ACQUISITIONS

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

HSO Acquisition

On January 26, 2022, the Company completed the HSO Acquisition for approximately $23 million, net of cash. HSO is a multi-national developer of technology and chemistry for decorative and functional surface finishing with a focus on environmentally sustainable products, especially in the field of plating on plastics. HSO is included in the Company's Industrial Solutions business within its Industrial & Specialty segment and was not material to the Consolidated Financial Statements. In connection with this acquisition, the Company recorded approximately $11.7 million of finite-lived intangible assets, primarily customer relationships.

Coventya Acquisition

On September 1, 2021, the Company completed the Coventya Acquisition for $486 million, net of cash. Coventya is a global provider of specialty chemicals for the surface finishing industry which complements the Company's industrial portfolio. Coventya is included in the Company's Industrial Solutions business within its Industrial & Specialty segment.

HKW Acquisition

On May 5, 2021, the Company completed the HKW Acquisition for $50.9 million, net of cash. HKW specializes in conformal coatings, encapsulation resins, thermal interface materials, contact lubricants and cleaning chemistry which complements the Company's broader electronics portfolio with many applications overlapping with its semiconductor technologies. HKW is included in the Company's Semiconductor Solutions business within its Electronics segment.

The following table summarizes the allocation of the purchase price of the Coventya and HKW Acquisitions (together, the "Acquisitions") to the identified assets acquired and liabilities assumed at the respective acquisition dates:


(dollars in millions)	Coventya		HKW
Identifiable assets acquired and liabilities assumed
Accounts receivable	$	44.4	$	10.1
Inventories	37.7		11.2
Other current assets	10.9		2.4
Property, plant and equipment	29.8		6.2
Identifiable intangible assets	213.4		28.7
Other assets	18.3		3.4
Current liabilities	(43.0)		(21.6)
Deferred income taxes	(61.3)		(7.2)
Other long-term liabilities	(15.0)		(3.2)
Non-controlling interests	(39.6)		—
Total identifiable net assets	195.6		30.0
Goodwill	290.0		20.9
Total purchase price	$	485.6	$	50.9

The purchase price allocation for the Acquisitions was finalized in 2022 resulting in immaterial adjustments to the preliminary allocation disclosed above.

The excess of the cost of the Acquisitions over the net amounts assigned to the fair value of the assets acquired and the liabilities assumed was recorded as goodwill and represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. Substantially all of the goodwill recorded in connection with the Acquisitions is not deductible for tax purposes.

The fair value of the identifiable intangible assets recorded in conjunction with the Acquisitions was as follows:


	Coventya			HKW
(dollars in millions)	Fair Value		Weighted Average Useful Life (years)	Fair Value		Weighted Average Useful Life (years)
Customer relationships	$	145.0	12	$	20.8	12
Trade name	8.4		10	1.0		5
Developed technology	60.0		10	6.9		5
Total	$	213.4	11.4	$	28.7	10.1

The fair value of the identifiable intangible assets was determined primarily using the “income approach,” which requires a forecast of all of the expected future cash flows using either the multi-period excess earnings method or the relief-from-royalty method. Some of the more significant assumptions inherent in the development of intangible asset values include the amount and timing of projected future cash flows, the customer attrition rate and the discount rate selected to measure the risks inherent in the future cash flows.

The deferred income taxes reflect the tax effect of the differences between the carry-over tax basis and the fair value recorded in purchase accounting that are primarily associated with the recognition of identifiable intangible assets.

In connection with the Coventya Acquisition, the Company recorded $39.6 million of non-controlling interests in four entities. The most significant non-controlling interest represents 19.7% of a publicly traded entity in Turkey with a fair value of $32.4 million, which was determined based on the closing market price of this entity's stock on the acquisition date. Net income attributable to non-controlling interests is not material.

The Acquisitions were not significant to the Company's Consolidated Financial Statements and, therefore, pro forma and post acquisition results of operations have not been presented.