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Divestitures and Acquisitions | 12 Months Ended
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Dec. 31, 2016
Business Combinations [Abstract] |
Divestitures and Acquisitions | Note 3 Divestitures and Acquisitions Divestitures Sale of North American foam trays and absorbent pads business On April 1, 2015, we completed the sale of our North American foam trays and absorbent pads business to NOVIPAX, a portfolio company of Atlas Holdings LLC, for net proceeds of $75.6 million, net of certain purchase price adjustments of $5.9 million and subject to final purchase price adjustment. After transaction costs of $7.0 million, we recorded a $26.5 million pre-tax gain on sale of business, which is included in (Loss) gain on sale of business, net in the Consolidated Statement of Operations for the year ended December 31, 2015. Subsequent to December 31, 2015, we recorded an additional pre-tax loss on the sale of business primarily due to additional transaction costs of $0.2 million. This resulted in cumulative transaction costs of $7.2 million. This resulted in a cumulative pre-tax gain of $26.3 million on the sale of business. The decision to sell this business was consistent with the Company's overall strategy to focus on innovation and differentiation in its portfolio of products within the flexible packaging industry. The sale included our manufacturing facilities in Paxinos and Reading, PA, Indianapolis, IN, Rockingham, NC, and Grenada, MS . The North American foam trays and absorbent pads business was part of the Company’s Food Care division. The disposal of the North American foam trays and absorbent pads business did not qualify as a discontinued operation. The carrying amounts of assets and liabilities at disposition on April 1, 2015 are excluded from our Consolidated Balance Sheet as of December 31, 2015. The carrying value of the major classes of assets and liabilities for the business at the date of disposition were as follows:
|  | April 1, |
(In millions) |  | 2015 |
Assets: |  |  |  |
Inventories |  | $ | 15.2 |
Prepaid expenses |  |  | 0.1 |
Property and equipment, net |  |  | 22.6 |
Goodwill |  |  | 6.9 |
Assets |  | $ | 44.8 |
Liabilities: |  |  |  |
Accrued liabilities |  |  | 2.7 |
Liabilities |  | $ | 2.7 |
For the years ended December 31, 2015 and 2014, the North American foam trays and absorbent pads businesses contributed approximately $52.9 million and $213.9 million of net sales; and $10.3 million and $37.4 million of earnings before income taxes, respectively, which excludes certain allocated costs, including corporate support services, for which the Company would normally include in measuring its performance. Sale of European food trays business On November 1, 2015, we completed the sale of our European food trays business to Faerch Plast A/S, a European food packaging solutions provider, for net proceeds at that time of €17.6 million or approximately $19.0 million, net of certain purchase price adjustments of €1.7 million or approximately $1.9 million. We recorded a $13.1 million pre-tax loss on the sale of business, which is included in (Loss) gain on sale of business, net in the Consolidated Statement of Operations for the year ended December 31, 2015. The net proceeds excluded contingent consideration which will be received if certain performance targets are met. This transaction follows the sale of our North American foam trays and absorbent pads business in April 2015 and is aligned with our continued commitment to a disciplined approach to portfolio management strategy. The European sale included the manufacturing facilities in Poole, UK and Bunol, Spain. Subsequent to December 31, 2015, we recorded an additional pre-tax loss on the sale of business primarily due to a reduction in the net proceeds of $1.6 million. This resulted in cumulative net proceeds of €16.5 million or approximately $17.7 million. The European food trays business was part of the Company’s Food Care division. The European food trays business met the held for sale criteria in the fourth quarter of 2015 prior to its disposition. The disposal of the European food trays business did not qualify as a discontinued operation. The carrying amounts of assets and liabilities at disposition on November 1, 2015 are excluded from our Consolidated Balance Sheet as of December 31, 2015. The carrying value of the major classes of assets and liabilities for the business at the date of disposition were as follows:
|  | November 1, |
(In millions) |  | 2015 |
Assets: |  |  |  |
Receivables, net |  | $ | 0.2 |
Inventories, net |  |  | 6.0 |
Other current assets |  |  | 0.8 |
Property and equipment, net |  |  | 22.4 |
Goodwill |  |  | 1.5 |
Other non-current assets |  |  | 0.4 |
Assets |  | $ | 31.3 |
Liabilities: |  |  |  |
Accounts payable |  |  | 1.6 |
Accrued liabilities |  |  | 2.1 |
Other current liabilities |  |  | 0.6 |
Long term debt |  |  | 0.4 |
Other non-current liabilities |  |  | 0.1 |
Liabilities |  | $ | 4.8 |
For the years ended 2015 and 2014, the European food trays business contributed approximately $48.7 million and $70.9 million of net sales; and $6.9 million and $5.2 million of earnings before income taxes, respectively, which excludes certain allocated costs, including corporate support services for which the Company would normally include in measuring its performance. Acquisitions Acquisition of Intellibot Robotics, LLC During the first quarter of 2015, we acquired the business of Intellibot Robotics LLC, a U.S.-based privately owned company that has pioneered the development of robotic commercial floor cleaning machines. The combination of Diversey Care’s industry expertise and global reach and Intellibot’s artificial intelligence technology will help accelerate the development of the robotic floor cleaning machines market – ultimately driving efficiencies and business value for the hygiene industry. The fair value of the consideration transferred was $17.9 million which included cash paid of $8.5 million and $9.4 million related to the fair value of contingent consideration. We recorded the fair value of the assets acquired and liabilities assumed on the acquisition date, which included $11.0 million of intangible assets. Goodwill of $6.6 million was recorded and 100% will be deductible for tax purposes. The contingent consideration, which is classified as a liability, includes an estimate of earnout fees to be paid out in cash to the seller over a 10 year period based on various percentages of net sales over the 10 year period. Since it is classified as a liability, we must remeasure to fair value each reporting period. The fair value of the liability as of December 31, 2016 and 2015 was $7.3 million and $9.8 million, respectively, primarily included in non-current liabilities on the Consolidated Balance Sheet. The change due to fair value of $2.2 million in 2016 and $0.5 million in 2015 was recognized in selling, general and administrative expenses. The valuation of the contingent consideration is based on a probability weighted projection of payments over the applicable remaining period using the deterministic method. These projections are based on our internal forecast of the business performance and since this is an unobservable input used in the fair value measurement it would be considered a Level 3 input (as defined in Note 13, “Fair Value Measurements and Other Financial Instruments”). In addition, the probability weighted earnout payments were present valued using factors to consider the risk associated with achievement of the sales forecast and the credit risk associated with the payments. Acquisition of B+ Equipment During the third quarter of 2015, we acquired 100% equity interest in the business of B+ Equipment, a company headquartered in France that designs, manufactures and services automated packaging equipment for order fulfillment operations. Our acquisition strategy is focused on best-in-class, disruptive technologies that extends Product Care’s leadership position. The acquisition of B+ further solidifies our position in the growing e-commerce market with a solution that focuses on reducing the cost of shipping and increasing productivity. The fair value of the consideration transferred was $19.0 million which included an immaterial amount related to the fair value of contingent consideration. We recorded the fair value of the assets acquired and liabilities assumed on the acquisition date, which included $15.3 million of intangible assets. Goodwill of $6.4 million was recorded and none will be deductible for tax purposes.

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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 No definition available. + Details
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