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Discontinued Operations, Divestitures and Acquisitions | 9 Months Ended
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Sep. 30, 2018
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations, Divestitures and Acquisitions | Discontinued Operations, Divestitures and Acquisitions Discontinued Operations On March 25, 2017, we entered into a definitive agreement to sell our Diversey Care division and the food hygiene and cleaning business within our Food Care division (collectively, "Diversey") for gross proceeds of USD equivalent of $3.2 billion, subject to customary closing conditions. The transaction was completed on September 6, 2017. During 2018, we recorded an additional net gain on the sale of Diversey of $41.9 million, net of taxes. This was related to the final net working capital settlement as well as the release of tax indemnity reserves upon expiration of statute of limitations. We have classified the operating results of Diversey, together with certain costs related to the divestiture transaction, as discontinued operations, net of tax, in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017. Summary operating results of Diversey were as follows:
(In millions) |  | Three Months Ended September 30, 2017 |  | Nine Months Ended September 30, 2017
Net sales |  | $ | 434.6 |  |  | $ | 1,667.5 |
Cost of sales |  | 249.1 |  |  | 949.5 |
Gross profit |  | 185.5 |  |  | 718.0 |
Selling, general and administrative expenses |  | 131.0 |  |  | 537.8 |
Amortization expense of intangible assets acquired |  | 7.7 |  |  | 23.9 |
Operating profit |  | 46.8 |  |  | 156.3 |
Other expense, net |  | (9.0 | ) |  | (17.0 | )
Earnings from discontinued operations before income tax provision |  | 37.8 |  |  | 139.3 |
Income tax provision from discontinued operations(1) |  | 12.1 |  |  | 28.0 |
Net earnings from discontinued operations, net of tax |  | $ | 25.7 |  |  | $ | 111.3 |
(1) | For the three and nine months ended September 30, 2017, net earnings from discontinued operations was impacted by $12.1 million and $28.0 million expense, respectively, related to a change in the repatriation strategy of foreign earnings offset by favorable earnings mix in jurisdictions with lower rates.
The following table presents selected financial information regarding cash flows of Diversey that are included within discontinued operations in the Condensed Consolidated Statements of Cash Flows:
(In millions) |  | Nine Months Ended September 30, 2017
Non-cash items included in net earnings from discontinued operations: |  |  |
Depreciation and amortization |  | $ | 29.3 |
Share-based incentive compensation |  | 10.2 |
Profit sharing expense |  | 3.0 |
Provision for bad debt |  | 2.3 |
Capital expenditures |  | 11.9 |
The amounts disclosed in the tables above have been excluded from the Notes to Condensed Consolidated Financial Statements unless otherwise noted. Divestitures Divestiture of Embalagens Ltda. On August 1, 2017, we entered into an agreement to sell our polystyrene food tray business in Guarulhos, Brazil for a gross purchase price of R$26.9 million (or $8.2 million as of the closing date of March 19, 2018). The purchase price is subject to working capital, cash and debt adjustments. For the three and nine months ended September 30, 2018, the Company recognized an immaterial net loss on sale and a net gain on the sale of $1.0 million, respectively, within other (expense) income, net on the Condensed Consolidated Statements of Operations. Acquisitions Acquisition of AFP On August 1, 2018, the Company acquired AFP, Inc., a leading, privately held fabricator of foam, corrugated, molded pulp and wood packaging solutions, to join its Product Care division. This acquisition further expands our protective packaging solutions in the electronics, transportation and industrial markets with custom-engineered applications. We acquired 100% of AFP shares for an estimated consideration of $70.8 million, excluding $2.9 million of cash acquired, subject to purchase price adjustments which will be finalized in 2019. The following table summarizes the consideration transferred to acquire AFP and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed. As of September 30, 2018 there were no adjustments made to the preliminary allocation.
|  | Preliminary Allocation
(In millions) |  | As of August 1, 2018
Total consideration transferred |  | $ | 70.8 |
Assets: |  |
Cash and cash equivalents |  | 2.9 |
Trade receivables, net |  | 30.8 |
Inventories, net |  | 7.1 |
Prepaid expenses and other current assets |  | 0.7 |
Property and equipment, net |  | 3.5 |
Identifiable intangible assets, net |  | 18.6 |
Goodwill |  | 21.6 |
Other non-current assets |  | 0.7 |
Total assets |  | $ | 85.9 |
Liabilities: |  |
Accounts payable |  | 13.8 |
Other current liabilities |  | 1.3 |
Total liabilities |  | $ | 15.1 |
The following tables summarizes the identifiable intangible assets, net and their useful life.
|  | Amount |  | Useful life
|  | (in millions) |  | (in years)
Customer relationships |  | $ | 16.6 |  |  | 11
Trademarks and tradenames |  | 2.0 |  |  | 15
Total intangible assets with definite lives |  | $ | 18.6 |  |  |
Acquisition of Fagerdala On October 2, 2017, the Company acquired Fagerdala Singapore Pte Ltd. ("Fagerdala"), a manufacturer and fabricator of polyethylene foam based in Singapore, to join its Product Care division. We acquired 100% of Fagerdala shares for estimated consideration of S$144.2 million, or $106.2 million, excluding cash acquired of $13.3 million, inclusive of purchase price adjustments which were finalized in the third quarter of 2018. We acquired Fagerdala to leverage its manufacturing footprint in Asia, expertise in foam manufacturing and fabrication, and commercial organization to grow sales in the consumer electronics, medical equipment and devices, automotive, temperature assurance, and e-commerce fulfillment sectors. The following table summarizes the consideration transferred to acquire Fagerdala and the preliminary and final allocation of the purchase price among the assets acquired and liabilities assumed.
|  | Preliminary Allocation |  | Measurement Period |  | Revised Allocation
(In millions) |  | As of October 2, 2017 |  | Adjustments |  | As of September 30, 2018
Total consideration transferred |  | $ | 106.6 |  |  | $ | (0.4 | ) |  | $ | 106.2 |
Assets: |  |  |  |  |  |
Cash and cash equivalents |  | 13.3 |  |  | — |  |  | 13.3 |
Trade receivables, net |  | 22.4 |  |  | — |  |  | 22.4 |
Inventories, net |  | 10.0 |  |  | 0.1 |  |  | 10.1 |
Prepaid expenses and other current assets |  | 8.4 |  |  | — |  |  | 8.4 |
Property and equipment, net |  | 23.3 |  |  | — |  |  | 23.3 |
Identifiable intangible assets, net |  | 41.4 |  |  | 0.7 |  |  | 42.1 |
Goodwill |  | 39.3 |  |  | (1.5 | ) |  | 37.8 |
Total assets |  | $ | 158.1 |  |  | $ | (0.7 | ) |  | $ | 157.4 |
Liabilities: |  |  |  |  |  |
Short-term borrowings |  | 14.0 |  |  | — |  |  | 14.0 |
Accounts payable |  | 6.9 |  |  | — |  |  | 6.9 |
Other current liabilities |  | 15.1 |  |  | (0.1 | ) |  | 15.0 |
Long-term debt, less current portion |  | 3.8 |  |  | — |  |  | 3.8 |
Non-current deferred taxes |  | 11.7 |  |  | (0.2 | ) |  | 11.5 |
Total liabilities |  | $ | 51.5 |  |  | $ | (0.3 | ) |  | $ | 51.2 |
The following tables summarizes the identifiable intangible assets, net and their useful life.
|  | Amount |  | Useful life
|  | (in millions) |  | (in years)
Customer relationships |  | $ | 25.4 |  |  | 17
Trademarks and tradenames |  | 10.6 |  |  | 15
Technology |  | 6.1 |  |  | 13
Total intangible assets with definite lives |  | $ | 42.1 |  |  |
Acquisition of Deltaplam On August 1, 2017, the Food Care division acquired Deltaplam Embalagens Indústria e Comércio Ltda ("Deltaplam"), a family owned and operated Brazilian flexible packaging manufacturer. The preliminary fair value of the consideration transferred was approximately $25.8 million. We recorded the fair value of the assets acquired and liabilities assumed on the acquisition date, which included $8.1 million of goodwill and $7.4 million of intangible assets. As of September 30, 2018, the final fair value of the consideration transferred was $25.3 million, which included $9.7 million of goodwill and $5.9 million of intangible assets.

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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 Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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