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Business Acquisitions | 12 Months Ended
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Dec. 31, 2016
Business Acquisitions |
Business Acquisitions | (5) Business Acquisitions PVI Industries, LLC On November 2, 2016, the Company acquired 100% of the shares of PVI. The aggregate purchase price recorded, including an estimated working capital adjustment, was approximately $79.2 million, and is subject to final post-closing working capital adjustments. PVI is a leading manufacturer of commercial stainless steel water heating equipment, focused on the high capacity market in North America and is based in Fort Worth, Texas. PVI’s water heater product offering complements AERCO’s boiler products, allowing the Company to address customers’ heating and hot water requirements. The results of operations for PVI are included in the Company’s Americas segment since the date of acquisition. The Company has determined that both the pro-forma and actual results, including PVI’s net sales, net income, and earnings per share, are not material to the Company’s financial results, and therefore has not included these disclosures. The Company accounted for the transaction as a purchased business combination and the acquisition was funded partially with available cash and partially from borrowings under the Company’s Credit Agreement. The Company completed a preliminary purchase price allocation that resulted in the recognition of $39.1 million in goodwill and $31.0 million in intangible assets. The intangible assets acquired consist of customer relationships valued at $17.6 million with estimated lives of 15 years, developed technology valued at $10.2 million with estimated lives of 10 years, and the trade name valued at $3.2 million, with estimated lives of 20 years. The goodwill is attributable to the workforce of PVI and the strategic platform adjacency that will allow Watts to extend its product offerings as a result of the acquisition. Approximately $6.9 million of the goodwill is deductible for tax purposes. The following table summarizes the value of the assets and liabilities acquired (in millions):
Accounts receivable |  | $ | 5.8 |
Inventory |  |  | 12.9 |
Fixed assets |  |  | 8.5 |
Deferred tax assets |  |  | 1.3 |
Other assets |  |  | 1.4 |
Intangible assets |  |  | 31.0 |
Goodwill |  |  | 39.1 |
Accounts payable |  |  | (2.7) |
Accrued expenses and other |  |  | (8.5) |
Deferred tax liability |  |  | (9.6) |
Purchase price |  | $ | 79.2 |
AERCO KOREA On February 26, 2016, the Company acquired an additional 50% of the outstanding shares of AERCO Korea for an aggregate purchase price of approximately $4 million. Prior to February 26, 2016, the Company held a 40% interest in AERCO Korea, which operated as a joint venture. The Company acquired the remaining 10% ownership in the fourth quarter of 2016 and now owns 100% of AERCO Korea. AERCO Korea strengthens Watts’ strategic vision to expand solutions sales into the Korean market. The Company accounted for the transaction as a step acquisition within a business combination. The Company recognized a $1.7 million pre-tax gain on the previously held 40% ownership interest in the first quarter of 2016. The Company completed a valuation of the assets and liabilities acquired that resulted in the recognition of $3.3 million in goodwill, $1.6 million in intangible assets and $0.8 million as the estimate of the acquisition date fair value on commitment to purchase the remaining 10% ownership by December 31, 2017. The intangible assets acquired consisted entirely of customer relationships. The amortization period of these customer relationships is 10 years. The goodwill is not deductible for tax purposes. The balance sheet and results of operations for AERCO Korea are included in the Company’s Asia‑Pacific segment since acquisition date. The results of AERCO Korea are not material to the Company’s consolidated financial statements. APEX On November 30, 2015, the Company completed the acquisition of 80% of the outstanding shares of Apex. Apex specializes in the design and manufacturing of control valves for low and high pressure hot water and filtration systems. Apex also produces an extensive range of float and reservoir valves for the agricultural industry. The aggregate purchase price was approximately $20.4 million and the Company recorded a long-term liability of $5.5 million as the estimate of the acquisition date fair value on the contractual call option to purchase the remaining 20% within three years of closing. The Company accounted for the transaction as a business combination. The Company completed a purchase price allocation that resulted in the recognition of $12.9 million in goodwill and $10.1 million in intangible assets. Intangible assets consist primarily of customer relationships with an estimated life of 10 years and a trade name with an estimated life of 15 years. The goodwill is not deductible for tax purposes. The results of operations for Apex are included in the Company’s Asia-Pacific segment since acquisition date. The results of Apex are not material to the Company’s consolidated financial statements.

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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 No definition available. + Details
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