On October 1, 2018 (the “A&S Closing Date”), Altra and Fortive Corporation (“Fortive”) consummated the previously announced combination of Altra with four operating companies from Fortive’s Automation & Specialty platform (the “A&S Business”). The A&S Business, consisting of four key brands, Kollmorgen, Portescap, Thomson and Jacobs Vehicle Systems, designs, manufactures, markets and sells electromechanical and electronic motion control products, including standard and custom motors, drives and controls; linear motion systems, ball screws, linear bearings, clutches/brakes, linear actuators and mechanical components; and through Jacobs Vehicle Systems, supplemental braking systems for commercial vehicles.

The aggregate purchase price for the A&S Business of approximately $2,462.1 million, subject to certain post-closing adjustments, consisted of $949.2 million of cash transferred, net of $54.2 million of cash acquired, to Fortive and 35,000,000 shares of Altra common stock received by Fortive shareholders valued at approximately $1,458.7 million, which includes $3.1 million of employee stock awards issued to certain Fortive employees. The transaction costs related to the acquisition totaled $35.7 million and is reflected in selling, general and administrative expenses in the statement of operations. In addition, the Company assumed the Notes in the amount of $400.0 million upon the closing of the Fortive Transaction.

The consolidated financial statements reflect the A&S Business’s results of operations from October 1, 2018 through December 31, 2018.

The fair value of all the acquired identifiable assets and liabilities summarized below is provisional pending finalization of the Company’s acquisition accounting, including the finalization of the valuation of the intangible assets acquired, identification and measurement of the inventory and property, plant and equipment, the measurement of tax basis in certain jurisdictions and the resulting deferred taxes that might arise from book and tax basis differences, as well as identification and measurement of uncertain tax positions, if any. The Company believes that such preliminary allocations provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is waiting for additional information necessary to finalize fair value. The purchase price allocation as of the acquisition date is as follows:

Preliminary purchase price allocation:
Total cash consideration	$	1,003,354
Total equity consideration		1,458,726
Total purchase price	$	2,462,080

Recognized identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	54,170
Receivables		129,701
Inventory		89,073
Prepaids and other current assets		6,886
Property, plant and equipment		178,334
Intangibles		1,454,000
Other non-current assets		7,893
Accounts payable		(98,886	)
Accrued payroll		(15,232	)
Accrued expenses and other current liabilities		(33,740	)
Pension liability and other post employment benefits		(11,999	)
Deferred tax liability		(355,705	)
Other long term liability		(2,604	)
Senior unsecured notes assumed		(400,000	)
Net assets acquired		1,001,891
Excess purchase price over fair value of net assets acquired	$	1,460,189

The excess of the purchase price over the fair value of the net assets acquired was recorded as goodwill. For the year ended December 31, 2018, goodwill is not deductible for income tax purposes in the United States. The goodwill in this acquisition is attributable to the Company’s expectation to develop synergies, such as facility consolidations, global procurement, the ability to cross-sell product, and the ability to penetrate certain geographic areas.

Intangible assets acquired consist of:
Customer relationships	$	1,025,000
Trade names and trademarks		209,000
Technology		204,000
In-process research and development ("IPR&D")		16,000
Total intangible assets	$	1,454,000

Customer relationships and technology are subject to amortization, and will be recognized on a straight-line basis over the estimated useful lives of 20 years and 7-10 years, respectively, which represents the anticipated period over which the Company estimates it will benefit from the acquired assets. The tradenames and trademarks are considered to have an indefinite life and will not be amortized.

The major acquired technology IPR&D relates to the next generation of valvetrain technologies, which focus on improving engine brake performance, improving fuel efficiency and meeting future worldwide emissions regulations. The IPR&D projects are not currently amortized and will be reviewed for impairment at least annually and amortization will commence when the assets are placed into service. There was no evidence of impairment to IPR&D as of December 31, 2018.

The Company recorded net sales from the A&S Business of $241.7 million from October 1, 2018 through December 31, 2018. The Company recorded net income from the A&S Business of $20.2 million from October 1, 2018 through December 31, 2018, which includes $15.6 million of amortization of intangible assets.

The following table sets forth the unaudited pro forma results of operations of the Company for the year ended December 31, 2017 as if the Company had acquired the A&S Business on January 1, 2017. The pro forma information contains the actual operating results of the Company and the A&S Business, adjusted to include the pro forma impact of (i) additional depreciation expense as a result of estimated depreciation based on the fair value of fixed assets; (ii) additional expense as a result of the estimated amortization of identifiable intangible assets; (iii) additional interest expense for borrowings associated with the A&S Acquisition and (iv) inventory fair value adjustment. These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred at the beginning of the period or that may be obtained in the future.

	Proforma (unaudited)
	Years Ended December		Years Ended December
	2018		2017
Total revenues	$	1,919,548	$	1,784,086
Net income		108,016		79,733
Basic earnings per share		1.69		1.25
Diluted earnings per share		1.68		1.24