Acquisitions and Divestitures

12 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

FM:Systems Acquisition

In July 2023, the Company completed its acquisition of FM:Systems, a leading digital workplace management and Internet of Things ("IoT") solutions provider for facilities and real estate professionals, for $540 million, net of cash acquired, which was comprised of an upfront cash payment of $465 million, net of cash acquired, and the estimated fair value at the acquisition date of contingent earn-out liabilities of $75 million. The contingent earn-out liabilities are primarily based upon the achievement of certain defined operating results in the two years following the acquisition, with a maximum payout of $155 million.

In connection with the acquisition, the Company recorded goodwill of $399 million in the Building Solutions North America segment. Goodwill is attributable primarily to expected synergies, expanded market opportunities and other benefits that the Company believes will result from integrating the products and capabilities of FM:Systems into its operations. The goodwill created in the acquisition is not deductible for tax purposes.

The preliminary fair values of the assets acquired and liabilities assumed related to FM:Systems are as follows (in millions):


Cash and cash equivalents	$	8
Accounts receivable	15
All other current assets	9
Goodwill	399
Intangible assets	194
All other noncurrent assets	7
Total assets acquired	632

Deferred revenue	24
All other current liabilities	49
Other noncurrent liabilities	11
Total liabilities acquired	84
Net assets acquired	$	548

The purchase price allocation to identifiable intangible assets acquired is as follows:



	Fair Value (in millions)		Weighted Average Life (in years)
Customer relationships	$	117	10
Technology	74		10

Trademarks and other definite-lived intangibles	3		4
Total identifiable intangible assets	$	194

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 of contingent earn-out liabilities at the acquisition date 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 Company recorded reductions in the fair value of the contingent earn-out liability of $30 million and $43 million during the years ended September 30, 2023 and 2022, respectively. No earn-out payments were made for the twelve-month earn-out periods ended April 30, 2023 and 2022, as the performance measures for the periods were not achieved.

Other Acquisitions

During fiscal 2023, the Company acquired several other businesses for a combined purchase price, net of cash acquired, of $306 million, of which $260 million was paid as of September 30, 2023. Intangible assets associated with these acquisitions totaled $116 million and primarily relate to customer relationships and technology. The Company recorded goodwill associated with these acquisitions of $119 million in the Global Products segment, $55 million in the Building Solutions Asia Pacific segment and $13 million in the Building Solutions EMEA/LA segment.

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. The Company recorded goodwill associated with these acquisitions 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 Asia Pacific segment and $36 million was assigned to the Building Solutions North America segment.

Other acquisitions were not material individually or in the aggregate in fiscal 2023 and 2022.

Divestitures

Refer to Note 3, "Assets and Liabilities Held for Sale & Discontinued Operations," of the notes to the consolidated financial statements for disclosure of a business in the Building Solutions Asia Pacific segment that was sold on August 1, 2023. No divestitures were material individually or in the aggregate in fiscal 2023 and 2022.