Acquisitions and Divestitures

12 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

During fiscal 2022, the Company acquired several businesses for a combined purchase price, net of cash acquired, of $323 million, of which $269 million was paid as of September 30, 2022. Intangible assets associated with these acquisitions totaled $123 million and primarily relate to customer relationships and technology. In connection with these acquisitions, the Company recorded goodwill of $194 million, of which $68 million was assigned to the Building Solutions EMEA/LA segment, $45 million was assigned to the Global Products segment, $44 million was assigned to the Building Solutions APAC segment and $36 million was assigned to the Building Solutions North America segment.

Silent-Aire Acquisition

In May 2021, the Company completed its acquisition of Silent-Aire, a global leader in hyperscale data center cooling and modular critical infrastructure solutions, for approximately $755 million, net of cash acquired, which was comprised of an upfront net cash payment of approximately $661 million, the estimated fair value at the acquisition date of contingent earn-out liabilities of approximately $86 million and a working capital adjustment of $8 million. The contingent earn-out liabilities are based upon the achievement of certain defined operating results in each of the three years following the acquisition, with a maximum payout of approximately $250 million. The fair value of contingent earn-out liabilities is reassessed on a quarterly basis and could differ materially from the initial estimates. Subsequent changes in the estimated fair value of contingent earn-out liabilities are recorded in the consolidated statements of income when incurred. Earn-out payments that are less than or equal to the contingent earn-out liabilities on the acquisition date are reflected as financing cash outflows and amounts paid in excess of the contingent earn-out liabilities on the acquisition date are reflected as operating cash outflows. During the year ended September 30, 2022, the Company recorded a reduction in the fair value of the contingent earn-out liability of $43 million. No earn-out payments were made for the first twelve-month earn-out period ended April 30, 2022 as the performance measures for the period were not achieved.

In connection with the acquisition, the Company recorded goodwill of $244 million in the Global Products segment. Goodwill is attributable primarily to expected synergies, expanded market opportunities and other benefits that the Company believes will result from combining its operations with the operations of Silent-Aire. The goodwill created in the acquisition is not deductible for tax purposes.

The original fair values of the assets acquired and liabilities assumed related to Silent-Aire are as follows (in millions):


Cash and cash equivalents	$	5
Accounts receivable	141
Inventories	60
Other current assets	4
Property, plant, and equipment - net	33
Goodwill	244
Intangible assets - net	497
Other noncurrent assets	84
Total assets acquired	1,068

Accounts payable	62
Accrued compensation and benefits	6
Deferred revenue	32
Other current liabilities	12
Other noncurrent liabilities	196
Total liabilities acquired	308
Net assets acquired	$	760

The purchase price allocation to identifiable intangible assets acquired related to Silent-Aire is as follows:



	Fair Value (in millions)		Weighted Average Life (in years)
Customer relationships	$	291	19
Technology	116		13
Other definite-lived intangibles	23		1
Indefinite-lived trademarks	67
Total identifiable intangible assets	$	497

Other acquisitions and divestitures were not material individually or in the aggregate in fiscal 2021 and 2020.