Acquisitions and Discontinued Operations

12 Months Ended

Dec. 31, 2019

Business Combination And Disposal Groups, Including Discontinued Operations, Disclosure [Abstract]

Acquisitions and Discontinued Operations

Acquisitions and Discontinued Operations

Acquisitions

In February 2019, as part of Filtration Solutions, we completed the acquisitions of Aquion, Inc. (“Aquion”) and Pelican Water Systems (“Pelican”) for $163.4 million and $121.1 million, respectively, in cash, net of cash acquired.

For Aquion, the excess of purchase price over tangible net assets and identified intangible assets acquired has been preliminarily allocated to goodwill in the amount of $87.5 million, $4.6 million of which is expected to be deductible for income tax purposes. Identifiable intangible assets acquired as part of the Aquion acquisition include $15.7 million of indefinite-lived trade name intangible assets and $78.8 million of definite-lived customer relationships with an estimated useful life of 15 years.

For Pelican, the excess purchase price over tangible net assets acquired has been preliminarily allocated to goodwill in the amount of $118.0 million, $7.6 million of which is expected to be deductible for income tax purposes.

The preliminary purchase price allocation for these acquisitions is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. These changes will primarily relate to impacts associated with other accruals.

During 2017, our continuing operations completed acquisitions with purchase prices totaling $45.9 million in cash, net of cash acquired. Identifiable intangible assets acquired included $19.1 million of definite-lived customer relationships with an estimated useful life of 11 years.

The pro forma impact of these acquisitions was not material.

Discontinued Operations

Electrical separation

On April 30, 2018, we completed the Separation and Distribution. The results of the Electrical business have been presented as discontinued operations for all periods presented. The Electrical business had been previously disclosed as a stand-alone reporting segment. Separation costs related to the Separation and Distribution were $84.2 million and $39.3 million for the twelve months ended December 31, 2018 and 2017, respectively. These costs are reported in discontinued operations as they represent a cost directly related to the Separation and Distribution and were included within (Loss) income from discontinued operations, net of tax presented below.

Sale of Valves & Controls

On April 28, 2017, we completed the sale of the Valves & Controls business to Emerson Electric Co. for $3.15 billion in cash. The sale resulted in a gain of $181.1 million, net of tax. The results of the Valves & Controls business have been presented as discontinued operations. The Valves & Controls business was previously disclosed as a stand-alone reporting segment. Transaction costs of $56.4 million related to the sale of Valves & Controls were incurred during the year ended December 31, 2017 and were recorded within Gain from sale of discontinued operations before income taxes presented below.

Operating results of discontinued operations are summarized below:

	Years ended December 31
In millions	2019			2018		2017
Net sales	$	—		$	693.9	$	2,548.2
Cost of goods sold	—			424.0		1,596.2
Gross profit	—			269.9		952.0
Selling, general and administrative	7.4			237.8		589.2
Research and development	—			14.6		48.3
Operating (loss) income	$	(7.4	)	$	17.5	$	314.5
(Loss) income from discontinued operations before income taxes	$	(7.6	)	$	31.8	$	317.1
Income tax (benefit) provision	(1.6		)	6.1		(54.2		)
(Loss) income from discontinued operations, net of tax	$	(6.0	)	$	25.7	$	371.3
Gain from sale of discontinued operations before income taxes	$	—		$	—	$	183.5
Provision for income taxes	—			—		2.4
Gain from sale of discontinued operations, net of tax	$	—		$	—	$	181.1