assets are included in the Company’s Wet Shave segment.

Billie contributed net sales and a loss before income taxes totaling $93.7 and $1.1, respectively, for the post-acquisition period ending September 30, 2022 in the Consolidated Statements of Earnings and Comprehensive Income. The loss before income taxes was driven primarily by amortization expense of acquired intangible assets.

The following acquisition and integration costs related to Billie were included in SG&A and Cost of products sold in the Consolidated Statements of Earnings and Comprehensive Income:


	Fiscal Year
	2024		2023		2022
SG&A	$	2.8	$	7.5	$	9.1
Cost of products sold	3.3		—		0.8
Total acquisition and integration costs	$	6.1	$	7.5	$	9.9

The following summarizes the Company's unaudited pro forma consolidated results of operations for the twelve months ended September 30, 2022, as though the Billie Acquisition occurred on October 1, 2021. The twelve months ended September 30, 2022 include results of Billie over the full period presented.


	Twelve Months Ended September 30,
		2022
Pro forma net sales		$	2,181.7
Pro forma net earnings		104.9

The unaudited pro forma consolidated results of operations were adjusted by pre-tax amortization expense of $1.3 for the year ended September 30, 2022. Additionally, pro forma earnings for the twelve months ended September 30, 2022 exclude $9.9 of pre-tax acquisition costs, which were included in the pro forma earnings for the twelve months ended September 30, 2021. The pro forma earnings were also adjusted to reflect the capital structure as of the Acquisition Date, and all pro forma adjustments have been included with related tax effects. The unaudited pro forma consolidated results of operations are not necessarily indicative of the results obtained had the Billie Acquisition occurred on October 1, 2020, or of those results that may be obtained in the future. Amounts do not reflect any anticipated cost savings or cross-selling opportunities expected to result from the Billie Acquisition.