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Assets Held For Sale and Divestitures | 12 Months Ended
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Dec. 31, 2023
Asset, Held-for-Sale, Not Part of Disposal Group [Abstract] |
Assets Held for Sale and Divestitures | Asset Held-For-Sale - PIM On October 11, 2022, the Company announced entry into a definitive agreement to sell its Pipeline and Industrials Materials (“PIM”) business, which became part of the Company with the acquisition of CMC Materials, to Infineum USA L.P. (“Infineum”). The PIM business specializes in the manufacture and sale of drag reducing agents and a range of valve maintenance products and services, and reports into the Materials Solutions segment (the segment resulting from combining the Advanced Planarization Solutions and the Specialty Chemicals and Engineered Materials segments) of the Company. Effective February 10, 2023, the Company terminated the definitive agreement. In accordance with the terms of the agreement, the Company received a $12.0 million termination fee from Infineum in the first quarter of 2023 and incurred a transaction adviser fee of $1.1 million. The net amount of $10.9 million is recorded in Other expense, net in the consolidated statement of operations. During the fourth quarter of 2022, the related assets and liabilities were classified as held-for-sale in the Company’s consolidated balance sheet and measured at the lower of their carrying amount or fair value less cost to sell based on the held-for-sale criteria. The assets and liabilities continue to be marketed for sale and are classified as held-for-sale at December 31, 2023 based on the carrying value. The planned disposition of the PIM business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements since the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results. PIM Assets-held-for sale comprise the following as of December 31, 2023:
(In thousands) |  |
Assets: |  | December 31, 2023
Current assets |  | $ | 50,975 |
Property, Plant and Equipment, net |  | 115,920 |
Intangible assets, net |  | 76,692 |
Goodwill |  | 12,707 |
Other assets |  | 1,373 |
Total assets-held-for sale |  | $ | 257,667 |
Liabilities: |  |
Accounts payable |  | $ | 8,867 |
Accrued expenses |  | 7,662 |
Long-term liabilities |  | 1,508 |
Total liabilities-held-for sale |  | $ | 18,037 |
Income before income taxes attributable to the PIM business was $45.0 million and tax expense totaled $7.5 million for the twelve months ended December 31, 2023. Asset Held-For-Sale - Other During the fourth quarter of 2023, the Company began the process to sell a small, industrial specialty chemicals business that reports within the Materials Solutions segment. The related assets and liabilities of the business were classified as held-for-sale in the Company’s consolidated balance sheet and measured at the lower of their carrying amount or fair value less cost to sell. The proposed disposition of the business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements since the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results. Other Assets-held-for sale comprise the following as of December 31, 2023:
(In thousands) |  |
Assets: |  | December 31, 2023
Current assets |  | $ | 8,315 |
Property, Plant and Equipment, net |  | 2,454 |
Intangible assets, net |  | 10,317 |
Total assets-held-for sale |  | $ | 21,086 |
Liabilities: |  |
Accounts payable |  | $ | 711 |
Accrued expenses |  | 475 |
Total liabilities-held-for sale |  | $ | 1,186 |
Loss before income taxes attributable to the business was $45.0 million and a tax benefit of $9.2 million for the twelve months ended December 31, 2023. The loss before income taxes attributable to the business includes a goodwill impairment charge of $10.4 million and long-lived asset impairment charge of $30.5 million. Divestiture - EC Business During the second quarter of 2023, the Company announced entry into a definitive agreement to sell its EC business, which became part of the Company with the acquisition of CMC Materials, to FUJIFILM Holdings America Corporation. The EC business specializes in purification, formulation, blending, packaging and distribution of high-purity process chemicals used within the semiconductor and microelectronic manufacturing processes. The EC business was a part of what is now the Materials Solutions segment and became part of the Company with the acquisition of CMC Materials. The Company completed the divestiture of the EC business on October 2, 2023. The Company received gross cash proceeds of $737.1 million, or expected net proceeds of $675.2 million, which remains subject to customary final post-closing adjustments. The following table summarizes the fair value of the sale proceeds received in connection with the divestiture, which are subject to further final post-closing adjustment:
(In thousands) |  | October 2, 2023
Cash proceeds received, gross |  | $ | 737,100 |
Preliminary working capital adjustment |  | (5,474) |
Cash transferred to the buyer on the closing balance sheet |  | (42,845) |
Direct costs to sell |  | (13,581) |
Fair value of sale consideration |  | $ | 675,200 |
The disposition of the EC business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements since the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results. The carrying amount of net assets associated with the EC business was approximately $681.5 million. The major classes of assets and liabilities sold consisted of the following:
(In thousands) |  |
Assets: |  | October 2, 2023
Current assets |  | $ | 103,927 |
Property, Plant and Equipment, net |  | 177,397 |
Intangible assets, net |  | 263,686 |
Goodwill |  | 250,638 |
Other assets |  | 7,966 |
Total assets-held-for sale |  | $ | 803,614 |
Liabilities: |  |
Accounts payable |  | $ | 18,975 |
Accrued expenses |  | 21,141 |
Long-term liabilities |  | 81,963 |
Total liabilities-held-for sale |  | $ | 122,079 |
As a result of the EC business divestiture, the Company recognized a pre-tax loss of $8.9 million, including a $2.6 million loss reclassified from accumulated other comprehensive income for foreign currency translation and minimum pension liability, presented in selling, general and administrative expenses on the consolidated statements of operations for the twelve months ended December 31, 2023. The Company recorded an income tax benefit associated with the EC business divestiture of approximately $63.4 million. Divestiture - QED During the first quarter of 2023, the Company announced entry into a definitive agreement to sell QED Technologies International, Inc. (“QED”), which offers magnetorheological finishing polishing and subaperture stitching interferometry metrology manufacturing solutions, to Quad-C Management, Inc. QED was a part of what is now the Materials Solutions segment (the segment resulting from combining the Advanced Planarization Solutions and the Specialty Chemicals and Engineered Materials segments) and became part of the Company with the acquisition of CMC Materials. The Company completed the divestiture of QED on March 1, 2023 and received proceeds of $134.3 million after adjustments with respect to cash, working capital, indebtedness and transaction expenses. The disposition of QED did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements since the disposition did not represent a strategic shift that had a major effect on the Company’s operations and financial results. The following table summarizes the fair value of the sale proceeds received in connection with the divestiture:
(In thousands) |  | March 1, 2023
Fair value of sale consideration |  | $ | 137,500 |
Final working capital adjustment |  | 1,031 |
Cash transferred to the buyer on the closing balance sheet |  | (1,465) |
Direct costs to sell |  | (2,780) |
Fair value of sale consideration, net proceeds |  | $ | 134,286 |
The carrying amount of net assets associated with the QED business was approximately $149.2 million. The major classes of assets and liabilities sold consisted of the following:
(In thousands) |  |
Assets: |  | March 1, 2023
Current assets |  | $ | 19,219 |
Property, plant and equipment, net |  | 2,663 |
Goodwill |  | 90,005 |
Intangible assets, net |  | 48,661 |
Other assets |  | 841 |
Total assets |  | $ | 161,390 |
Liabilities: |  |
Accounts payable |  | $ | 1,340 |
Accrued expenses |  | 8,750 |
Long-term liabilities |  | 2,067 |
Total liabilities |  | $ | 12,157 |
As a result of the QED divestiture, the Company recognized a pre-tax loss of $14.9 million presented in selling, general and administrative expenses on the consolidated statements of operations for the twelve months ended December 31, 2023. The Company recorded an income tax expense associated with the QED divestiture of approximately $16.9 million. Termination - Alliance Agreement On June 5, 2023, the Company announced the termination of the Alliance Agreement (the “Alliance Agreement”) between the Company and MacDermid Enthone Inc., a global business unit of Element Solutions Inc (“MacDermid Enthone”). Under the Alliance Agreement, Entegris had been granted the exclusive right to distribute MacDermid Enthone's Viaform products, subject to certain conditions. In connection with the termination of the Alliance Agreement, Entegris received net proceeds of $191.2 million for the twelve months ended December 31, 2023. The Company recognized a pre-tax gain of $184.8 million (tax expense of $41.7 million) presented in gain on termination of the Alliance Agreement on the consolidated statements of operations for the twelve months ended December 31, 2023

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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 -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: 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 + Details
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