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Divestitures | 9 Months Ended
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Sep. 27, 2024
Discontinued Operations and Disposal Groups [Abstract] |
Divestitures | NOTE 4. DIVESTITURES Pending Mobility Divestiture On September 14, 2024, we entered into a definitive agreement with Platform Science to sell our Mobility business, which is part of our T&L segment. The pending transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings. As part of the agreement, we will own, and have rights to acquire, 32.5% of Platform Science’s expanded business upon the closing of the pending transaction, for an approximate fair value of $248.7 million. We will receive (i) shares of preferred stock of Platform Science, with certain liquidation preferences, that represent 28.5% of Platform Science’s expanded business and (ii) warrants allowing us the rights to acquire 4% of Platform Science’s expanded business. We expect the pending transaction to close in the first half of 2025, subject to customary closing conditions and regulatory approval. Upon the closing, our equity ownership interest will be reported at cost under the measurement alternative election for equity investments. The assets and liabilities of Mobility are classified as held for sale beginning in the third quarter of 2024. A valuation allowance was established to reduce the carrying value of the disposal group assets to fair value. The fair value of the disposal group was determined based on unobservable inputs, including discounted cash flow projections, market comparables, and an option pricing model. As a result, in the third quarter of 2024, we recorded a pre-tax loss of approximately $23.5 million included within Divestitures (loss) gain, net in our Condensed Consolidated Statements of Income. The following table presents the major classes of assets and liabilities classified as held for sale as of the third quarter of 2024, including the valuation allowance.
| As of
| Third Quarter of 2024
(In millions) |
Cash and cash equivalents | $ | 17.1 |
Accounts receivable, net | 65.1 |
Inventories, net | 25.2 |
Other current assets | 9.5 |
Goodwill | 147.3 |
Other non-current assets | 61.0 |
Valuation allowance | (13.5) |
Total Assets held for sale | $ | 311.7 |
Accounts payable | $ | 4.1 |
Deferred revenue, current | 12.0 |
Other current liabilities | 13.7 |
Deferred revenue, non-current | 5.2 |
Other non-current liabilities | 6.6 |
Total Liabilities held for sale | $ | 41.6 |
Ag Divestiture On September 28, 2023, we executed a Sale and Contribution Agreement with AGCO that provided for the formation of a joint venture, called PTx Trimble, that operates in the mixed fleet precision agriculture market. The agreement was amended and restated on March 31, 2024, and the transaction closed on April 1, 2024. Under the terms of the agreement, we contributed our Ag business, excluding certain GNSS and guidance technologies, to PTx Trimble, an LLC. Following the closing of the transaction, we own 15% and AGCO owns 85% of PTx Trimble. The agreement provides AGCO with a call option and Trimble with a put option with respect to our retained interest in PTx Trimble. Ag was reported as a part of our Field Systems segment. Upon closing of the transaction in the second quarter of 2024, we received $1.9 billion of cash proceeds from AGCO, subject to working capital adjustments. As a result, we deconsolidated $457.3 million of net assets, including $357.4 million of goodwill, and recognized a pre-tax gain of $1.7 billion. The gain included $275.6 million for our retained 15% ownership interest in PTx Trimble, which is reported as an equity method investment. The fair value of our equity method investment was determined by using a combination of the equity value, primarily based on the transaction price, and an option pricing model for a put and call option. In addition to forming PTx Trimble, the parties concurrently entered into agreements that included the following: •a seven-year renewable supply agreement (the “Supply Agreement”) through which we will provide key GNSS and guidance technologies to PTx Trimble for use in professional agriculture machines sold by AGCO, on an exclusive basis with limited exceptions; •a technology transfer and license agreement to govern the licensing of certain non-divested intellectual property and technology for use by PTx Trimble in the agriculture field and, upon expiration of the Supply Agreement, to govern fixed and variable royalty payments made to us by PTx Trimble; •a trademark license agreement to govern the licensing of certain Trimble trademarks for use by PTx Trimble in the agriculture field; •a master sale and distribution agreement through which PTx Trimble will serve as our channel partner for positioning services in the agriculture market; and •a transition services agreement to provide contract manufacturing services for the divested products for two years following the closing of the transaction.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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