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Sale of Business | 9 Months Ended
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Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract] |
Sale of Business | Latin America Divestiture On June 25, 2020, we closed on the sale of five subsidiaries comprising our manufacturing and sales operations in Latin America to buyers led by Instalación Profesional y Tecnologías del Centro S.A. de C.V., a Mexican company doing business as Accell in Brazil (Accell), through the execution of various definitive stock purchase agreements. The sale of these Latin America-based operations is part of our continued strategy to improve profitability and focus on growing our Networked Solutions and Outcomes businesses in Latin America and throughout the world. We retained the intellectual property rights to our products sold in Latin America. As part of the transaction, we entered into an intellectual property license agreement whereby Accell pays a royalty on certain products manufactured by Accell using licensed Company intellectual property. In addition, Accell serves as the exclusive distributor for our Device Solutions, Networked Solutions, and Outcomes products and services offerings in Latin America. Based on the sales price and the net assets of the five subsidiaries sold, we recognized a total loss of $57.3 million in the second and third quarters of 2020. The loss was primarily due to the recognition of $52.1 million in foreign currency translation losses accumulated since the acquisition of these subsidiaries in 2006 and 2007, and allocated goodwill of $3.0 million. Accell assumed all recognized liabilities, as well as all future liabilities, of the subsidiaries. We have provided no indemnification for any future losses that may be incurred. Following the close of the transaction, the terms of the agreement allow for adjustments to the $21.9 million working capital amount. Of the total sales price, $2.5 million was received at closing, and the majority of the remaining portion is due by December 31, 2020. Included in the net assets sold was $6.1 million in cash. This resulted in net outflow of cash at closing of $3.6 million. During the quarter ended September 30, 2020, we received $2.9 million of payments for the purchase price evidenced by a promissory note. The loss on sale of business was calculated as follows:
In thousands | Loss on sale of business
Sales price | $ | 35,008 |
Net assets sold (including working capital) | (36,198) |
Currency translation adjustment loss | (52,074) |
Goodwill allocated | (3,000) |
Legal fees | (1,031) |
Total loss on sale of business | $ | (57,295) |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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