Acquisitions

6 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Acquisitions

Note 3 - Acquisitions

The Company completed one acquisition in 2020. On November 30, 2020, the Company completed the acquisition of the assets of Aurora Bearing Company ("Aurora"). With annual sales of approximately $30 million, Aurora serves a diverse range of industrial sectors, including aerospace and defense, racing, off-highway equipment and packaging. Aurora is headquartered in Montgomery, Illinois. The total purchase price for this acquisition was $17.2 million, including a post-closing net working capital adjustment. Based on markets and customers served, results for Aurora are reported in both the Mobile Industries segment and the Process Industries segment.

The following table presents the purchase price allocation at fair value, net of cash acquired, for the Aurora acquisition as of June 30, 2021: 

	Initial Purchase Price Allocation		Adjustments		Purchase Price Allocation
Assets:
Accounts receivable, net	$	2.7	$	—	$	2.7
Inventories, net	16.4		—		16.4
Other current assets	0.1		0.1		0.2
Property, plant and equipment, net	10.9		—		10.9
Total assets acquired	$	30.1	$	0.1	$	30.2
Liabilities:
Accounts payable, trade	$	0.8	$	—	$	0.8
Other current liabilities	0.9		(0.4)		0.5
Total liabilities assumed	1.7		(0.4)		1.3
Net assets acquired	$	28.4	$	0.5	$	28.9

As a result of applying the accounting rules on business combinations, the Company recognized a bargain purchase gain of $11.7 million on the acquisition of Aurora. The Company recognized $0.6 million of the bargain purchase price gain during the first three months of 2021 primarily due to the net working capital adjustment. The Company believes it was able to negotiate a bargain purchase price for the business due to some historic operational performance challenges, as well as the seller's desire to exit the business in an expedited manner in an exclusive process with the Company.

In determining the fair value of the amounts above, the Company utilized various forms of the income, cost and market approaches depending on the asset or liability being valued. The estimation of fair value required significant judgment related to future net cash flows, discount rates, competitive trends, market comparisons and other factors. Inputs were generally determined by taking into account independent appraisals and historical data, supplemented by current and anticipated market conditions.

During the applicable measurement period, the Company 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 above purchase price allocation is subject to change as additional information concerning final asset and liability valuations is obtained. The primary area of the Aurora purchase price allocation that has not been finalized relates to the fair value of inventory. Any changes in fair value could affect the bargain purchase price gain recognized.