Divestitures

12 Months Ended

Jan. 03, 2025

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

NOTE 4: DIVESTITURES

Mobility Divestiture

On September 14, 2024, we entered into a definitive agreement with Platform Science to sell our Mobility business. Subsequent to the end of the year 2024, the transaction closed on February 8, 2025 resulting in our ownership, or rights to acquire ownership of 32.5% of Platform Science’s expanded business, with an approximate fair value of $248.7 million. The approximate fair value was determined based on unobservable inputs, including discounted cash flow projections, market comparables, and an option pricing model. We received (i) shares of preferred stock of Platform Science, with certain liquidation preferences, that represent 28.5% of Platform Science’s expanded business and (ii) warrants allowing us the rights to acquire 4% of Platform Science’s expanded business. The combined businesses aim to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.

The assets and liabilities of Mobility were classified as held for sale beginning in the third quarter of 2024. A valuation allowance was established to reduce the carrying value of the disposal group assets to the approximate fair value of the consideration we would receive. As a result, we recorded a pre-tax loss of approximately $32.9 million included within Divestitures gain, net in our Consolidated Statements of Income in 2024.

Upon the closing of the transaction in the first quarter of 2025, we derecognized the assets and liabilities that were transferred and recorded our equity investment at its cost under the measurement alternative election. Mobility was reported as a part of our T&L segment.

The following table presents the major classes of assets and liabilities classified as held for sale at the end of 2024, including the valuation allowance.

	At the End of Year
	2024
(In millions)
Cash and cash equivalents	$	9.0
Accounts receivable, net	87.6
Inventories, net	22.8
Other current assets	8.7
Goodwill	141.7
Other non-current assets	65.1
Valuation allowance	(22.9)
Total Assets held for sale	$	312.0
Accounts payable	$	8.0
Deferred revenue, current	22.8
Other current liabilities	20.3
Deferred revenue, non-current	5.2
Other non-current liabilities	6.3
Total Liabilities held for sale	$	62.6

Ag Divestiture

On September 28, 2023, we executed a Sale and Contribution Agreement with AGCO that provided for the formation of a joint venture, called PTx Trimble, that operates in the mixed fleet precision agriculture market. The agreement was amended and restated on March 31, 2024, and the transaction closed on April 1, 2024. Under the terms of the agreement, we contributed our Ag business, excluding certain GNSS and guidance technologies, to PTx Trimble, an LLC. Following the closing of the transaction, we own 15% and AGCO owns 85% of PTx Trimble. The agreement provides AGCO with a call option and Trimble with a put option with respect to our retained interest in PTx Trimble. Ag was reported as a part of our Field Systems segment.

Upon closing of the transaction in the second quarter of 2024, we received $1.9 billion of cash proceeds from AGCO, subject to working capital adjustments. As a result, we deconsolidated $457.3 million of net assets, including $357.4 million of goodwill, and recognized a pre-tax gain of $1.7 billion. The gain included $275.6 million for our retained 15% ownership interest in PTx Trimble, which is reported as an equity method investment and represents a non-cash investing activity. The fair value of our equity method investment was determined by using a combination of the equity value, primarily based on the transaction price, and an option pricing model for a put and call option. At the end of 2024, the fair value of our equity method investment was $222.3 million, which included a $52.7 million charge for our proportionate share of PTx Trimble’s goodwill impairment in the fourth quarter.

In addition to forming PTx Trimble, the parties concurrently entered into agreements that included the following:

•a seven-year renewable supply agreement (the “Supply Agreement”) through which we will provide key GNSS and guidance technologies to PTx Trimble for use in professional agriculture machines sold by AGCO, on an exclusive basis with limited exceptions;

•a technology transfer and license agreement to govern the licensing of certain non-divested intellectual property and technology for use by PTx Trimble in the agriculture field and, upon expiration of the Supply Agreement, to govern fixed and variable royalty payments made to us by PTx Trimble;

•a trademark license agreement to govern the licensing of certain Trimble trademarks for use by PTx Trimble in the agriculture field;

•a master sale and distribution agreement through which PTx Trimble will serve as our channel partner for positioning services in the agriculture market; and

•a transition services agreement to provide contract manufacturing services for the divested products for two years following the closing of the transaction.

Other Divestitures

In addition to the Mobility divestiture and Ag divestiture, we divested two businesses in 2024 with total proceeds of $13.3 million.

In 2023, we divested five businesses with total proceeds of $18.7 million.

In 2022, we divested six businesses with total proceeds of $226.3 million. The largest divestiture was the sale of Time and Frequency, LOADRITE, Spectra Precision Tools, and SECO accessories businesses to Precisional LLC, an affiliate of The Jordan Company, for $205.1 million in cash, which included a working capital adjustment.