Acquisition of Kongsberg ICS

9 Months Ended

Oct. 01, 2022

Business Combination and Asset Acquisition [Abstract]

On February 28, 2022, the Company completed the acquisition of substantially all of Kongsberg Automotive's Interior Comfort Systems business unit ("Kongsberg ICS"). Kongsberg ICS specializes in comfort seating solutions, including massage, lumbar, seat heat and ventilation, with annual sales of approximately $300 million, of which approximately 20% are intercompany.

The acquisition of Kongsberg ICS was accounted for as a business combination, and accordingly, the assets acquired and liabilities assumed are included in the accompanying condensed consolidated balance sheet as of October 1, 2022. The operating results and cash flows of Kongsberg ICS are included in the condensed consolidated financial statements from the date of acquisition in the Company's Seating segment.

The preliminary purchase price and related allocation are shown below (in millions):


	July 2, 2022		Adjustments		October 1, 2022
Preliminary purchase price, net of acquired cash (1)	$	187.8	$	0.8	$	188.6

Property, plant and equipment	121.8		2.3		124.1
Other assets purchased and liabilities assumed, net	27.5		(2.3)		25.2
Goodwill	27.4		0.8		28.2
Intangible assets	11.1		—		11.1
Preliminary purchase price allocation	$	187.8	$	0.8	$	188.6

(1) Preliminary purchase price reflects cash paid of $184.2 million plus amounts due to seller of $4.4 million

Goodwill recognized in this transaction is primarily attributable to the assembled workforce and expected synergies related to future growth.

Intangible assets consist of amounts recognized for the fair value of developed technology based on an independent appraisal. It is currently estimated that the developed technology will have a weighted average useful life of approximately seventeen years.

The purchase price and related allocation are preliminary and may be revised as a result of further adjustments made to the purchase price, additional information obtained regarding liabilities assumed, including, but not limited to, certain tax attributes and contingent liabilities, and revisions of provisional estimates of fair values resulting from the completion of independent appraisals and valuations of property, plant and equipment and intangible assets.

The Company incurred transaction costs of $9.6 million in the nine months ended October 1, 2022, which have been expensed as incurred and are recorded in selling, general and administrative expenses.

The pro-forma effects of this acquisition do not materially impact the Company's reported results for any period presented.

For further information related to acquired assets measured at fair value, see Note 19, "Financial Instruments."