RECENT TRANSACTIONS

BERU Diesel Start Systems Pvt. Ltd.

In January 2015, the Company completed the acquisition of BERU Diesel Start Systems Pvt. Ltd. by acquiring the shares of its former joint venture partner, Jayant Dave. The former joint venture was formed in 1996 to develop and manufacture glow plugs in India. After this transaction, the Company owns 100% of the entity.

Gustav Wahler GmbH u. Co KG

On February 28, 2014, the Company acquired 100% of the equity interests in Wahler. Wahler was a producer of exhaust gas recirculation ("EGR") valves, EGR tubes and thermostats, and had operations in Germany, Brazil, the U.S., China and Slovakia. The cash paid, net of cash acquired was $110.5 million (80.1 million Euro).

The Wahler acquisition is expected to strengthen the Company's strategic position as a producer of complete EGR systems and create additional market opportunities in both passenger and commercial vehicle applications.

The operating results and assets are reported within the Company's Engine reporting segment as of the date of the acquisition. The Company paid $110.5 million, which is recorded as an investing activity in the Company's Condensed Consolidated Statement of Cash Flows. Additionally, the Company assumed retirement-related liabilities of $3.2 million and assumed debt of $40.3 million, which are reflected in the supplemental cash flow information on the Company's Condensed Consolidated Statement of Cash Flows.

The following table summarizes the aggregated estimated fair value of the assets acquired and liabilities assumed on February 28, 2014, the date of acquisition:



(millions of dollars)
Receivables, net	$	52.4
Inventories, net	46.8
Property, plant and equipment, net	55.3
Goodwill	76.9
Other intangible assets	42.7
Other assets and liabilities	(49.7		)
Accounts payable and accrued expenses	(70.4		)
Total consideration, net of cash acquired	154.0

Less: Assumed retirement-related liabilities	3.2
Less: Assumed debt	40.3
Cash paid, net of cash acquired	$	110.5

In connection with the acquisition, the Company capitalized $24.9 million for customer relationships, $10.2 million for know-how, $4.1 million for patented technology and $3.5 million for the Wahler trade name. These intangible assets will be amortized over a period of five to 15 years. The income approach was used to determine the fair value of all intangible assets. Additionally, $56.9 million in goodwill is expected to be non-deductible for tax purposes.

The Company has recorded fair value adjustments based on new information obtained during the measurement period. These changes have resulted in an increase in goodwill of $29.6 million from the Company's initial estimate. These adjustments are primarily related to various product warranty issues. Subsequent adjustments may be necessary based on the finalization of certain estimates for contingencies.

BorgWarner BERU Systems Korea Co., Ltd.

During the third and fourth quarters of 2012, the Company completed the purchase of the remaining 49% of BorgWarner BERU Systems Korea Co., Ltd. for $15.0 million in cash, which has been classified as a financing activity within the Consolidated Statement of Cash Flows. In accordance with ASC Topic 810,"Consolidation," the Company reduced its noncontrolling interest balance by $7.0 million and reduced capital in excess of par value by $8.0 million. As a result of these transactions, the Company now owns 100% of BorgWarner BERU Systems Korea Co., Ltd.

Spark plug business

During the second and third quarters of 2012, the Company incurred $39.7 million in expense associated with the loss on sale of the spark plug business to Federal-Mogul Corporation primarily related to the write-down of prior purchase price accounting adjustments. These purchase price accounting adjustments were originally reported in the Engine segment and related to the BERU acquisition. As a result of the sale, the Company received $55.2 million in cash, which is classified as an investing activity within the Consolidated Statement of Cash Flows. The sale has allowed the Company to continue to focus on expanding BERU Systems' core products of glow plugs, diesel cold start systems and other gasoline ignition technologies.