On June 20, 2023, we acquired the Emtek and Schaub premium and luxury door and cabinet hardware business, and the U.S. and Canadian Yale and August residential smart home locks business (collectively the "ASSA Businesses") from ASSA ABLOY, Inc. ("ASSA"). The Company completed the acquisition for a total purchase price of approximately $800 million, subject to post-closing adjustments. We financed the transaction with cash on hand. As of the date of this filing, legal title to international operations in Vietnam has not yet transferred, but we expect a deferred closing, which will include a payment of approximately $24 million (which amount is already included in the overall purchase price but for which the cash payment has not yet been made), shortly following receipt of local regulatory approval, which is expected to occur later in 2023. The results of Emtek and Schaub premium and luxury door and cabinet hardware business are reported as part of the Water segment and the results of the U.S. and Canadian Yale and August residential smart lock business are reported as part of the Security segment. The financial results of the ASSA Businesses were included in the Company’s consolidated balance sheet as of July 1, 2023. The results of operations and cash flows of the ASSA Businesses from the date of acquisition to July 1, 2023 were not material to the Company.

The following table summarizes the preliminary allocation of the ASSA Businesses purchase price to the fair value of assets acquired and liabilities assumed as of the date of the acquisition.


(In millions)
Accounts receivable	$	32.3
Inventories		109.7
Property, plant and equipment		18.6
Goodwill		261.8
Identifiable intangible assets		439.4
Operating lease assets		6.8
Other assets		2.4
Total assets		871.0
Accounts payable		28.7
Other current liabilities and accruals		33.4
Other non-current liabilities		3.7
Net assets acquired(a)	$	805.2

(a) Net assets exclude $16.0 million of cash transferred to the Company as the result of the acquisition.

The purchase price allocation is expected to change after asset and liability valuations are finalized. We apply significant judgment in determining the estimates and assumptions used to determine the fair value of the identifiable intangible assets, including forecasted revenue growth rates, EBITDA margins, percentage of revenue attributable to the tradename, contributory asset charges, customer attrition rate, market-participant discount rates and the assumed royalty rates. The Company is in the process of finalizing valuations of certain tangible and intangible assets, including property, plant and equipment. The provisional measurement of property, plant and equipment and goodwill is subject to change. Any change in the acquisition date fair value of the acquired assets and liabilities will change the amount of the purchase price allocable to goodwill.

Goodwill includes expected sales and cost synergies. The goodwill is included in our Security and Water segments. Substantially all of the goodwill is expected to be deductible for income tax purposes, subject to the finalization of the purchase price allocation. ASSA Businesses identifiable intangible assets consist of finite-lived customer relationship assets of $336.6 million, indefinite-lived tradenames of $74.9 million, definite-lived tradenames of $16.8 million and finite-lived proprietary technology assets of $11.1 million. We will finalize our determination of useful lives and amortization methodology when the asset valuations are completed.

The following unaudited pro forma summary presents consolidated financial information as if the ASSA Businesses had been acquired on January 1, 2022. The unaudited pro forma financial information is based on historical results of operations and financial position of the Company and the ASSA Businesses. The pro forma results include:

The unaudited pro forma financial information does not necessarily represent the results that would have occurred had the acquisition occurred on January 1, 2022. In addition, the unaudited pro forma information should not be deemed to be indicative of future results.


(In millions)	Twenty-Six Weeks Ended July 1, 2023		Six Months Ended June 30, 2022		Thirteen Weeks Ended July 1, 2023		Three Months Ended June 30, 2022
Net sales	$	2,403.7	$	2,599.1	$	1,259.6	$	1,356.4
Income from continuing operations, net of tax	$	218.1	$	275.6	$	120.7	$	154.1

On December 14, 2022, the Company completed the separation of its Cabinets business, MasterBrand, Inc. (“MasterBrand”), via a tax-free spin-off transaction (the “Separation”) to create an independent, publicly-traded company. Immediately following completion of the Separation, the Company changed its name from “Fortune Brands Home & Security, Inc.” to “Fortune Brands Innovations,

Inc.” and its stock ticker changed from “FBHS” to “FBIN” to better reflect its focus on activities related to core brands and innovation.

The condensed consolidated statements of income and consolidated balance sheets for all prior periods have been adjusted to reflect the presentation of MasterBrand as discontinued operations. For the six months ended June 30, 2022, the condensed consolidated statement of cash flows includes net cash provided from operations related to discontinued operations of $128.3 million and net cash in investing activities of $22.0 million. Depreciation, amortization and capital expenditures attributable to discontinued operations for the six months ended June 30, 2022, were $21.5 million, $8.9 million and $22.0 million, respectively.

In July 2022, we acquired 100% of the outstanding equity of Aqualisa Holdings (International) Ltd. (“Aqualisa”), a leading U.K. manufacturer of shower products known for premium, innovative and smart digital shower systems, for a purchase price of $156.0 million, net of cash acquired of $4.8 million. We financed the transaction using cash on hand and borrowings under our revolving credit facility. The results of Aqualisa are reported as part of the Water segment. We have not included pro forma financial information as the transaction is immaterial to our condensed consolidated statements of comprehensive income. The fair value allocated to assets acquired and liabilities assumed as of July 29, 2022, was $156.0 million, which includes $88.7 million of goodwill. Goodwill includes expected sales and cost synergies and is not expected to be deductible for income tax purposes.

In January 2022, we acquired 100% of the outstanding equity of Solar for a purchase price of $61.6 million, net of cash acquired of $4.8 million. We financed the transaction using cash on hand and borrowings under our revolving credit facility. The results of Solar are reported as part of the Outdoors segment. We have not included pro forma financial information as the transaction is immaterial to our condensed consolidated statements of comprehensive income. The fair value allocated to assets acquired and liabilities assumed as of January 31, 2022, was $61.6 million, which includes $23.3 million of goodwill. Goodwill includes expected sales and cost synergies and is expected to be deductible for income tax purposes.

In 2018, our Water segment entered into a strategic partnership with, and acquired non-controlling equity interests in, Flo Technologies, Inc. (“Flo”), a U.S. manufacturer of comprehensive water monitoring and shut-off systems with leak detection technologies. In January 2020, we entered into an agreement to acquire the remaining outstanding shares of Flo in a multi-phase transaction. As part of this agreement, we acquired a majority of Flo’s outstanding shares during 2020 and entered into a forward contract to purchase all remaining shares of Flo during the first quarter of 2022. On January 30, 2022, we made a final cash payment of $16.7 million to the legacy minority shareholders to acquire such shares which is reflected within Other financing, net in our consolidated statements of cash flows.