Divestitures

3 Months Ended

Dec. 31, 2021

Discontinued Operations And Disposal Groups [Abstract]

4. Divestitures

Solar Products

On December 1, 2021, the Company completed the divestiture of its solar products business ("Solar Products") in order to focus on the Company’s core exteriors business. The following table shows a reconciliation of the loss on sale of business as a result of the divestiture (in millions):


	Three Months Ended
	December 31, 2021
Consideration received	$	30.1
Less: transaction costs		(0.9	)
Adjusted consideration received		29.2

Goodwill		(13.6	)
Customer relationship intangible asset		(10.0	)
Inventory		(27.7	)
Property and equipment, net		(0.5	)
Other liabilities and assets, net		0.3
Total assets and liabilities divested		(51.5	)

Loss on sale of business	$	(22.3	)

The Company allocated consolidated goodwill to Solar Products based on the relative fair value of the component, which was determined using the purchase price (as adjusted) of Solar Products and the market capitalization of the Company as of December 1, 2021. This is consistent with the methodology applied to the Interior Products sale as described further below.

The results of operations from Solar Products have been included within income from continuing operations and are not material to the Company’s overall results.

Interior Products

On February 10, 2021, the Company completed the sale of Interior Products to FBM pursuant to the Purchase Agreement for approximately $850 million in cash (subject to a working capital and certain other adjustments as set forth in the Purchase Agreement). The final adjusted purchase price for Interior Products was $842.7 million. During the three months ended December 31, 2021 the company received $6.6 million of final purchase consideration from FBM.

The Company completed this divestiture of net assets previously acquired as part of the Allied Acquisition in 2018 (as defined in Note 6) to reduce net leverage, strengthen its balance sheet, enhance leadership focus, and provide the financial flexibility to pursue strategic growth initiatives in its core exteriors business.

The following table reconciles major line items constituting pretax income (loss) from discontinued operations to net income (loss) from discontinued operations as presented in the condensed consolidated statements of operations (in millions):


	Three Months Ended December 31,
	2021			2020
Net sales	$	—		$	248.8
Cost of products sold		—			(183.8	)
Selling, general and administrative		(0.1	)		(56.9	)
Depreciation and amortization		—			(12.9	)
Other income (loss)		—			0.1
Loss on sale		—			(355.4	)
Pretax income (loss) from discontinued operations		(0.1	)		(360.1	)
Provision for (benefit from) income taxes		—			(92.2	)
Net income (loss) from discontinued operations	$	(0.1	)	$	(267.9	)

The initial estimated loss on sale of $355.4 million for the three months ended December 31, 2020 was calculated by comparing the purchase price (as adjusted) to the carrying value of the net assets of Interior Products as of February 10, 2021, the closing date of the sale. As Interior Products represented a component of the Company’s single reporting unit, the carrying value of the net assets of Interior Products included an estimated allocation of $734.3 million of the Company’s consolidated goodwill balance. The Company allocated

consolidated goodwill based on the relative fair value of the component, which was determined using the purchase price (as adjusted) of Interior Products and the market capitalization of the Company as of February 10, 2021. The net result of this allocation attributed a higher amount of goodwill than that which was directly associated with the Interior Products portion of the Allied Acquisition, thereby having a significant influence on the loss on the Interior Products divestiture transaction. The loss on sale of $360.6 million for the year ended September 30, 2021 reflected the finalized transaction costs and net working capital adjustment.

The following table reconciles the carrying amounts of major classes of assets and liabilities of discontinued operations to total assets and liabilities of discontinued operations that are classified as held for sale in the condensed consolidated balance sheets (in millions). There were no assets or liabilities held for sale as of December 31, 2021 or September 30, 2021.


	December 31,
	2020
Carrying amounts of major classes of assets held for sale:
Accounts receivable, net	$	130.6
Inventories, net		82.4
Prepaid expenses and other current assets		30.7
Property and equipment, net		35.8
Goodwill		378.9
Intangibles, net		273.1
Operating lease assets		65.5
Total assets held for sale1	$	997.0

Carrying amounts of major classes of liabilities held for sale:
Accounts payable	$	52.6
Accrued expenses		56.3
Current operating lease liabilities		16.2
Non-current operating lease liabilities		48.9
Other long-term liabilities		1.1
Total liabilities held for sale1	$	175.1

___________________________

All assets and liabilities held for sale as of December 31, 2020 were classified as current because the sale of Interior Products was probable to be
completed within one year.