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ACQUISITION, DISCONTINUED OPERATIONS AND FORMATION OF SHANGHAI ELECTRIC JV | 9 Months Ended
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Sep. 28, 2013
ACQUISITION, DISCONTINUED OPERATIONS AND FORMATION OF SHANGHAI ELECTRIC JV |
ACQUISITION, DISCONTINUED OPERATIONS AND FORMATION OF SHANGHAI ELECTRIC JV | (3) ACQUISITION, DISCONTINUED OPERATIONS AND FORMATION OF SHANGHAI ELECTRIC JV Acquisition 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. Discontinued Operations As part of our operating strategy, we regularly review and negotiate 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. During the third quarter of 2013, we committed to a plan to divest certain non-strategic businesses which were previously reported within Industrial Products and Services and Other. These businesses have been reported, for all periods presented, as discontinued operations within the accompanying condensed consolidated financial statements. We are actively pursuing the sale of these businesses and anticipate that the sales will be completed during the next twelve months. The following businesses were discontinued in a prior quarter:
Business |  | Quarter Discontinued |  | Quarter of Sale or Termination of Operations |
Broadcast Antenna System business (“Dielectric”) |  | Q2 2013 |  | Q2 2013 |
Crystal Growing business (“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 |
Dielectric — We sold assets of the business during the second quarter of 2013 for cash consideration of $4.7, resulting in a gain of less than $0.1. 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 during that quarter, with the loss associated primarily with severance costs and asset impairment charges. During the third quarter of 2013, we recorded a gain, net of taxes, of $3.6 associated primarily with the sale of a perpetual license related to certain of the business’s intangible assets. Proceeds related to the above sales transaction totaled $6.9. 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. During the second quarter of 2013, we received $1.1 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 three and nine months ended September 28, 2013, we reduced the net gain by $3.1 and $1.5, respectively, associated primarily with the working capital settlement and revisions to income tax and other retained liabilities related to the sale. During the third quarter of 2013, we received $0.8 associated with the working capital settlement. In addition to the businesses discussed above, we recognized net losses of $0.3 and $1.9 during the three and nine months ended September 28, 2013, respectively, and net losses of $0.7 and $1.6 during the three and nine months ended September 29, 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 periods. 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 three and nine months ended September 28, 2013 and September 29, 2012, income from discontinued operations and the related income taxes are shown below:
|  | Three months ended |  | Nine months ended |
|  | September 28, |  | September 29, |  | September 28, |  | September 29, |
|  | 2013 |  | 2012 |  | 2013 |  | 2012 |
Income from discontinued operations |  | $ | 8.7 |  | $ | 17.7 |  | $ | 12.2 |  | $ | 57.7 |
Income tax provision |  | (3.6 | ) | (6.0 | ) | (4.3 | ) | (19.7 | )
Income from discontinued operations, net |  | $ | 5.1 |  | $ | 11.7 |  | $ | 7.9 |  | $ | 38.0 |
For the three and nine months ended September 28, 2013 and September 29, 2012, results of operations for our businesses reported as discontinued operations were as follows:
|  | Three months ended |  | Nine months ended |
|  | September 28, |  | September 29, |  | September 28, |  | September 29, |
|  | 2013 |  | 2012 |  | 2013 |  | 2012 |
Revenues |  | $ | 50.7 |  | $ | 269.6 |  | $ | 154.2 |  | $ | 877.8 |
Pre-tax income |  | 8.3 |  | 18.8 |  | 15.0 |  | 60.5 |
The major classes of assets and liabilities, excluding intercompany balances, of the businesses reported as discontinued operations included in the accompanying condensed consolidated balance sheets are shown below:
|  | September 28, |  | December 31, |
|  | 2013 |  | 2012 |
Assets: |  |  |  |  |
Accounts receivable, net |  | $ | 28.4 |  | $ | 21.2 |
Inventories, net |  | 40.9 |  | 32.7 |
Other current assets |  | 1.1 |  | 1.2 |
Property, plant and equipment, net |  | 16.8 |  | 16.2 |
Goodwill and intangibles, net |  | 70.6 |  | 71.3 |
Assets of discontinued operations |  | $ | 157.8 |  | $ | 142.6 |
Liabilities: |  |  |  |  |
Accounts payable |  | $ | 17.1 |  | $ | 18.3 |
Accrued expenses |  | 14.4 |  | 16.6 |
Liabilities of discontinued operations |  | $ | 31.5 |  | $ | 34.9 |
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 19.4 received in July 2013. 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 on 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 the gain included in “Other income (expense), 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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