Acquisitions

2017 Acquisitions

Arbo

On January 31, 2017, the Company acquired 100% of the equity of Arbo Holdings Limited (“Arbo”) for an estimated consideration of GBP 8.1 million or $10.2 million, net of GBP 1.0 million or $1.2 million cash acquired and including the estimated fair value of contingent consideration of GBP 2.0 million or $2.5 million. Arbo is provider of sealants, coatings, and membrane systems used for waterproofing and sealing buildings and other structures. The results of operations of the acquired business are reported within the Construction Materials segment.

Consideration has been preliminarily allocated to goodwill of $5.5 million, $2.2 million to definite-lived intangible assets, $2.1 million to inventory, $1.6 million to indefinite-lived intangibles, $1.5 million to accounts receivable, $1.5 million to accounts payable, and $1.4 million to deferred income and other taxes payable. Definite-lived intangible assets consist of customer relationships with a useful life of 15 years. Of the $5.5 million of goodwill, $1.3 million is deductible for tax purposes.

San Jamar

On January 9, 2017, the Company acquired 100% of the equity of SJ Holdings, Inc. (“San Jamar”) for consideration of $213.7 million, net of $3.5 million cash acquired and inclusive of a working capital settlement. San Jamar is a provider of universal dispensing systems and food safety products for foodservice and hygiene applications. San Jamar complements the operating performance at FoodService Products by adding new products, opportunities to expand our presence in complementary sales channels, and a history of profitable growth. The results of operations of the acquired business are reported within the FoodService Products segment.

The following table summarizes the consideration transferred to acquire San Jamar and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed.



	Preliminary Allocation
(in millions)	As of 1/9/2017
Total consideration transferred	$	217.2
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	3.5
Receivables	9.1
Inventories	13.1
Prepaid expenses and other current assets	2.3
Property, plant, and equipment	4.2
Definite-lived intangible assets	135.1
Indefinite-lived intangible assets	23.6
Other long-term assets	3.2
Accounts payable	(7.0		)
Income tax payable	(0.5		)
Accrued expenses	(4.3		)
Other long-term liabilities	(4.8		)
Deferred income taxes	(47.2		)
Total identifiable net assets	130.3
Goodwill	$	86.9

The valuation of property, plant, and equipment, intangible assets, and income tax obligations is preliminary. We expect to complete the valuation in the second half of 2017. The goodwill recognized in the acquisition of San Jamar is attributable to its experienced workforce, expected operational improvements through implementation of the Carlisle Operating System (“COS”), opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities, and the significant strategic value of the business to Carlisle. Of the $86.9 million of goodwill, $5.0 million is deductible for tax purposes. All of the goodwill was assigned to the CFS reporting unit, which aligns with the reportable segment. The $135.1 million value allocated to definite-lived intangible assets consists of $98.0 million of customer relationships with a useful life of 13 years, various acquired technologies of $36.4 million with useful lives ranging from seven to 10 years, and a non-compete agreement of $0.7 million with a useful life of two years. Indefinite-lived intangible assets consist of acquired trade names.

As a result of the acquisition, the Company recognized approximately $4.1 million of pre-acquisition tax liabilities, with a corresponding indemnification asset of $3.2 million, as the seller has indemnified Carlisle for certain of these liabilities. The indemnification asset will be subsequently measured and recognized on the same basis as the corresponding liability. The related seller indemnification asset will expire in stages through the third quarter of 2021 unless claims are made against the seller prior to that date.

2016 Acquisitions

Star Aviation

On October 3, 2016, the Company acquired 100% of the equity of Star Aviation, Inc. (“Star Aviation”), for consideration of $82.4 million, net of $0.3 million cash acquired and inclusive of a working capital settlement, which was finalized in the fourth quarter of 2016. Star Aviation is a provider of design and engineering services, testing and certification work, and manufactured products for in-flight connectivity applications on commercial, business, and military aircraft. The results of operations of the acquired business are reported within the Interconnect Technologies segment.

The following table summarizes the consideration transferred to acquire Star Aviation and the revised preliminary allocation of the purchase price among the assets acquired and liabilities assumed.



	Preliminary Allocation			Measurement Period Adjustments		Revised Preliminary Allocation
(in millions)	As of 10/3/2016			Measurement Period Adjustments		As of 3/31/2017
Total consideration transferred	$	82.7		—		82.7
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	0.3		—		0.3
Receivables	5.9			(0.1	)	5.8
Inventories	3.1			(0.2	)	2.9
Prepaid expenses and other current assets	0.1			—		0.1
Property, plant, and equipment	3.3			—		3.3
Definite-lived intangible assets	29.0			—		29.0
Accounts payable	(1.3		)	0.2		(1.1	)
Accrued expenses	(0.8		)	0.1		(0.7	)
Total identifiable net assets	39.6			—		39.6
Goodwill	$	43.1		—		43.1

The valuation of property, plant, and equipment and intangible assets is preliminary. We expect to complete the valuation in the first half of 2017. The goodwill recognized in the acquisition of Star Aviation is attributable to its experienced workforce, expected operational improvements through implementation of COS, opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities, and the significant strategic value of the business to Carlisle. Goodwill of $43.1 million is deductible for tax purposes in the U.S. All of the goodwill was assigned to the CIT reporting unit, which aligns with the reportable segment. The $29.0 million value allocated to definite-lived intangible assets consists of $23.9 million of customer relationships with useful lives ranging from five to 10 years, various acquired technologies of $4.7 million with a useful life of six years, and a non-compete agreement of $0.4 million with a useful life of five years.

Micro-Coax

On June 10, 2016, the Company acquired 100% of the equity of Micro-Coax, Inc., and Kroll Technologies, LLC, (collectively “Micro-Coax”) for total consideration of $95.1 million, net of $1.5 million cash acquired, inclusive of a working capital settlement. The Company finalized the working capital settlement in the fourth quarter of 2016. The acquired business is a provider of high-performance, high frequency coaxial wire and cable, and cable assemblies to the defense, satellite, test and measurement, and other industrial markets. The results of operations of the acquired business are reported within the Interconnect Technologies segment.

The following table summarizes the consideration transferred to acquire Micro-Coax and the final allocation of the purchase price among the assets acquired and liabilities assumed.



	Preliminary Allocation			Measurement Period Adjustments			Final Allocation
(in millions)	As of 6/10/2016			Measurement Period Adjustments			As of 3/31/2017
Total consideration transferred	$	97.3		$	(0.7	)	$	96.6
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	1.5		$	—		$	1.5
Receivables	6.3			—			6.3
Inventories	8.6			—			8.6
Prepaid expenses and other current assets	0.4			(0.1		)	0.3
Property, plant, and equipment	30.0			(14.0		)	16.0
Definite-lived intangible assets	31.5			(5.0		)	26.5
Indefinite-lived intangible assets	2.0			(2.0		)	—
Other long-term assets	1.0			—			1.0
Accounts payable	(1.7		)	—			(1.7		)
Accrued expenses	(2.4		)	(0.1		)	(2.5		)
Total identifiable net assets	77.2			(21.2		)	56.0
Goodwill	$	20.1		$	20.5		$	40.6

The valuation of property, plant, and equipment and intangible assets is final and there have been no changes to the allocation during the three months ended March 31, 2017. The goodwill recognized in the acquisition of Micro-Coax is attributable to its experienced workforce, expected operational improvements through implementation of COS, opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities, and the significant strategic value of the business to Carlisle. Goodwill of $40.6 million is deductible for tax purposes in the U.S. All of the goodwill was assigned to the CIT reporting unit, which aligns with the reportable segment. The $26.5 million value allocated to definite-lived intangible assets consists of $14.5 million of customer relationships with a useful life of 12 years, various acquired technologies of $10.6 million with a useful life of approximately seven years, an amortizable trade name of $0.9 million with a useful life of 10 years, and a non-compete agreement of $0.5 million with a useful life of three years.

MS Oberflächentechnik AG

On February 19, 2016, the Company acquired 100% of the equity of MS Oberflächentechnik AG (“MS Powder”), a Swiss-based developer and manufacturer of powder coating systems and related components, for total consideration of CHF 12.3 million, or $12.4 million, including the estimated fair value of contingent consideration of CHF 4.3 million, or $4.3 million. The results of operations of MS Powder are reported within the Fluid Technologies segment.

Consideration has been allocated to definite-lived intangible asset of $9.7 million, $4.1 million to indefinite-lived intangible assets, and $2.2 million to deferred tax liabilities, with $2.9 million allocated to goodwill. Definite-lived intangible assets consist of $8.3 million of technology with a useful life of seven years and customer relationships of $1.4 million with a useful life of ten years. None of the goodwill is deductible for tax purposes.

LHi Technology

In conjunction with the October 2014 acquisition of LHi Technology (“LHi”), the Company recorded an indemnification asset of $8.7 million in other long-term assets relating to the indemnification of Carlisle for certain pre-acquisition liabilities, principally related to direct and indirect tax uncertainties. During the third quarter of 2016, the Company concluded that $2.6 million of the indirect tax uncertainties were no longer probable, therefore resulting in the reversal of the related indemnification asset and the corresponding liability.

The remaining indemnification asset of $6.1 million at March 31, 2017 is included in other current assets. The related seller indemnification will expire during the third quarter of 2017 unless claims are made against the seller prior to that date.