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Acquisitions and Divestitures | 12 Months Ended
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Sep. 30, 2022
Acquisitions And Divestitures [Abstract] |
Acquisitions and Divestitures | Note 10. Acquisitions and Divestitures Acquisitions On August 2, 2022, we entered into a series of Purchase Agreements with one of our Asia pacific channel partners, PM Control PLC (the “PM Agreements”). Pursuant to the PM Agreements, we agreed to acquire business assets and shares of stock of PM Control PLC and its affiliates (collectively, “PM Control”), for a total consideration (excluding cash acquired from the acquisition and including the settlement of pre-existing relationships) of $22,299 (the “PM Acquisition”). The PM Acquisition closed on August 31, 2022 (the “PM Closing”) and PM Control PLC became a wholly owned subsidiary of the Company. ASC Topic 805, “Business Combinations” (“ASC 805”), provides a framework to account for acquisition transactions under U.S. GAAP. The purchase price of PM Control, prepared consistent with the required ASC 805 framework, is allocated as follows:
Cash paid to Sellers |  | $ | 22,890 |
Less acquired cash and restricted cash |  |  | (1,341 | )
Plus settlement of pre-existing relationships |  |  | 750 |
Total purchase price |  | $ | 22,299 |
The allocation of the purchase price to the assets acquired and liabilities assumed was recorded as of the end of business on August 31, 2022 using the purchase method of accounting in accordance with ASC 805. Assets acquired and liabilities assumed in the transaction were recorded at their acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred. Woodward’s allocation was based on an evaluation of the appropriate fair values and represents management’s best estimate. The following table summarizes, as of August 31, 2022, the estimated fair values of the assets acquired and liabilities assumed at the PM Closing.
Accounts receivable |  | $ | 4,334 |
Inventories |  |  | 2,464 |
Other current assets |  |  | 386 |
Property, plant, and equipment |  |  | 2,488 |
Goodwill |  |  | 8,526 |
Intangible assets |  |  | 9,916 |
Total assets acquired |  |  | 28,114 |
Other current liabilities |  |  | (2,688 | )
Deferred income tax liabilities |  |  | (1,842 | )
Other noncurrent liabilities |  |  | (1,285 | )
Total liabilities assumed |  |  | (5,815 | )
Net assets acquired |  | $ | 22,299 |
The preliminary purchase price allocation resulted in the recognition of $8,526 of goodwill, which is expected to be non-deductible for tax purposes. The Company has included all the goodwill in its Industrial segment. The goodwill represents the estimated value of potential expansion with new customers, the opportunity to further develop sales opportunities with new customers, other synergies expected to be achieved through the integration of PM Control with Woodward’s Industrial segment. A summary of the intangible assets acquired, weighted-average useful lives, and amortization methods follows:
|  | Estimated Amounts |  |  | Weighted- Average Useful Life |  | Amortization Method
Intangible assets with finite lives: |  |  |  |  |  |  |  |
Customer relationships and contracts |  | $ | 8,332 |  |  | 11 years |  | Straight-line
Trade name |  |  | 1,584 |  |  | 5 years |  | Straight-line
Total |  | $ | 9,916 |  |  |  |  |
Future amortization expense associated with the acquired intangibles as of September 30, 2022, is expected to be $1,074 for the next five years ended. Due to the timing of the acquisition, we are still finalizing valuations of intangible assets and related tax impacts. The final determination of the fair value of assets and liabilities will be completed within the one-year measurement period as permitted by ASC 805. We have not presented pro forma results because the PM Acquisition was not deemed significant at the date of PM Closing. Divestitures In the first quarter of fiscal year 2020, Woodward’s board of directors (“the Board”) approved a plan to divest Woodward’s renewable power systems business, protective relays business, and other businesses within the Company’s Industrial segment (collectively, the “disposal group”). Woodward determined that the approved plan to divest the disposal group represented a triggering event requiring (i) the net assets of the disposal group to be classified as held for sale and (ii) the long-lived assets attributable to the disposal group be assessed for impairment. Given the facts and circumstances at that time, Woodward determined that the value of the long-lived assets of the disposal group, including goodwill, intangible assets, ROU assets and property, plant, and equipment, were not recoverable and a $22,900 non-cash impairment charge was recorded during the fiscal year ended September 30, 2020. The non-cash impairment charge removed all the goodwill, intangible assets, ROU assets and property, plant, and equipment associated with the disposal group from the Consolidated Balance Sheets as of June 30, 2020. Further, on the approval of the divestiture plan and subsequent marketing of the disposal group, Woodward determined that based on the current market conditions, the carrying value of the disposal group’s remaining held for sale net assets exceeded the fair value. As a result, Woodward recorded a valuation allowance to reduce the carrying value of the net assets of the disposal group to their fair value. The non-cash impairment charge associated with the long-lived assets, and related valuation allowance for the other remaining net assets attributable to the disposal group, resulted in a total impairment charge of $37,902. In determining the amount by which the carrying value of the disposal group’s remaining net assets exceeded their fair value, Woodward considered primarily the market value of the assets held for sale based on negotiations it had entered into with affiliates of the AURELIUS Group for the sale of the majority of the disposal group. On January 31, 2020, Woodward entered into a definitive agreement to sell the majority of the disposal group to affiliates of the AURELIUS Group for $23,400, subject to customary purchase price adjustments, consisting of cash and a $6,000 promissory note, which was due by April 30, 2022. The assets were primarily located in Germany, Poland and Bulgaria and accounted for approximately $88,000 of sales in fiscal year 2019. The valuation reserve recorded to reduce the carrying value of the net assets held for sale was based on the estimated selling price pursuant to the definitive agreement reduced by the estimated working capital adjustments, transaction costs, and anticipated losses on assets held for sale that were not included in the disposal group to be sold to the AURELIUS Group. The transactions consummating the sale of the disposal group were completed on April 30, 2020. The carrying value of the assets and liabilities sold were as follows:
|  | June 30, 2020 |
Assets: |  |  |  |
Accounts receivable |  | $ | 17,637 |
Inventories |  |  | 441 |
Other current assets |  |  | 796 |
Other assets |  |  | 51 |
Total assets |  |  | 18,925 |
Liabilities: |  |  |  |
Accounts payable |  |  | 7,633 |
Accrued liabilities |  |  | 2,998 |
Other liabilities |  |  | 450 |
Total liabilities |  | $ | 11,081 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 + Details
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- Definition Acquisitions and divestitures. + References No definition available. + Details
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