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Acquisitions | 9 Months Ended
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Sep. 30, 2017
Business Combinations [Abstract] |
Acquisitions | Acquisitions Pending Acquisition Accella On September 29, 2017, the Company entered into a definitive purchase agreement to acquire Accella Holdings LLC, the parent company to Accella Performance Materials Inc. (collectively "Accella"), a specialty polyurethane platform, from Accella Performance Materials LLC, a subsidiary of Arsenal Capital Partners, for $670 million in cash and subject to a cash, working capital and indebtedness settlement. Accella offers a wide range of polyurethane products and solutions across a broad diversity of markets and applications. The transaction is expected to close during the fourth quarter of 2017, pending regulatory approvals. Upon completion of the transaction, the results of operations of the acquired business will be reported as part of the Construction Materials segment. 2017 Acquisitions Proforma results of operations for the 2017 acquisitions have not been presented because the effect of these acquisitions was not material to the Company's financial condition or results of operations for any of the periods presented. Drexel Metals On July 3, 2017, the Company acquired 100% of the equity of Drexel Metals, Inc., ("Drexel Metals") for cash consideration of $55.8 million. Drexel Metals is a leading provider of architectural standing seam metal roofing systems for commercial, institutional and residential applications. The preliminary purchase price allocation is in its early stages and all items are pending valuation. In the third quarter and first nine months of 2017, Drexel Metals contributed net sales of $12.8 million and EBIT of $(0.9) million to the Company's consolidated results. The results of operations of the acquired business are reported within the Construction Materials segment. Consideration has been allocated to goodwill of $26.9 million, $19.0 million to definite-lived intangible assets, $10.4 million to indefinite-lived intangible assets, $8.8 million to inventory, $5.3 million to accounts receivable, $5.8 million to accounts payable and $10.8 million to deferred income and other taxes payable. Definite-lived intangible assets consist of customer relationships with an estimated useful life of nine years. Of the $26.9 million of goodwill, none is deductible for tax purposes. All of the goodwill was assigned to the CCM reporting unit, which aligns with the reportable segment. Arbo On January 31, 2017, the Company acquired 100% of the equity of Arbo Holdings Limited (“Arbo”) for estimated consideration of GBP 9.1 million or $11.5 million, including the estimated fair value of contingent consideration of GBP 2.0 million or $2.5 million and a working capital settlement, which was finalized in the second quarter of 2017. Arbo is a provider of sealants, coatings, and membrane systems used for waterproofing and sealing buildings and other structures. In the third quarter of 2017, Arbo contributed net sales of $4.1 million and EBIT of $0.2 million to the Company's consolidated results; for the first nine months of 2017, Arbo contributed net sales of $10.3 million and EBIT of $0.3 million. The results of operations of the acquired business are reported within the Construction Materials segment. Consideration has been allocated to goodwill of $4.7 million, $2.2 million to definite-lived intangible assets, $2.1 million to inventory, $1.6 million to indefinite-lived intangibles, $1.5 million to accounts receivable, $1.4 million to accounts payable, and $1.4 million to deferred income and other taxes payable. Definite-lived intangible assets consist of customer relationships with an estimated useful life of 15 years. Of the $4.7 million of goodwill, $1.3 million is deductible for tax purposes. All of the goodwill was assigned to the CCM reporting unit, which aligns with the reportable segment. San Jamar On January 9, 2017, the Company acquired 100% of the equity of SJ Holdings, Inc. (“San Jamar”) for consideration of $217.2 million. San Jamar is a provider of universal dispensing systems and food safety products for foodservice and hygiene applications. San Jamar complements the operating performance at FoodService Products by adding new products, opportunities to expand the Company's presence in complementary sales channels, and a history of profitable growth. In the third quarter of 2017, San Jamar contributed net sales of $22.9 million and EBIT of $2.8 million to the Company's consolidated results; for the first nine months of 2017, San Jamar contributed net sales of $64.9 million and EBIT of $3.5 million. The results of operations of the acquired business are reported within the FoodService Products segment. The following table summarizes the consideration transferred to acquire San Jamar and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed.
|  | Preliminary Allocation |  | Measurement Period Adjustments |  | Revised Preliminary Allocation
(in millions) |  | As of 1/9/2017 |  |  | As of 9/30/2017
Total consideration transferred |  | $ | 217.2 |  |  | $ | — |  |  | 217.2 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 3.5 |  |  | $ | — |  |  | 3.5 |
Receivables |  | 9.1 |  |  | — |  |  | 9.1 |
Inventories |  | 13.1 |  |  | 0.4 |  |  | 13.5 |
Prepaid expenses and other current assets |  | 2.3 |  |  | 0.2 |  |  | 2.5 |
Property, plant, and equipment |  | 4.2 |  |  | — |  |  | 4.2 |
Definite-lived intangible assets |  | 135.1 |  |  | (0.2 | ) |  | 134.9 |
Indefinite-lived intangible assets |  | 23.6 |  |  | — |  |  | 23.6 |
Other long-term assets |  | 3.2 |  |  | — |  |  | 3.2 |
Accounts payable |  | (7.0 | ) |  | — |  |  | (7.0 | )
Income tax payable |  | (0.5 | ) |  | — |  |  | (0.5 | )
Accrued expenses |  | (4.3 | ) |  | (0.9 | ) |  | (5.2 | )
Other long-term liabilities |  | (4.8 | ) |  | 0.3 |  |  | (4.5 | )
Deferred income taxes |  | (47.2 | ) |  | (2.4 | ) |  | (49.6 | )
Total identifiable net assets |  | 130.3 |  |  | (2.6 | ) |  | 127.7 |
Goodwill |  | $ | 86.9 |  |  | $ | 2.6 |  |  | $ | 89.5 |
The valuation of property, plant, and equipment, intangible assets, and income tax obligations is preliminary. The valuation is expected to be completed in the fourth quarter of 2017, pending receipt of the final definitive valuation report. The goodwill recognized in the acquisition of San Jamar is attributable to its experienced workforce, expected operational improvements through implementation of the Carlisle Operating System (“COS”), opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities, and the significant strategic value of the business to Carlisle. Of the $89.5 million of goodwill, $5.0 million is deductible for tax purposes. All of the goodwill was assigned to the CFS reporting unit, which aligns with the reportable segment. The $134.9 million value allocated to definite-lived intangible assets consists of $97.8 million of customer relationships with an estimated useful life of 13 years, various acquired technologies of $36.4 million with useful lives ranging from seven to 10 years, and a non-compete agreement of $0.7 million with an estimated useful life of two years. Indefinite-lived intangible assets consist of acquired trade names. As a result of the acquisition, the Company recognized approximately $4.5 million of pre-acquisition tax liabilities, with a corresponding indemnification asset of $3.6 million, as the seller has indemnified Carlisle for certain of these liabilities. The indemnification asset will be subsequently measured and recognized on the same basis as the corresponding liability. The related seller indemnification asset will expire in stages through the third quarter of 2021, unless claims are made against the seller prior to that date. 2016 Acquisitions Proforma results of operations for the 2016 acquisitions have not been presented because the effect of these acquisitions was not material to the Company's financial condition or results of operations for any of the periods presented. Star Aviation On October 3, 2016, the Company acquired 100% of the equity of Star Aviation, Inc. (“Star Aviation”), for consideration of $82.7 million. Star Aviation is a provider of design and engineering services, testing and certification work, and manufactured products for in-flight connectivity applications on commercial, business, and military aircraft. In the third quarter of 2017, Star Aviation contributed net sales of $11.8 million and EBIT of $3.3 million to the Company's consolidated results; for the first nine months of 2017, Star Aviation contributed net sales of $27.8 million and EBIT of $4.4 million. The results of operations of the acquired business are reported within the Interconnect Technologies segment. The following table summarizes the consideration transferred to acquire Star Aviation and the final allocation of the purchase price among the assets acquired and liabilities assumed.
|  | Preliminary Allocation |  | Measurement Period Adjustments |  | Final Allocation
(in millions) |  | As of 10/3/2016 |  |  | As of 9/30/2017
Total consideration transferred |  | $ | 82.7 |  |  | $ | — |  |  | $ | 82.7 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 0.3 |  |  | $ | — |  |  | $ | 0.3 |
Receivables |  | 5.9 |  |  | (0.1 | ) |  | 5.8 |
Inventories |  | 3.1 |  |  | (0.2 | ) |  | 2.9 |
Prepaid expenses and other current assets |  | 0.1 |  |  | — |  |  | 0.1 |
Property, plant, and equipment |  | 3.3 |  |  | (0.3 | ) |  | 3.0 |
Definite-lived intangible assets |  | 29.0 |  |  | — |  |  | 29.0 |
Accounts payable |  | (1.3 | ) |  | 0.2 |  |  | (1.1 | )
Accrued expenses |  | (0.8 | ) |  | 0.1 |  |  | (0.7 | )
Total identifiable net assets |  | 39.6 |  |  | (0.3 | ) |  | 39.3 |
Goodwill |  | $ | 43.1 |  |  | $ | 0.3 |  |  | $ | 43.4 |
The valuation of property, plant, and equipment and intangible assets is final as of September 30, 2017. The goodwill recognized in the acquisition of Star Aviation is attributable to its experienced workforce, expected operational improvements through implementation of COS, opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities, and the significant strategic value of the business to Carlisle. Goodwill of $43.4 million is deductible for tax purposes in the U.S. All of the goodwill was assigned to the CIT reporting unit, which aligns with the reportable segment. The $29.0 million value allocated to definite-lived intangible assets consists of $23.9 million of customer relationships with estimated useful lives ranging from five to 10 years, various acquired technologies of $4.7 million with an estimated useful life of six years, and a non-compete agreement of $0.4 million with a useful life of five years. Micro-Coax On June 10, 2016, the Company acquired 100% of the equity of Micro-Coax, Inc., and Kroll Technologies, LLC, (collectively “Micro-Coax”) for total consideration of $96.6 million. The Company finalized the working capital settlement in the fourth quarter of 2016. The acquired business is a provider of high-performance, high frequency coaxial wire and cable and cable assemblies to the defense, satellite, test and measurement, and other industrial markets. In the third quarter of 2017, Micro-Coax contributed net sales of $9.6 million and EBIT of $1.9 million to the Company's consolidated results; for the first nine months of 2017, Micro-Coax contributed net sales of $25.3 million and EBIT of $(0.6) million. The results of operations of the acquired business are reported within the Interconnect Technologies segment. The following table summarizes the consideration transferred to acquire Micro-Coax and the final allocation of the purchase price among the assets acquired and liabilities assumed.
|  | Preliminary Allocation |  | Measurement Period Adjustments |  | Final Allocation
(in millions) |  | As of 6/10/2016 |  |  | As of 6/30/2017
Total consideration transferred |  | $ | 97.3 |  |  | $ | (0.7 | ) |  | $ | 96.6 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1.5 |  |  | $ | — |  |  | $ | 1.5 |
Receivables |  | 6.3 |  |  | — |  |  | 6.3 |
Inventories |  | 8.6 |  |  | — |  |  | 8.6 |
Prepaid expenses and other current assets |  | 0.4 |  |  | (0.1 | ) |  | 0.3 |
Property, plant, and equipment |  | 30.0 |  |  | (14.0 | ) |  | 16.0 |
Definite-lived intangible assets |  | 31.5 |  |  | (5.0 | ) |  | 26.5 |
Indefinite-lived intangible assets |  | 2.0 |  |  | (2.0 | ) |  | — |
Other long-term assets |  | 1.0 |  |  | — |  |  | 1.0 |
Accounts payable |  | (1.7 | ) |  | — |  |  | (1.7 | )
Accrued expenses |  | (2.4 | ) |  | (0.1 | ) |  | (2.5 | )
Total identifiable net assets |  | 77.2 |  |  | (21.2 | ) |  | 56.0 |
Goodwill |  | $ | 20.1 |  |  | $ | 20.5 |  |  | $ | 40.6 |
The valuation of property, plant, and equipment and intangible assets was final as of June 30, 2017. The goodwill recognized in the acquisition of Micro-Coax is attributable to its experienced workforce, expected operational improvements through implementation of COS, opportunities for product line expansions in addition to supply chain efficiencies and other administrative opportunities, and the significant strategic value of the business to Carlisle. Goodwill of $40.6 million is deductible for tax purposes in the U.S. All of the goodwill was assigned to the CIT reporting unit, which aligns with the reportable segment. The $26.5 million value allocated to definite-lived intangible assets consists of $14.5 million of customer relationships with a useful life of 12 years, various acquired technologies of $10.6 million with a useful life of approximately seven years, an amortizable trade name of $0.9 million with a useful life of 10 years, and a non-compete agreement of $0.5 million with a useful life of three years. MS Oberflächentechnik AG On February 19, 2016, the Company acquired 100% of the equity of MS Oberflächentechnik AG (“MS Powder”), a Swiss-based developer and manufacturer of powder coating systems and related components, for total consideration of CHF 12.3 million, or $12.4 million, including the estimated fair value of contingent consideration of CHF 4.3 million, or $4.3 million. In the third quarter of 2017, MS Powder contributed net sales of $2.8 million and EBIT of $(0.3) million to the Company's consolidated results; for the first nine months of 2017, MS Powder contributed net sales of $6.9 million and EBIT of $(1.7) million.The results of operations of MS Powder are reported within the Fluid Technologies segment. Consideration has been allocated to definite-lived intangible assets of $9.7 million, $4.1 million to indefinite-lived intangible assets, and $2.2 million to deferred tax liabilities, with $2.9 million allocated to goodwill. Definite-lived intangible assets consist of $8.3 million of technology with a useful life of seven years and customer relationships of $1.4 million with a useful life of ten years. None of the goodwill is deductible for tax purposes. All of the goodwill was assigned to the CFT reporting unit, which aligns with the reportable segment. Prior Acquisition Matters LHi Technology In conjunction with the October 2014 acquisition of LHi Technology (“LHi”), the Company recorded an indemnification asset of $8.7 million in other long-term assets relating to the indemnification of Carlisle for certain pre-acquisition liabilities, principally related to direct and indirect tax uncertainties. During the third quarter of 2016, the Company concluded that $2.6 million of the indirect tax uncertainties were no longer probable, therefore resulting in the reversal of the related indemnification asset and the corresponding liability. During the third quarter of 2017, the escrow covering the remaining direct and indirect tax uncertainties expired and the remaining indirect tax uncertainties were no longer probable, resulting in the reversal of the $6.1 million indemnification asset and corresponding $1.5 million liability, with the net change of $4.6 million reflected in the Corporate segment and other expense (income), net in the Consolidated Statement of Earnings.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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