ACQUISITIONS Acquisitions (Notes)

9 Months Ended

Sep. 28, 2024

Acquisitions [Abstract]

Business Combination Disclosure [Text Block]

ACQUISITIONS AND DIVESTITURES

Acquisitions

On September 12, 2024, we completed the acquisition of 100% of the privately held stock of kSARIA for a preliminary purchase price of $461.9, net of cash acquired and including deferred consideration of $4.5 expected to be paid in 2025. The final price is subject to a customary working capital adjustment. kSARIA is a leading manufacturer of mission-critical cable assembly and networking application solutions primarily for the aerospace and defense market. kSARIA is headquartered in New Hampshire, with approximately 1,000 employees across five manufacturing sites in the U.S. and one in Mexico. kSARIA and its acquired subsidiaries generated sales of approximately $175 in 2023. Subsequent to the acquisition, kSARIA’s financial results are reported within our CCT segment.

On January 19, 2024, the Company completed the acquisition of 100% of the privately held stock of Svanehøj for a purchase price of $407.6, net of cash acquired of $28.0. Svanehøj is a Denmark-based supplier of pumps and related aftermarket services with leading positions in cryogenic applications for the marine sector. Svanehøj employs approximately 400 employees and has operations in Denmark, Singapore and France. Svanehøj had sales of approximately $148 in 2023. Subsequent to the acquisition, Svanehøj’s financial results are reported within our IP segment.

The primary areas of the purchase price allocations that are not yet finalized for kSARIA and Svanehøj relate to the valuation of certain tangible and intangible assets, liabilities, income tax, and residual goodwill, which represents the excess of the purchase price over the fair value of the net tangible and other intangible assets acquired. The Company expects to obtain the information necessary to finalize the fair value of the net assets and liabilities during the measurement periods, not to exceed one year from respective the acquisition dates. Changes to the preliminary estimates of the fair value during the measurement period will be recorded as adjustments to those assets and liabilities with a corresponding adjustment to goodwill in the period they occur.

On May 2, 2023, the Company completed the acquisition of 100% of the privately held stock of Micro-Mode for a purchase price of $79.0, net of cash acquired. Micro-Mode is a specialty designer and manufacturer of high-bandwidth radio frequency (RF) connectors for harsh environment defense and space applications. Micro-Mode has a single manufacturing site near San Diego, California. Subsequent to the acquisition, Micro-Mode’s financial results are reported within our CCT segment. As of September 28, 2024, the allocation of the purchase price to the assets acquired and liabilities assumed was finalized related to our acquisition of Micro-Mode.

The assets acquired and liabilities assumed for kSARIA, Svanehøj and Micro-Mode acquisitions were recorded at fair value and are shown in the table below.

Allocation of Purchase Price	kSARIA (Preliminary)		Svanehøj (Preliminary)		Micro-Mode (Final)
Receivables	$	28.1	$	22.4	$	2.7
Inventory	50.6		39.5		5.3
Plant, property and equipment	5.8		19.1		6.1
Goodwill(a)	276.0		215.6		44.9
Other intangible assets	166.0		212.6		28.7
Other assets	8.9		9.0		0.2
Accounts payable and accrued liabilities	(27.9)		(28.0)		(2.6)
Other liabilities	(42.6)		(52.8)		(6.3)
Contract liabilities	(3.0)		(29.8)		—
Net assets acquired	$	461.9	$	407.6	$	79.0

(a)    Goodwill acquired with kSARIA is primarily attributable to the complementary nature of its product portfolio to ITT’s existing connectors portfolio. Goodwill related to the acquisition of Svanehøj is primarily attributable to future economic benefits expected from our entrance into the marine sector, our expanded presence in the energy market, and geographic expansion. Goodwill arising from acquisitions is not expected to be deductible for income tax purposes.

Pro forma results of operations have not been presented because the acquisitions were not deemed significant as of the acquisition date.

Divestiture of Wolverine Business

On July 22, 2024, the Company completed the sale of its Wolverine business, part of the MT segment prior to the divestiture, to an unrelated third party for a preliminary price of $171. The final sale price is subject to a customary working capital adjustment. The transaction resulted in a pre-tax gain of $47.8, including an estimated working capital recovery of $17.0. In connection with the divestiture, cumulative translation losses of $3.6 were reclassified out of Accumulated Other Comprehensive Loss and included in the gain on sale. Subsequent to the sale, Wolverine will act as a third-party supplier to the Company’s MT segment.