Acquisitions and Divestitures

The results of operations for acquired businesses are included in the Consolidated Financial Statements from the dates of acquisition. Acquisition-related expenses were $5.8 million during 2014, $3.9 million during 2013 and $0.4 million during 2012.

On January 30, 2015, the Company acquired the Power Transmission Solutions business of Emerson Electric Co. ("PTS") (see also Note 17 of Notes to the Consolidated Financial Statements).

2014 Acquisitions

On June 30, 2014, the Company acquired all of the stock of Benshaw. Inc., ("Benshaw") for $51.0 million. Benshaw is a manufacturer of custom low and medium voltage variable frequency drives and soft starters. It is reported in the Commercial and Industrial Systems segment. The Company acquired Benshaw because management determined it was a strategic fit for the Commercial and Industrial Systems segment.

The acquisition of Benshaw was accounted for as a purchase in accordance with FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships and technology, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill is attributable to expected synergies and other growth opportunities. The Company expects the amount of goodwill will be deductible for United States income tax purposes.

The purchase price allocation for Benshaw was as follows:



	As of June 30, 2014
Current assets	$	0.5
Trade receivables	10.4
Inventories	22.4
Property, plant and equipment	4.5
Intangible assets, subject to amortization	14.6
Goodwill	9.9
Total assets acquired	$	62.3
Accounts payable	3.7
Current liabilities assumed	2.2
Long-term liabilities assumed	5.4
Net assets acquired	$	51.0

On February 7, 2014, the Company acquired the stock of Hy-Bon Engineering Company, Inc. ("Hy-Bon") for $78.0 million. Hy-Bon is a leader in vapor recovery solutions for oil and gas applications and is reported in the Commercial and Industrial Systems segment. The Company acquired Hy-Bon because management determined it was a strategic fit for the Commercial and Industrial Systems segment.

The acquisition of Hy-Bon was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill is attributable to expected synergies and other growth opportunities. The Company does not expect the amount of goodwill will be deductible for income tax purposes under current United States tax law.

The purchase price allocation for Hy-Bon was as follows:



	February 7, 2014
Current assets	$	1.7
Trade receivables	11.5
Inventories	14.3
Property, plant and equipment	8.1
Intangible assets, subject to amortization	13.4
Goodwill	40.6
Other assets	0.1
Total assets acquired	89.7
Accounts payable	5.5
Current liabilities assumed	5.1
Long-term liabilities assumed	1.1
Net assets acquired	$	78.0

2013 Acquisitions

On November 19, 2013, the Company acquired the stock of Cemp s.r.l. ("Cemp"), an Italy based electric motor company for $34.6 million, net of cash. Cemp is a leading designer, manufacturer and marketer of flameproof electric motors, and is reported in the Commercial and Industrial Systems segment. The Company acquired Cemp because management determined it was a strategic fit for the Commercial and Industrial Systems segment.

The acquisition of Cemp was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill is attributable to expected synergies and other growth opportunities. The Company does not expect the amount of goodwill be deductible for income tax purposes under current Italiantax law.

The purchase price allocation for Cemp was as follows:



	November 19, 2013
Current assets	$	3.1
Trade receivables	6.6
Inventories	7.8
Property, plant and equipment	3.7
Intangible assets, subject to amortization	12.6
Goodwill	14.8
Total assets acquired	48.6
Accounts payable	5.5
Current liabilities assumed	3.0
Long-term liabilities assumed	5.5
Net assets acquired	$	34.6

On February 8, 2013, the Company acquired the RAM motor business previously owned by Schneider Electric for $6.0 million. This business manufactures hermetic motors from 250 hp to 2,500 hp for commercial HVAC applications and is reported in the Commercial and Industrial Systems segment. The Company acquired RAM because management determined it was a strategic fit for the Commercial and Industrial Systems segment.

The acquisition of RAM was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, were based on valuations using the income approach.

The purchase price allocation for RAM was as follows:



	February 8, 2013
Current assets	$	1.2
Trade receivables	1.9
Inventories	7.7
Property, plant and equipment	2.1
Other assets	0.1
Total assets acquired	13.0
Accounts payable	1.1
Current liabilities assumed	5.4
Long-term liabilities assumed	0.5
Net assets acquired	$	6.0

On September 3, 2013, the Company purchased additional shares owned by the noncontrolling interest in its joint venture in a South African distribution business increasing its ownership from 60.0% to 80.0% for $1.7 million. The Company consolidates the results of the South African distribution business into the Company's consolidated financial statements in the Commercial and Industrial Systems segment and presents the portion of its investment not owned by the Company as noncontrolling interest. The noncontrolling interest in the South African distribution business was reduced to 20.0% as of September 3, 2013.

2012 Acquisitions

On November 30, 2012, the Company acquired Remco Products Limited for $3.7 million. Remco is a UK supplier of a broad range of AC fractional horsepower electric motors and fans for replacement use in heating, ventilation, refrigeration and air conditioning industries located in West Sussex, England. The acquisition added greater access to the European replacement motor business and is expected to generate growth to the Company's overall European business. Remco is reported as a part of the Climate Solutions segment. The Company acquired Remco because management determined it was a strategic fit for the Climate Solutions segment.

The acquisition of Remco was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill is attributable to expected synergies and other growth opportunities. The Company does not expect the amount of goodwill be deductible for income tax purposes under current tax law.



	November 30, 2012
Trade receivables	$	1.1
Inventories	1.4
Property, plant and equipment	0.2
Intangible assets, subject to amortization	0.5
Goodwill	0.8
Total assets acquired	4.0
Accounts payable	0.2
Long-term liabilities assumed	0.1
Net assets acquired	$	3.7

On October 2, 2012, the Company acquired Marlin Coast Motor Rewinding ("MCMR") for $3.4 million. MCMR, based in Cairns, North Queensland, Australia, is a leader in the supply, service and overhaul of electric machines. MCMR is reported as a part of the Company’s Commercial and Industrial Systems segment.The Company acquired MCMR because management determined it was a strategic fit for the Commercial and Industrial Systems segment.The Company acquired MCMR because management determined it was a strategic fit for the Commercial and Industrial Systems segment.

The acquisition of MCMR was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities were recorded as goodwill. The goodwill is attributable to expected synergies and other growth opportunities. The Company does not expect the amount of goodwill to be deductible for income tax purposes under current tax law.



	October 2, 2012
Property, plant and equipment	1.4
Intangible assets, subject to amortization	0.6
Goodwill	1.4
Total assets acquired	3.4
Net assets acquired	$	3.4

On April 30, 2012, the Company acquired Tecnojar, a Mexico based commercial and industrial solutions products company, for $1.6 million. Tecnojar is reported as a part of the Company's Commercial and Industrial Systems segment.The Company acquired Tecnojar because management determined it was a strategic fit for the Commercial and Industrial Systems segment.The Company acquired Tecnojar because management determined it was a strategic fit for the Commercial and Industrial Systems segment.

The acquisition of Tecnojar was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The excess of the purchase price over the estimated fair values of tangible assets and assumed liabilities was recorded as goodwill. The goodwill is attributable to expected synergies and other growth opportunities. The Company does not expect the amount of goodwill be deductible for income tax purposes under current tax law.



	April 30, 2012
Current assets	$	0.3
Trade receivables	0.2
Inventories	0.1
Property, plant and equipment	0.8
Goodwill	0.7
Total assets acquired	2.1
Current liabilities assumed	0.5
Net assets acquired	$	1.6

On February 3, 2012, the Company acquired Milwaukee Gear Company (“MGC”), a Wisconsin-based leading manufacturer of highly engineered gearing components for oil and gas applications as well as a wide variety of other commercial and industrial applications. The purchase price of MGC was $80.3 million paid in cash, net of cash acquired. MGC is reported as a part of the Company's Power Transmission Solutions segment. The Company acquired MGC because management determined it was a strategic fit for the Commercial and Industrial Systems segment.

The acquisition of MGC was accounted for as a purchase in accordance with the FASB ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The fair values of identifiable intangible assets, which were primarily customer relationships, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets and assumed liabilities was recorded as goodwill. The goodwill is attributable to expected synergies and other growth opportunities. The Company does not expect the amount of goodwill be deductible for income tax purposes under current tax law.



	February 3, 2012
Current assets	$	3.1
Trade receivables	5.8
Inventories	17.1
Property, plant and equipment	26.0
Intangible assets, subject to amortization	18.2
Goodwill	21.4
Other assets	0.1
Total assets acquired	91.7
Accounts payable	2.7
Current liabilities assumed	1.5
Long-term liabilities assumed	7.2
Net assets acquired	$	80.3

Unaudited Pro Forma Consolidated Financial Information

The following unaudited pro forma information presents the financial results for 2014, 2013 and 2012. Presented are the financial results for 2014, 2013 and 2012 as if the acquisitions of Benshaw, Hy-Bon, Cemp, RAM, Remco, MCMR, Tecnojar and MGC had occurred on January 1, 2012.

Such pro forma amounts do not include any estimated cost synergies or other effects of the integration of the acquisitions. Accordingly, the pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on the dates indicated. Pro forma amounts are also not necessarily indicative of any future consolidated operating results of the Company (see Note 5 of the Notes to the Consolidated Financial Statements for amortization expense related to intangible assets acquired) (in millions, except per share amounts).



	Fiscal 2014		Fiscal 2013		Fiscal 2012
Pro forma net sales	$	3,291.2	$	3,240.4	$	3,328.8
Pro forma net income	28.8		123.8		202.4

Basic earnings per share as reported	$	0.69	$	2.66	$	4.68
Pro forma basic earnings per share	0.64		2.75		4.84

Diluted earnings per share as reported	$	0.69	$	2.64	4.64
Pro forma diluted earnings per share	0.64		2.73		4.81

Divestitures

The Company sold its shares of a joint venture ("Jinling") located in Shanghai, China on September 11, 2014 which was previously accounted for as a consolidated joint venture and was reported in the Commercial and Industrial Systems segment. The disposal of Jinling was determined to not qualify for presentation as discontinued operations in the Company's Consolidated Financial Statements, in accordance with ASU 2014-08. A loss of approximately $1.9 million was recorded in Operating Expenses in the Consolidated Statements of Income in 2014.