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Sales of Certain International Segment Assets
12 Months Ended
Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]  
Sales of Certain International Segment Assets
Sales of Certain International Segment Assets
Sale of Certain Canadian Assets
During the fourth quarter of 2015, the Company committed to a plan to sell certain assets and liabilities associated with the Company’s Canadian operations in the International Segment. This event qualified for held for sale accounting and the Company determined that the fair value of the net assets being sold significantly exceeded the carrying value as of December 31, 2015. The transaction was finalized in the first quarter of 2016.
Effective January 7, 2016, the Canadian subsidiary of the Company entered into an asset purchase agreement (“Canadian Asset Purchase Agreement”) pursuant to which it would sell substantially all of the assets of its Canadian radiopharmacy businesses and Gludef manufacturing and distribution business to one of its existing Canadian radiopharmacy customers.
The purchase price for the asset sale was $9.0 million in cash and also included a working capital adjustment of $0.5 million, which was settled in the third quarter of 2016. The Canadian Asset Purchase Agreement contained customary representations, warranties and covenants by each of the parties. Subject to certain limitations, the buyer will be indemnified for damages resulting from breaches or inaccuracies of the Company’s representations, warranties and covenants in the Canadian Asset Purchase Agreement.
As part of the transaction, the Company and the buyer also entered into a customary transition services agreement and a long-term supply contract under which the Company will supply the buyer with certain of the Company’s products on commercial terms and under which the buyer has agreed to certain product minimum purchase commitments.
The Company does not believe the sale of certain net assets in the international segment constituted a strategic shift that would have a major effect on its operations or financial results. As a result, this transaction is not classified as discontinued operations in the Company’s consolidated financial statements.
This sale of assets resulted in a pre-tax book gain of $5.9 million, which is recorded within gain on sales of assets in the accompanying consolidated statements of operations for the year ended December 31, 2016.
Sale of Australian Radiopharmacy Servicing Subsidiary
Effective August 11, 2016, the Company entered into a share purchase agreement (“Australian Share Purchase Agreement”) with one of its existing radiopharmacy customers under which it sold all of the stock of its Australian radiopharmacy servicing subsidiary.
The aggregate share sale price was AUD $2.0 million (approximately $1.5 million) in cash and also included a working capital adjustment of approximately AUD $2.0 million (approximately $1.5 million) for total proceeds of AUD $4.0 million (approximately $3.0 million) from the sale. As a result of this sale, the Company disposed of net assets of $2.2 million, primarily comprised of working capital accounts of $2.0 million.
This share sale resulted in an adjusted pre-tax book gain of $0.5 million, which is recorded within gain on sales of assets in the accompanying consolidated statements of operations for the year ended December 31, 2016. As a result of the sale of the Australian subsidiary, the Company reclassified $0.4 million from other comprehensive income to gain on sale of assets in the accompanying consolidated statements of operations for the year ended December 31, 2016.
The Australian Share Purchase Agreement contains customary representations, warranties and covenants by each of the parties. Subject to certain limitations, the buyer will be indemnified for damages resulting from breaches or inaccuracies of the Company’s representations, warranties and covenants in the Australian Share Purchase Agreement.
As part of the transaction, the Company and the buyer also entered into a long-term supply and distribution contract under which the Company will supply the buyer and its subsidiaries with the Company’s products on commercial terms and under which the buyer has agreed to certain product minimum purchase commitments.
The Company does not believe this sale of certain net assets in the international segment constituted a strategic shift that would have a major effect on its operations or financial results. As a result, this transaction is not classified as discontinued operations in the Company’s accompanying consolidated financial statements.