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Acquisitions and Dispositions (Notes) | 9 Months Ended
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Sep. 30, 2023
Acquisitions and Dispositions [Abstract] |
Acquisitions and Dispositions [Text Block] | 14. ACQUISITIONS AND DISPOSITIONS Acquisition of Tekfor Group On June 1, 2022, our acquisition of Tekfor Group became effective and we paid a total purchase price of $94.4 million, which was funded entirely with cash on hand. Tekfor Group manufactures high-performance components, modules and fasteners, including traditional powertrain and driveline components (for both internal combustion and hybrid applications), and e-mobility components. Our acquisition of Tekfor contributes to diversifying our geographic and customer sales mix, while also increasing our electrification product portfolio. The acquisition of Tekfor Group was accounted for under the acquisition method under ASC 805 - Business Combinations with the purchase price allocated to the identifiable assets and liabilities of the acquired company based on the respective fair values of the assets and liabilities. The following represents the fair values of the assets acquired and liabilities assumed resulting from the acquisition (in millions):
Total consideration transferred | $ | 94.4 |
Cash and cash equivalents | $ | 14.3 |
Accounts receivable | 33.7
Inventories | 46.3
Prepaid expenses and other long-term assets | 30.1
Deferred income tax assets | 5.0
Property, plant and equipment | 105.5
Total assets acquired | $ | 234.9 |
Accounts payable | 33.5
Accrued expenses and other | 28.1
Debt | 23.4
Postretirement benefits and other long-term liabilities | 41.9
Net assets acquired | $ | 108.0 |
Gain on bargain purchase of business | $ | 13.6 |
The gain on bargain purchase of business was primarily the result of macroeconomic factors such as the supply chain disruptions impacting the automotive industry, including the conflict between Russia and Ukraine, the semiconductor supply shortage, and increasing input costs, including materials, freight and utilities. We finalized the valuation of the assets and liabilities of Tekfor in the first quarter of 2023 as we concluded the customary post-closing reviews associated with the acquisition. There were no adjustments to the purchase price allocation in the three or nine months ended September 30, 2023. Included in net sales and net loss for the period from January 1, 2023 through September 30, 2023 was approximately $299 million and a loss of approximately $7 million, respectively, attributable to Tekfor. Included in net sales and net income for the period from the acquisition effective date on June 1, 2022 through September 30, 2022 was approximately $121 million and $10 million, respectively, attributable to Tekfor. The net income amount for the period from June 1, 2022 through September 30, 2022 includes the gain on bargain purchase of business of $13.0 million, which was prior to subsequent measurement period adjustments resulting in the final gain on bargain purchase of business of $13.6 million, as well as a one-time expense of $5.0 million for the step-up of inventory to fair value. Unaudited Pro Forma Financial Information Unaudited pro forma net sales for AAM, on a combined basis with Tekfor for the nine months ended September 30, 2022 were $4.55 billion, excluding Tekfor sales to AAM during the period. Unaudited pro forma net income for the nine months ended September 30, 2022 was approximately $40.0 million. Unaudited pro forma earnings per share for the nine months ended September 30, 2022 was $0.33 per share. The unaudited pro forma net income amount for the nine months ended September 30, 2022 has been adjusted by approximately $4 million, net of tax, related to the step-up of inventory to fair value as a result of the acquisition, approximately $5 million, net of tax, for acquisition-related costs, and approximately $13 million for the gain on bargain purchase of business recognized, which was not subject to tax. This resulted in a net adjustment to pro forma net income of approximately $4 million for the first nine months of 2022 as we are required to disclose the unaudited pro forma amounts as if the acquisition of Tekfor had been completed on January 1, 2021. The disclosure of unaudited pro forma net sales and earnings is for informational purposes only and does not purport to indicate the results that would actually have been obtained had the merger been completed on the assumed date for the periods presented, or which may be realized in the future.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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