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ACQUISITIONS, DISCONTINUED OPERATIONS AND FORMATION OF SHANGHAI ELECTRIC JV | 3 Months Ended
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Mar. 30, 2013
ACQUISITIONS, DISCONTINUED OPERATIONS AND FORMATION OF SHANGHAI ELECTRIC JV |
ACQUISITIONS, DISCONTINUED OPERATIONS AND FORMATION OF SHANGHAI ELECTRIC JV | (3) ACQUISITIONS, DISCONTINUED OPERATIONS AND FORMATION OF SHANGHAI ELECTRIC JV Acquisitions On March 21, 2012, our Flow Technology reportable segment completed the acquisition of Seital S.r.l. (“Seital”), a supplier of disk centrifuges (separators and clarifiers) to the global food and beverage, biotechnology, pharmaceutical and chemical industries, for a purchase price of $28.8, net of cash acquired of $2.5 and including debt assumed of $0.8. Seital had revenues of approximately $14.0 in the twelve months prior to the date of acquisition. On December 22, 2011, our Flow Technology reportable segment completed the acquisition of Clyde Union, a global supplier of pump technologies utilized in oil and gas processing, power generation and other industrial applications for an initial payment of 500.0 British Pounds (“GBP”), less debt assumed and other adjustments of GBP 11.0. In addition, the purchase price includes a potential earn-out payment (equal to Annual 2012 Group EBITDA (as defined by the related agreement) × 10, less GBP 475.0). In no event shall the earn-out payment be less than GBP 0.0 or more than GBP 250.0. Although we are still in the process of completing the earn-out procedure set forth in the purchase agreement, no liability for an earn-out payment has been provided in the accompanying balance sheets because, based on actual operating results for 2012, we do not believe Clyde Union achieved the required minimum Annual 2012 Group EBITDA. Discontinued Operations As part of our operating strategy, we regularly review potential divestitures, some of which are or may be material. We report businesses or asset groups as discontinued operations when, among other things, we terminate the operations of the business or asset group, or we commit to a plan to divest the business or asset group, actively begin marketing the business or asset group, and when the sale of the business or asset group is deemed probable within the next twelve months. The following businesses met these requirements, and therefore have been reported as discontinued operations for the periods presented.
Business |  | Quarter Discontinued |  | Quarter of Sale or Termination of Operations |
SPX Kayex (“Kayex”) |  | Q1 2013 |  | Q1 2013 |
TPS Tianyu Equipment Co., Ltd. (“Tianyu”) |  | Q4 2012 |  | Q4 2012 |
Weil-McLain (Shandong) Cast-Iron-Boiler Co., Ltd. (“Weil-McLain Shandong”) |  | Q4 2012 |  | Q4 2012 |
SPX Service Solutions (“Service Solutions”) |  | Q1 2012 |  | Q4 2012 |
Kayex — We closed the business during the first quarter of 2013. In connection with the closure, we recorded a loss, net of taxes, of $2.1 to “Loss on disposition of discontinued operations, net of tax” during the first quarter of 2013, with such loss associated primarily with severance costs and asset impairment charges. Tianyu — Sold for cash consideration of one Chinese Yuan (“CNY”) (exclusive of cash transferred with the business of $1.1), resulting in a loss, net of taxes, during the fourth quarter of 2012 of $1.8. Weil-McLain Shandong — Sold for cash consideration of $2.7 (exclusive of cash transferred with the business of $3.1), resulting in a gain, net of taxes, during the fourth quarter of 2012 of $2.2. During the first quarter of 2013, we reduced the net gain by $0.4 associated with the working capital settlement. Service Solutions — Sold for cash consideration of $1,134.9, resulting in a gain, net of taxes, during the fourth quarter of 2012 of $313.4. During the first quarter of 2013, we reduced the net gain by $1.3 associated primarily with revisions to the income tax liabilities related to the sale. In addition to the businesses discussed above, we recognized net losses of $1.4 and $0.3 during the three months ended March 30, 2013 and March 31, 2012, respectively, resulting from adjustments to gains/losses on sales of previously discontinued businesses. Refer to the consolidated financial statements contained in our 2012 Annual Report on Form 10-K for the disclosure of all discontinued businesses during the 2010 through 2012 period. The final sales price for certain of the divested businesses is subject to adjustment based on working capital existing at the respective closing dates. The working capital figures are subject to agreement with the buyers or, if we cannot come to agreement with the buyers, an arbitration or other dispute-resolution process. Final agreement of the working capital figures with the buyers for certain of these transactions has yet to occur. In addition, changes in estimates associated with liabilities retained in connection with a business divestiture (e.g., income taxes) may occur. It is possible that the sales price and resulting gains/losses on these and other previous divestitures may be materially adjusted in subsequent periods. For the first three months of 2013 and 2012, income (loss) from discontinued operations and the related income taxes were as follows:
|  | Three months ended |
|  | March 30, |  | March 31, |
|  | 2013 |  | 2012 |
Income (loss) from discontinued operations |  | $ | (6.0 | ) | $ | 7.0 |
Income tax provision |  | (1.4 | ) | (2.5 | )
Income (loss) from discontinued operations, net of tax |  | $ | (7.4 | ) | $ | 4.5 |
For the first three months of 2013 and 2012, results of operations for our businesses reported as discontinued operations were as follows:
|  | Three months ended |
|  | March 30, |  | March 31, |
|  | 2013 |  | 2012 |
Revenues |  | $ | 4.2 |  | $ | 237.9 |
Pre-tax income (loss) |  | (3.5 | ) | 7.5 |
Formation of Shanghai Electric JV On December 30, 2011, we and Shanghai Electric Group Co., Ltd. established the Shanghai Electric JV, a joint venture supplying dry cooling and moisture separator reheater products and services to the power sector in China and other selected regions of the world. We contributed and sold certain assets of our dry cooling products business in China to the joint venture in consideration for a 45% ownership interest in the joint venture and cash payments of CNY 96.7, with CNY 51.5 received in January 2012, CNY 25.8 received in December 2012, and the remaining CNY payment contingent upon the joint venture achieving defined sales order volumes. Final approval for the transaction was not received until January 13, 2012. We determined that this transaction met the deconsolidation criteria of the Codification, and, thus, recorded a gain for the transaction equal to the estimated fair value of our investment in the joint venture plus any consideration received, less the carrying value of assets contributed and sold to the joint venture. We recorded the net gain associated with this transaction of $20.5 in the first quarter of 2012, with such gain included in “Other income, net.”

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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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