During the fourth quarter of 2023, the Company began the process to sell a small, industrial specialty chemicals business that reports within the MS segment. The related assets and liabilities of the business were classified as held-for-sale in the Company’s condensed consolidated balance sheet and measured at the lower of their carrying amount or fair value less cost to sell. The assets and liabilities continue to be marketed for sale and are classified as held-for-sale at March 30, 2024.

The proposed disposition of the business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements since the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results.

Assets-held-for-sale and liabilities-held-for-sale recorded on the balance sheet were $8.0 million and $0.9 million, respectively, as of March 30, 2024. The loss before income taxes attributable to the business was not significant except for the impairment charge of $13.0 million as noted in Note 3 for the three months ended March 30, 2024.

During the first quarter of 2024, the Company completed the sale of its Pipeline and Industrials Materials (“PIM”) business, which became part of the Company with the acquisition of CMC Materials, to SCF Partners, Inc. The PIM business specializes in the manufacture and sale of drag reducing agents and a range of valve maintenance products and services for the oil and gas industry, and reported into the MS segment of the Company.

The Company received gross cash proceeds of $263.2 million, or expected net proceeds of $256.8 million, which remains subject to customary final post-closing adjustment and up to $25.0 million in cash earn-out payments contingent upon the performance of the PIM business in 2025 and 2026.

The Company’s policy is to account for the contingent consideration arrangement in accordance with ASC 450, Contingencies (Subtopic 450-30). Under this approach, the Company recognizes the contingent consideration receivable in earnings after the contingency is resolved. Accordingly, to determine the initial gain on the sale of the PIM business, the Company did not include an amount related to the contingent consideration arrangement as part of the consideration received.

The following table summarizes the fair value of the sale proceeds received in connection with the divestiture, which are subject to final post-closing adjustment:


(In thousands)	March 1, 2024
Cash proceeds received, gross	$	263,208
Preliminary working capital adjustment	1,819
Cash transferred to the buyer on the closing balance sheet	(230)
Direct costs to sell	(8,005)
Fair value of sale consideration	$	256,792

The disposition of the PIM business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements since the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results.

The carrying amount of net assets associated with the PIM business was approximately $252.9 million. The major classes of assets and liabilities sold consisted of the following:


(In thousands)
Assets:	March 1, 2024
Current assets	$	58,684
Property, Plant and Equipment, net	118,146
Intangible assets, net	76,692
Goodwill	12,707
Other assets	2,318
Total assets-held-for sale	$	268,547

Liabilities:
Accounts payable	$	9,485
Accrued expenses	4,396
Long-term liabilities	1,737
Total liabilities-held-for sale	$	15,618

As a result of the sale of the PIM business, the Company recognized a pre-tax gain of $4.8 million, inclusive of a $1.0 million gain reclassified from accumulated other comprehensive income for foreign currency translation, presented in selling, general and administrative (“SG&A”) expenses on the condensed consolidated statements of operations for the three months ended March 30, 2024. The Company recorded an income tax expense associated with the PIM divestiture of approximately $1.1 million for the three months ended March 30, 2024.