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Acquisitions and Dispositions | 3 Months Ended
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Jun. 30, 2024
Acquisitions and Dispositions [Abstract] |
Acquisitions and Dispositions | Note 2: Acquisitions and Dispositions Acquisition of Scott Springfield Mfg. Inc. On March 1, 2024, the Company acquired all of the issued and outstanding shares in the capital of Scott Springfield Mfg. Inc. (“Scott Springfield Manufacturing”) for consideration totaling $184.1 million. In July 2024 and upon finalization of the working capital adjustment, the Company paid $2.4 million to the seller. Based in Calgary, Canada, Scott Springfield Manufacturing is a leading manufacturer of air handling units to customers in the data center, telecommunications, healthcare, and aerospace markets. This acquisition expanded the Company’s product offerings and customer base in the high-growth data center and indoor air quality markets in the U.S. and Canada. Since the date of the acquisition, the Company has reported the financial results of the Scott Springfield Manufacturing business within the Climate Solutions segment. For the three months ended June 30, 2024, the Company included $39.7 million of net sales and $6.5 million of operating income within its consolidated statement of operations attributable to Scott Springfield Manufacturing. The $6.5 million of operating income for the first quarter of fiscal 2025 included a $1.6 million charge to cost of sales, recorded at Corporate, related to an inventory purchase accounting adjustment. The Company has preliminarily allocated the purchase price of Scott Springfield Manufacturing to the identifiable tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values as of the acquisition date. During the first quarter of fiscal 2025, the Company completed its market and trade name analyses and reduced the preliminary fair value of the trade name intangible asset by $9.6 million. This measurement period adjustment resulted in a corresponding decrease in the deferred income tax liability of $2.2 million and an increase in goodwill of $7.4 million. The preliminary purchase price allocation, as of June 30, 2024, was as follows:
Cash and cash equivalents |  | $ | 0.3 |
Trade accounts receivable |  |  | 27.5 |
Inventories |  |  | 20.9 |
Property, plant and equipment |  |  | 6.0 |
Intangible assets |  |  | 92.7 |
Goodwill |  |  | 72.6 |
Other assets |  |  | 4.0 |
Accounts payable |  |  | (8.6 | )
Accrued compensation and employee benefits |  |  | (1.3 | )
Deferred income taxes |  |  | (22.2 | )
Other liabilities |  |  | (7.8 | )
Purchase price |  | $ | 184.1 |
At the time the June 30, 2024 financial statements were finalized, the Company was continuing its review of the fair value estimates for certain assets acquired, including intangible assets, and liabilities assumed. As part of its purchase accounting and integration activities, the Company is in the process of assessing, refining and harmonizing the internal controls and accounting processes of the acquired business with those of the Company. As part of this process, the Company is continuing to review the appropriateness of accruals and reserves, including those related to accounts receivable, inventory, and product warranties. As such, the allocation of purchase price above is considered preliminary. The Company expects to complete its accounting for the acquisition of Scott Springfield Manufacturing during the second quarter of fiscal 2025. The following unaudited supplemental pro forma information presents the Company’s consolidated results of operations as though the acquisition of Scott Springfield Manufacturing had occurred at the beginning of fiscal 2023. This pro forma financial information is presented for illustrative purposes only and is not considered to be indicative of the operating results that would have been achieved had the acquisition been completed as of the date indicated or the operating results that may be obtained in the future.
|  | Three months ended June 30, 2023 |
Net sales |  | $ | 651.7 |
Net earnings attributable to Modine |  |  | 44.5 |
The supplemental pro forma financial information above is based upon the Company’s historical results and the historical results of Scott Springfield Manufacturing, which have been translated from Canadian dollars to U.S. dollars using the historical average foreign exchange rates. The pro forma information for the first quarter of fiscal 2024 includes adjustments for: (i) amortization and depreciation expense totaling $3.0 million for acquired tangible and intangible assets, (ii) estimated interest expense of $1.5 million resulting from acquisition-related borrowings, and (iii) the estimated income tax impacts related to the pro forma adjustments, considering the statutory tax rates within Canada. The pro forma financial information does not reflect any expected revenue or cost synergies. Acquisition of Napps Technology Corporation On July 1, 2023, the Company acquired substantially all of the net operating assets of Napps Technology Corporation (“Napps”), a Texas-based manufacturer of air- and water-cooled chillers, condensing units and heat pumps, for consideration totaling $5.8 million. The Company paid $4.8 million during the second quarter of fiscal 2024 and paid the remaining $1.0 million to the seller in July 2024. The Company has reported the financial results of the Napps business within the Climate Solutions segment since the date of the acquisition. For the first quarter of fiscal 2025, the Company included $1.4 million of net sales within its consolidated statement of operations attributable to Napps. Disposition of Germany automotive businesses In October 2023, the Company sold three automotive businesses based in Germany (the “disposal group”) to affiliates of Regent, L.P. Prior to the disposition, the Company reported the financial results of the disposal group within its Performance Technologies segment. Net sales of the disposal group included within the Company’s consolidated statement of operations for the first quarter of fiscal 2024 totaled $24.3 million.

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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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