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Acquisitions | 12 Months Ended
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Dec. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions The Company accounts for acquisitions using the acquisition method in accordance with ASC 805, “Business Combinations,” in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition. The operating results of the acquired businesses are included in the Company’s Consolidated Financial Statements from the date of the acquisition. Dortmund Fab On June 28, 2023, the Company entered into a definitive purchase agreement to acquire a 200mm wafer fab located in Dortmund, Germany (“Dortmund Fab”) from Elmos Semiconductor SE. The acquisition of the Dortmund Fab is expected to close in early fiscal year 2025. The total purchase price for the fab is approximately 93 million Euro, of which 37.2 million Euro down payment (approximately $40.5 million) was made with cash on hand and recorded in Other long-term assets in the Consolidated Balance Sheets was paid in the third quarter after regulatory approvals and approximately 56 million Euro will be paid at closing. The transaction did not have a material impact on the Company’s fiscal year 2023 financial results and is not expected to have material impact on the Company's 2024 financial results and will be reported in the semiconductor business within the Company’s Electronics segment. Western Automation On February 3, 2023, the Company completed the acquisition of Western Automation Research and Development Limited (“Western Automation”) for approximately $162 million in cash. Headquartered in Galway, Ireland, Western Automation is a designer and manufacturer of electrical shock protection devices used across a broad range of high-growth end markets, including e-Mobility off-board charging infrastructure, industrial safety and renewables. At the time the Company and Western Automation entered into the definitive agreement, Western Automation had annualized sales of approximately $25 million. The business is reported within the Company’s Industrial segment. The acquisition was funded with cash on hand. The total purchase consideration of $158.3 million, net of cash, has been allocated to assets acquired and liabilities assumed, as of the completion of the acquisition, based on estimated fair values. The following table summarizes the final purchase price allocation of the fair value of assets acquired and liabilities assumed in the Western Automation acquisition:
(in thousands) | Purchase Price Allocation
Total purchase consideration: |
Cash, net of cash acquired | $ | 158,260 |
Allocation of consideration to assets acquired and liabilities assumed: |
Trade receivables, net | 3,359 |
Inventories | 3,678 |
Other current assets | 718 |
Property, plant, and equipment | 1,328 |
Intangible assets | 68,000 |
Goodwill | 93,937 |
Other long-term assets | 573 |
Current liabilities | (4,335) |
Other long-term liabilities | (8,998) |
| $ | 158,260 |
All Western Automation assets and liabilities were recorded in the Industrial segment and are primarily reflected in the Europe geographic area. The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining Western Automation’s products and technology with the Company’s existing Industrial products portfolio. Goodwill resulting from the Western Automation acquisition is not expected to be deductible for tax purposes. For the fiscal year ended December 30, 2023, the Company recorded measurement period adjustments to decrease accrued warranty liabilities of $0.9 million. As a result of these adjustments, goodwill was decreased by $0.9 million. Included in the Company’s Consolidated Statements of Net Income for the fiscal year ended December 30, 2023 are net sales of $13.2 million, and a loss before income taxes of $1.3 million, since the February 3, 2023 acquisition of Western Automation. For the fiscal year ended December 30, 2023, the Company incurre d $1.2 million of legal and professional fees related to the Western Automation acquisition recognized as Selling, general, and administrative expenses and reflected as other non-segment costs. C&K Switches On July 19, 2022, the Company acquired C&K Switches (“C&K”) for $540 million in cash. Founded in 1928, C&K is a leading designer and manufacturer of high-performance electromechanical switches and interconnect solutions with a strong global presence across a broad range of end markets, including industrial, transportation, datacom, and aerospace. At the time the Company and C&K entered into a definitive agreement, C&K had annualized sales of over $200 million. The business is reported as part of the electronics-passive products and sensors business within the Company's Electronics segment. The acquisition was funded through a combination of cash on hand and debt. The total purchase consideration of $523.0 million, net of cash acquired, has been allocated to assets acquired and liabilities assumed, as of the completion of the acquisition, based on estimated fair values. The following table summarizes the purchase price allocation of the fair value of assets acquired and liabilities assumed in the C&K acquisition:
(in thousands) | Purchase Price Allocation
Total purchase consideration: |
Cash, net of cash acquired | $ | 523,014 |
Allocation of consideration to assets acquired and liabilities assumed: |
Trade receivables, net | 20,967 |
Inventories | 42,968 |
Other current assets | 2,932 |
Property, plant, and equipment | 32,791 |
Intangible assets | 254,700 |
Goodwill | 274,124 |
Other long-term assets | 14,797 |
Current liabilities | (47,687) |
Long-term debt | (9,626) |
Other long-term liabilities | (62,952) |
| $ | 523,014 |
All C&K goodwill, other assets and liabilities were recorded in the Electronics segment and are reflected in the Americas, Europe and Asia-Pacific geographic areas. The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining C&K’s products and technology with the Company’s existing Electronics products portfolio. Goodwill resulting from the C&K acquisition is not expected to be deductible for tax purposes. For the fiscal year ended December 30, 2023, the Company recorded measurement period adjustments to increase other non-current liabilities of $4.2 million associated with uncertain tax positions, income taxes payable of $0.2 million, and reduce accrued liabilities of $0.3 million and deferred tax liabilities of $0.2 million. As a result of these adjustments, goodwill was increased by $3.9 million. As required by purchase accounting rules, the Company recorded a $10.8 million step-up of inventory to its fair value as of the acquisition date. The step-up was amortized as a non-cash charge to cost of sales during the third and fourth quarter of 2022 as the acquired inventory was sold and reflected as other non-segment costs. For the fiscal year ended December 31, 2022, the Company incurred $9.1 million of legal and professional fees related to the C&K acquisition recognized as Selling, general, and administrative expenses and reflected as other non-segment costs. Embed On April 12, 2022, the Company acquired Embed Ltd. (“Embed”). Founded in 2005, Embed is a proven provider of embedded software and firmware developed for a broad range of applications serving transportation end markets, primarily including commercial vehicle electronification and eMobility. The business is included in the commercial vehicle business within the Company's Transportation segment. The acquisition was funded with the Company’s cash on hand. The total purchase consideration was $9.2 million, net of cash. Carling Technologies On November 30, 2021, the Company acquired Carling Technologies, Inc. (“Carling”), pursuant to the Stock Purchase Agreement, dated as of October 19, 2021. Founded in 1920, Carling has a leading position in switching and circuit protection technologies with a strong global presence in commercial vehicle electronification, communications infrastructure and marine markets. At the time of acquisition, Carling had annualized sales of approximately $170 million. The business is headquartered in Plainville, Connecticut, with offices and facilities located around the world and is reported as part of the commercial vehicle business within our Transportation segment. The purchase price for Carling Technologies was approximately $315.5 million subject to change for a working capital adjustment. The acquisition was funded with cash on hand. The total purchase consideration of $314.1 million, net of cash, has been allocated to assets acquired and liabilities assumed, as of the completion of the acquisition, based on estimated fair values. The following table summarizes the final purchase price allocation of the fair value of assets acquired and liabilities assumed in the Carling acquisition:
(in thousands) | Purchase Price Allocation
Total purchase consideration: |
Cash, net of cash acquired | $ | 314,094 |
Allocation of consideration to assets acquired and liabilities assumed: |
Trade receivables, net | 26,232 |
Inventories | 56,479 |
Other current assets | 3,765 |
Property, plant, and equipment | 56,128 |
Intangible assets | 126,390 |
Goodwill | 98,377 |
Other long-term assets | 4,007 |
Current liabilities | (21,790) |
Other long-term liabilities | (35,494) |
| $ | 314,094 |
All Carling goodwill, other assets and liabilities were recorded in the Transportation segment and are primarily reflected in the Americas, Europe and Asia-Pacific geographic areas. The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining Carling’s products and technology with the Company’s existing commercial vehicle products portfolio. Goodwill resulting from the Carling acquisition is not expected to be deductible for tax purposes. As required by purchase accounting rules, the Company recorded a $6.4 million step-up of inventory to its fair value as of the acquisition date. The step-up was amortized as a non-cash charge to cost of goods sold during the fourth quarter of 2021 and first quarter of 2022, as the acquired inventory was sold, and is reflected as other non-segment costs. The Company recognized a non-cash charge of $4.8 million and $1.6 million to cost of goods sold during the fiscal years ended December 31, 2022 and January 1, 2022, respectively. For the fiscal year ended January 1, 2022, the Company incurred approximately $4.5 million of legal and professional fees related to the Carling acquisition recognized as Selling, general, and administrative expenses. These costs were reflected as other non-segment costs. Pro Forma Results The following table summarizes, on an unaudited pro forma basis, the combined results of operations of the Company and Western Automation as though the acquisition had occurred as of January 2, 2022, and C&K as though the acquisition had occurred as of December 27, 2020, and Carling as though the acquisitions had occurred as of December 29, 2019. The Company has not included pro forma results of operations for Embed as its operations were not material to the Company. The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the Western Automation acquisition occurred as of January 2, 2022, and had C&K acquisition occurred as of December 27, 2020 and had the Carling acquisitions occurred as of December 29, 2019 or of future consolidated operating results.
|  | For the Fiscal Year Ended
(in thousands, except per share amounts) |  | December 30, 2023 |  | December 31, 2022
Net sales |  | $ | 2,364,543 |  |  | $ | 2,665,028 |
Income before income taxes |  | 330,114 |  |  | 486,285 |
Net income |  | 260,812 |  |  | 402,470 |
Net income per share — basic |  | 10.49 |  |  | 16.27 |
Net income per share — diluted |  | 10.39 |  |  | 16.11 |
Pro forma results presented above primarily reflect the following adjustments:
|  | For the Fiscal Year Ended
(in thousands) |  | December 30, 2023 |  | December 31, 2022 |  |
Amortization (a) |  | $ | (479) |  |  | $ | (10,388) |  |  |
Depreciation |  | — |  |  | 1,979 |  |  |
Transaction costs (b) |  | 1,203 |  |  | 7,905 |  |  |
Amortization of inventory step-up (c) |  | — |  |  | 15,593 |  |  |
Interest expense (d) |  | — |  |  | 815 |  |  |
Income tax (expense) benefit of above items |  | (91) |  |  | (4,701) |  |  |
(a)The amortization adjustment for the twelve months ended December 30, 2023 and December 31, 2022, primarily reflects incremental amortization resulting from the measurement of intangibles at their fair values. (b)The transaction cost adjustments reflect the reversal of certain legal and professional fees from the twelve months ended December 30, 2023 and December 31, 2022, respectively, and recognition of those fees during the twelve months ended December 31, 2022. (c)The amortization of inventory step-up adjustment reflects the reversal of the amount recognized during the twelve months ended December 31, 2022. The inventory step-up is amortized over four months for all acquisitions, as the inventory was sold. (d)The interest expense adjustment reflects lower interest expense associated with the financing of the C&K acquisition that replaced higher pre-acquisition debt.

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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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