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Divestitures | 12 Months Ended
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Dec. 31, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Divestitures | 17. Divestitures: During the third quarter of 2023, we obtained Board of Directors' approval and signed an agreement with Glen Dimplex Group, a private Irish company, for the sale of our Hyfra operations. The sale was completed on October 31, 2023. The following table summarizes the net gain recognized in connection with this divestiture in the fourth quarter.
(Amounts in millions) | For the Year Ended December 31, 2023
Cash received from the buyer | $ | 31.4 |
Account receivable (1) | 1.8 |
Net assets sold | (18.6) |
AOCI reclassification adjustments, primarily foreign currency translation | (3.1) |
Direct costs to sell | (4.0) |
Gain on sale of business | $ | 7.5 |
(1) Total gain of $7.5 million includes a $1.8 million working capital true up due to us from the buyer in connection with the disposition. Additionally during the third quarter of 2023, we obtained Board of Directors' approval and signed an agreement with Syntagma Capital Partners, a private Belgium company, for the sale of our European commercial HVAC and refrigeration operations. The sale was completed on December 29, 2023. In the third quarter of 2023 we recorded an impairment of $63.2 million related to the sale. The impairment consisted of a $38.3 million valuation allowance for the difference between the estimated consideration, net of our estimated costs to sell and the carrying value of the net assets, including related amounts in accumulated other comprehensive loss, $22.6 million impairment of property, plant and equipment and $2.3 million impairment of goodwill. Under the terms of the agreement, the consideration to be paid by the buyer consists of the following: •Cash paid at closing; •Note receivable issued by buyer at closing, which is due on the fifth anniversary of the closing date and carries interest at 7.5% per annum. The fair value of the note receivable was estimated as $9.9 million at closing, and; •Contingent consideration related to 2023 and 2024 financial performance of the entities disposed. We have elected to treat this as a gain contingency under ASC 450, therefore none of the contingent consideration associated with the transaction will be recorded until final settlement of the contingent consideration. The following table summarizes the net gain recognized after the recording of the impairment with this divestiture.
(Amounts in millions) | For the Year Ended December 31, 2023
Cash received from the buyer | $ | 6.7 |
Fair value of note receivable | 9.9 |
Net assets sold | 7.3 |
AOCI reclassification adjustments, primarily foreign currency translation | (10.9) |
Direct costs to sell | (10.2) |
Gain on sale of businesses | $ | 2.8 |
The total gain on the sale of Hyfra and our European HVAC and refrigeration divestitures of $10.3 million is net of $3.8 million of tax associated with the sale. This $3.8 million tax item is included in Income tax expense in our Statement of Operations. The total gain included in operating income is $14.1 million. The total cash consideration received from these divestitures was $38.1 million. At the date of closing the divested entities held $14.9 million in cash, thus the net proceeds from the sale of the businesses was $23.2 million.

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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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