Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2016

Acquisitions and Divestitures [Abstract]

Business Combination and Divestitures Disclosure [Text Block]

Acquisitions:

During 2016, the Company completed two acquisitions. On October 31, 2016, the Company completed the acquisition of EDT, a manufacturer of polymer housed units and stainless steel ball bearings used primarily in the food and beverage industry. On July 8, 2016, the Company completed the acquisition of Lovejoy, a manufacturer of premium industrial couplings and universal joints. Aggregate sales for these companies for the most recent twelve months prior to their respective acquisitions totaled approximately $61 million. The total purchase price for these two acquisitions was $74.4 million in cash and $2.2 million in assumed debt. The Company acquired cash of approximately $2.5 million, subject to post-closing working capital adjustments, as part of these acquisitions. The Company incurred approximately $1.7 million of legal and professional fees to acquire EDT and Lovejoy. Substantially all of the results for EDT and Lovejoy are reported in the Process Industries segment. The Company assumed certain contingent liabilities, including an environmental liability, as part of the Lovejoy transaction. Refer to Note 11 - Contingencies for additional information on Lovejoy's contingent liabilities.

On September 1, 2015, the Company completed the acquisition of Timken Belts, a leading North American manufacturer of belts used in industrial, commercial and consumer applications, and sold under multiple brand names, including Carlisle®, Ultimax® and Panther®, among others. The acquisition portfolio includes more than 20,000 parts that utilize wrap molded, raw edge, v-ribbed and synchronous belt designs. Aggregate sales for Timken Belts for the most recent twelve months prior to the acquisition was approximately $140 million. The total purchase price for Timken Belts was $213.7 million in cash, including cash acquired of approximately $0.1 million. In June 2016, the Company paid a net purchase price adjustment of $0.7 million, resulting in an adjustment to goodwill. The Company incurred approximately $1.0 million of legal and professional fees to acquire Timken Belts. The results of the operations of Timken Belts are reported in both the Mobile Industries and Process Industries segments based on customers served.

During 2014, the Company completed two acquisitions. On November 30, 2014, the Company completed the acquisition of Revolvo, a specialty bearing company that makes and markets ball and roller bearings for industrial applications in process and heavy industries. On April 28, 2014, the Company completed the acquisition of Schulz, a provider of electric motor and generator repairs, motor rewinds, custom controls and panels, systems integration, pump services, machine rebuilds, hydro services and diagnostics for a broad range of commercial and industrial applications. Aggregate sales for these companies for the most recent twelve months prior to their respective acquisitions totaled approximately $26 million. The total purchase price for these two acquisitions was $21.7 million in cash. The results for Revolvo and Schulz are reported in the Process Industries segment.

Pro forma results of these operations have not been presented because the effects of the acquisitions were not significant to the Company’s income from operations or total assets in any of the years presented.

The purchase price allocations, net of cash acquired, and any subsequent purchase price adjustments for acquisitions in 2016, 2015 and 2014 are presented below:

	2016		2015		2014
Assets:
Accounts receivable	$	8.4	$	13.3	$	4.5
Inventories	17.8		48.5		5.4
Other current assets	5.3		1.1		0.3
Property, plant and equipment	16.5		37.9		2.8
Goodwill	30.6		70.8		4.7
Other intangible assets	27.9		63.9		7.5
Other non-current assets	0.1		—		—
Total assets acquired	$	106.6	$	235.5	$	25.2
Liabilities:
Accounts payable, trade	$	8.1	$	10.2	$	2.3
Salaries, wages and benefits	1.3		1.1		—
Other current liabilities	4.4		1.3		1.0
Long-term debt	2.2		—		—
Accrued pension cost	—		2.3		—
Accrued postretirement liability	—		1.1		—
Deferred taxes	10.4		5.9		—
Other non-current liabilities	7.6		—		0.5
Total liabilities assumed	$	34.0	$	21.9	$	3.8
Net assets acquired	$	72.6	$	213.6	$	21.4

The amounts for 2016 in the table above represent the preliminary purchase price allocations for Lovejoy and EDT. The preliminary purchase accounting for 2016 acquisitions is incomplete as it is subject to working capital adjustments for the EDT acquisition and the final determination of the fair value of the contingent liabilities assumed in the Lovejoy acquisition.

The following table summarizes the preliminary purchase price allocation for identifiable intangible assets acquired in 2016:

	Purchase Price Allocation
			Weighted- Average Life
Trade name (not subject to amortization)	$	3.7	Indefinite
Trade name	0.2		5 years
Technology / Know-how	10.1		19 years
All customer relationships	13.5		20 years
Non-competition agreements	0.2		5 years
Favorable leases	0.1		2 years
Capitalized software	0.1		4 years
Total intangible assets	$	27.9

The following table summarizes the final purchase price allocation for identifiable intangible assets acquired in 2015:

	Purchase Price Allocation
			Weighted- Average Life
Trade name	$	1.7	11 years
Technology / Know-how	17.1		20 years
All customer relationships	43.9		20 years
Non-compete agreements	1.2		3 years
Total intangible assets	$	63.9

Divestitures:

On October 21, 2015, the Company completed the sale of Alcor. Alcor, located in Mesa, Arizona, had sales of $20.6 million for the twelve months ending September 30, 2015. The results of the operations of Alcor were reported in the Mobile Industries segment. The Company recorded proceeds of $43.4 million and recognized a gain on the sale of Alcor of $29.0 million during the fourth quarter of 2015. The gain was reflected in gain on divestitures in the Consolidated Statement of Income.

On April 30, 2015, the Company completed the sale of a service center in Niles, Ohio. The company received $2.8 million in cash proceeds for the service center. The Company recognized a loss of $0.3 million from the sale reflected in gain on divestitures in the Consolidated Statement of Income.

During the third quarter of 2014, the Company classified assets of the aerospace engine overhaul business, located in Mesa, Arizona, as assets held for sale. In connection with this classification, the Company recorded an impairment charge of $1.2 million. In November 2014, the Company sold the assets of the aerospace engine overhaul business for $7.4 million and recorded an immaterial loss.