Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2019

Acquisitions and Divestitures [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The purchase price allocations at fair value, net of cash acquired, for 2019 and 2018 acquisitions as of December 31, 2019 and 2018 are presented below:

	2019			2018
Assets:
Accounts receivable	$	26.3		$	42.5
Inventories	62.9			61.6
Other current assets	4.9			8.5
Property, plant and equipment	57.4			71.7
Operating lease assets	4.7			—
Goodwill	44.2			468.2
Other intangible assets	84.4			372.6
Other non-current assets	0.7			20.2
Total assets acquired	$	285.5		$	1,045.3
Liabilities:
Accounts payable, trade	$	10.8		$	35.2
Salaries, wages and benefits	6.8			9.1
Income taxes payable	2.1			2.5
Other current liabilities	6.7			8.2
Short-term debt	0.8			2.5
Long-term debt	17.2			3.0
Accrued pension cost	0.5			5.7
Accrued postretirement liability	0.1			11.7
Long-term operating lease liabilities	4.1			—
Deferred taxes	5.1			116.2
Other non-current liabilities	1.1			16.9
Total liabilities assumed	$	55.3		$	211.0
Noncontrolling interest acquired	1.8			—
Net assets acquired	$	228.4		$	834.3
Cash flow reconciling items:
Indemnification payment (accrual)	$	2.9		$	(2.9	)
Working capital purchase price adjustment	(4.8		)	—
Shares issued for the acquisition of ABC Bearings	—			(66.0		)
Cash paid for acquisitions, net of cash acquired	$	226.5		$	765.4

Business Combination Disclosure [Text Block]

Note 2 - Acquisitions and Divestitures

The Company completed two acquisitions in 2019. On November 1, 2019, the Company completed the acquisition of BEKA, a leading global supplier of automatic lubrication systems. With expected 2019 annual sales of approximately $135 million, BEKA serves a diverse range of industrial sectors, including wind, food and beverage, rail, on- and off-highway and other process industries. Headquartered in Pegnitz, Germany, BEKA has manufacturing and research and development based in Germany, and assembly facilities and sales offices around the world. On April 1, 2019, the Company completed the acquisition of Diamond Chain, a leading supplier of high-performance roller chains for industrial markets. Diamond Chain serves a diverse range of market sectors, including industrial distribution, material handling, food and beverage, agriculture, construction and other process industries. Diamond Chain, located in Indianapolis, Indiana, operates primarily in the United States and China and had sales of approximately $60 million for the twelve months ended March 31, 2019. The total purchase price for these acquisitions was $252.2 million, which includes cash consideration of $228.4 million, net of cash acquired of $5.9 million, plus assumed debt of $17.9 million. The Company incurred acquisition-related costs of $4.0 million in 2019 to complete these acquisitions. Based on markets and customers served, the majority of the results for BEKA are reported in the Mobile Industries segment, and a majority of the results for Diamond Chain are reported in the Process Industries segment.

During 2018, the Company completed three acquisitions. On September 18, 2018, the Company completed the acquisition of Rollon, a leader in engineered linear motion products, specializing in the design and manufacture of linear guides, telescopic rails and linear actuators used in a wide range of industries such as passenger rail, aerospace, packaging and logistics, medical and automation. On September 1, 2018, the Company completed the acquisition of Cone Drive, a leader in precision drives used in diverse markets including solar, automation, aerial platforms, and food and beverage. On August 30, 2018, the Company's majority-owned subsidiary, Timken India, completed the acquisition of ABC Bearings, a manufacturer of tapered, cylindrical and spherical roller bearings and slewing rings in India. Consideration for the acquisition of ABC Bearings consisted of Timken India stock. Refer to the Consolidated Statement of Shareholders' Equity for more information on the acquisition of ABC Bearings. The total purchase price for these acquisitions, net of cash acquired of $30.1 million, was $829.5 million, which represents $834.3 million as of December 31, 2018 net of purchase price adjustments of $4.8 million made in 2019. Also, the total purchase price for 2018 acquisitions included $540.0 million for Rollon. The Company incurred acquisition-related costs of $9.6 million in 2018 to complete these acquisitions. Based on markets and customers served, the majority of the results for Rollon and Cone Drive are reported in the Process Industries segment and substantially all of the results for ABC Bearings are reported in the Mobile Industries segment.

The purchase price allocations at fair value, net of cash acquired, for 2019 and 2018 acquisitions as of December 31, 2019 and 2018 are presented below:

	2019			2018
Assets:
Accounts receivable	$	26.3		$	42.5
Inventories	62.9			61.6
Other current assets	4.9			8.5
Property, plant and equipment	57.4			71.7
Operating lease assets	4.7			—
Goodwill	44.2			468.2
Other intangible assets	84.4			372.6
Other non-current assets	0.7			20.2
Total assets acquired	$	285.5		$	1,045.3
Liabilities:
Accounts payable, trade	$	10.8		$	35.2
Salaries, wages and benefits	6.8			9.1
Income taxes payable	2.1			2.5
Other current liabilities	6.7			8.2
Short-term debt	0.8			2.5
Long-term debt	17.2			3.0
Accrued pension cost	0.5			5.7
Accrued postretirement liability	0.1			11.7
Long-term operating lease liabilities	4.1			—
Deferred taxes	5.1			116.2
Other non-current liabilities	1.1			16.9
Total liabilities assumed	$	55.3		$	211.0
Noncontrolling interest acquired	1.8			—
Net assets acquired	$	228.4		$	834.3
Cash flow reconciling items:
Indemnification payment (accrual)	$	2.9		$	(2.9	)
Working capital purchase price adjustment	(4.8		)	—
Shares issued for the acquisition of ABC Bearings	—			(66.0		)
Cash paid for acquisitions, net of cash acquired	$	226.5		$	765.4

As reflected in table above, the Company paid a working capital adjustment of $2.9 million in January 2019 in connection with the Cone Drive acquisition, which was accrued and reflected in the purchase price in 2018. In May 2019, the Company received a $4.8 million payment from escrow related to an indemnification settlement for the Cone Drive acquisition, which is reflected as a purchase price adjustment. This adjustment, as well as other measurement period adjustments recorded in 2019, resulted in a $1.9 million increase to Goodwill.

The 2019 acquisitions presented above include goodwill of $25.4 million and intangible assets of $55.1 million for BEKA, and the 2018 acquisitions presented above include goodwill of $311.5 million and intangible assets of $261.7 million for Rollon.

The amounts for 2019 in the table above represent the preliminary purchase price allocations for Diamond Chain and BEKA. These purchase price allocations, including the residual amount allocated to goodwill, are based on preliminary information and are subject to change as additional information concerning final asset and liability valuations is obtained. The purchase price allocation for Diamond Chain is incomplete as it relates to the final determination of fair value for contingencies, intangible assets and certain income tax adjustments. The purchase price allocation for BEKA is preliminary as a result of the proximity of the acquisition date to December 31, 2019, and as a result, no elements of the purchase price allocation have been finalized. During the measurement period for each acquisition, we will adjust assets and liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. The effect of measurement period adjustments to the estimated fair values will be reflected as if the adjustments had been completed on the acquisition date.

The following table summarizes the preliminary purchase price allocation at fair value for identifiable intangible assets acquired in 2019 and 2018:

	2019			2018
			Weighted- Average Life			Weighted- Average Life
Trade names (indefinite life)	$	28.2	Indefinite	$	45.3	Indefinite
Trade names (finite life)	—			4.4		10 years
Technology and know-how	22.4		17 years	122.3		17 years
Customer relationships	33.3		19 years	201.5		18 years
Other	—			0.2		6 years
Capitalized software	0.5		2 years	1.7		5 years
Total intangible assets	$	84.4		$	375.4

The total acquired intangible asset amount for 2018 does not agree to the purchase price allocations shown previously due to measurement period adjustments reflected in the purchase price allocations.

Divestiture:

On September 19, 2018, the Company completed the sale of the ICT Business, located in Gorinchem, Netherlands. The Company acquired the business in July 2017 as part of the Groeneveld acquisition. The ICT Business is separate from the Groeneveld lubrications solutions business and had sales of approximately $15 million for the twelve months ended September 30, 2018.

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The following table summarizes the preliminary purchase price allocation at fair value for identifiable intangible assets acquired in 2019 and 2018:

	2019			2018
			Weighted- Average Life			Weighted- Average Life
Trade names (indefinite life)	$	28.2	Indefinite	$	45.3	Indefinite
Trade names (finite life)	—			4.4		10 years
Technology and know-how	22.4		17 years	122.3		17 years
Customer relationships	33.3		19 years	201.5		18 years
Other	—			0.2		6 years
Capitalized software	0.5		2 years	1.7		5 years
Total intangible assets	$	84.4		$	375.4