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Acquisition and Divestiture Activity | 12 Months Ended
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Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisition and Divestiture Activity | Acquisition and Divestiture Activity LB Holdco, Inc. Acquisition On February 1, 2023, SEE acquired 100% of the outstanding shares of capital stock of LB Holdco, Inc., the parent company of Liquibox, Inc. (collectively, "Liquibox"), a pioneer, innovator and manufacturer of Bag-in-Box liquids packaging and dispensing solutions for food, beverage, consumer goods and industrial end markets. The acquisition is included in our Food reporting segment. Consideration paid was approximately $1.17 billion in cash, subject to customary adjustments. We financed the consideration paid and related fees and expenses through borrowings under our senior secured credit facility, proceeds from the issuance of senior notes, and cash on hand. See Note 14, "Debt and Credit Facilities," for additional details. For the years ended December 31, 2023 and 2022, acquisition related expenses recognized for the Liquibox acquisition were $12.0 million and $7.0 million, respectively. These expenses are included within Selling, general and administrative expenses in the Consolidated Statements of Operations. The following table summarizes the consideration transferred to acquire Liquibox and the allocation of the purchase price among the assets acquired and liabilities assumed, including measurement period adjustments recorded through the finalized purchase price allocation on December 31, 2023.
|  | Preliminary Allocation |  | Measurement Period |  | Final Allocation
(In millions) |  | As of February 1, 2023 |  | Adjustments |  | December 31, 2023
Total consideration transferred |  | $ | 1,169.2 |  |  | $ | (2.1) |  |  | $ | 1,167.1 |
Assets acquired: |  |  |  |  |  |
Cash and cash equivalents |  | 21.2 |  |  | — |  |  | 21.2 |
Trade receivables |  | 48.6 |  |  | (0.8) |  |  | 47.8 |
Inventories |  | 61.6 |  |  | (2.8) |  |  | 58.8 |
Prepaid expenses and other current assets |  | 15.8 |  |  | (1.7) |  |  | 14.1 |
Property and equipment |  | 101.1 |  |  | (8.2) |  |  | 92.9 |
Identifiable intangible assets |  | 342.1 |  |  | 4.2 |  |  | 346.3 |
Operating lease right-of-use-assets |  | 15.1 |  |  | — |  |  | 15.1 |
Other non-current assets |  | 9.5 |  |  | (1.5) |  |  | 8.0 |
Total assets acquired |  | $ | 615.0 |  |  | $ | (10.8) |  |  | $ | 604.2 |
Liabilities assumed: |  |  |  |  |  |
Accounts payable |  | 27.0 |  |  | (1.4) |  |  | 25.6 |
Current portion of long-term debt |  | 0.1 |  |  | — |  |  | 0.1 |
Current portion of operating lease liabilities |  | 3.7 |  |  | — |  |  | 3.7 |
Other current liabilities |  | 28.4 |  |  | 2.8 |  |  | 31.2 |
Long-term debt, less current portion |  | 5.1 |  |  | — |  |  | 5.1 |
Long-term operating lease liabilities, less current portion |  | 11.4 |  |  | — |  |  | 11.4 |
Deferred taxes |  | 92.2 |  |  | (35.1) |  |  | 57.1 |
Other non-current liabilities |  | 6.6 |  |  | (4.2) |  |  | 2.4 |
Total liabilities assumed |  | $ | 174.5 |  |  | $ | (37.9) |  |  | $ | 136.6 |
Net assets acquired |  | 440.5 |  |  | 27.1 |  |  | 467.6 |
Goodwill |  | $ | 728.7 |  |  | $ | (29.2) |  |  | $ | 699.5 |
The following table summarizes the identifiable intangible assets and their useful lives.
|  | Amount |  | Useful life
| (In millions) |  | (In years)
Customer relationships |  | $ | 186.4 |  |  | 11.0
Trademarks and tradenames |  | 26.0 |  |  | 10.0
Software |  | 3.7 |  |  | 2.0
Technology |  | 130.2 |  |  | 12.0
Total intangible assets with definite lives |  | $ | 346.3 |  |  |
Goodwill is a result of the synergies that are expected to originate from the combination of Cryovac and Liquibox solutions for the Company, as well as growth of our sustainable packaging portfolio. This goodwill is not deductible for tax purposes. The goodwill balance associated with Liquibox is included in the Food reportable segment. Liquibox Supplemental Information The following table presents the amounts of net sales and net earnings attributed to Liquibox since the acquisition date that are included in our Consolidated Statements of Operations for the year ended December 31, 2023:
(In millions) |  |  |  | February 1, 2023 through December 31, 2023
Net sales |  |  |  | $ | 284.3 |
Net earnings |  |  |  | $ | 2.6 |
Pro Forma Financial Information The following table presents the Company’s unaudited pro forma financial information for the years ended December 31, 2023 and 2022, assuming the acquisition of Liquibox had occurred on January 1, 2022. The information below reflects pro forma adjustments based on available information and certain assumptions that SEE believes are factual and supportable. The unaudited pro forma information is not necessarily indicative of the results that might have occurred had the transaction actually taken place on January 1, 2022 and is not intended to be a projection of future results and gives no effect to any future synergistic benefits that may result from the combination or the costs of integrating the acquired operations with those of the Company.
|  |  |  | Year Ended December 31,
(In millions) |  |  |  |  |  | 2023 |  | 2022
Net sales |  |  |  |  |  | $ | 5,514.5 |  |  | $ | 6,003.4 |
Net earnings |  |  |  |  |  | $ | 351.2 |  |  | $ | 380.2 |
The unaudited pro forma financial information includes, where applicable, adjustments for (i) additional expense from the fair value step-up of inventory, (ii) additional amortization expense related to acquired intangible assets, (iii) additional depreciation expense related to acquired property and equipment, (iv) transaction costs and other one-time non-recurring costs, (v) additional interest expense for borrowings related to the acquisition and amortization associated with fair value adjustments of debt assumed, and (vi) associated tax-related impacts of adjustments. Other 2023 Acquisition Activity During the second quarter of 2023, Food had other acquisition activity resulting in a total purchase price paid of $14.9 million. The Company allocated the consideration transferred to the fair value of assets acquired, resulting in an allocation to goodwill of $7.9 million. In the third quarter of 2023, the final purchase price adjustments resulted in an insignificant decrease to goodwill. This goodwill is not deductible for tax purposes. There were no other identifiable intangible assets acquired. This acquisition activity is expected to supplement our developmental efforts for sustainable packaging and accelerate our speed to market for certain sustainable solutions. This acquisition activity was not material to our Consolidated Financial Statements. Acquisition of Foxpak Flexibles Ltd. On February 2, 2022, SEE acquired Foxpak Flexibles Ltd. (“Foxpak”), a privately-owned Irish packaging solutions company. Foxpak is a digital printing pioneer that partners with brands to deliver highly decorated packaging solutions, stand-up and spout pouches, and sachets that serve a variety of markets including food retail, pet food, seafood, and snacks. This transaction resulted in a purchase price paid of $9.7 million, including the final purchase price adjustments that were recorded in the second and fourth quarters of 2022. The Company allocated the consideration transferred to the fair value of assets acquired and liabilities assumed, resulting in an allocation to goodwill of $5.2 million and an allocation to identifiable intangible assets of $2.7 million. The acquisition is included in our Food reporting segment. This goodwill is not deductible for tax purposes. A deferred tax liability of $0.3 million on identifiable intangible assets was recorded on the opening balance sheet. The Foxpak acquisition was not material to our Consolidated Financial Statements. Divestiture of Reflectix, Inc. On November 1, 2021, the Company completed the sale of Reflectix, Inc. (“Reflectix”), a wholly-owned subsidiary that sells branded reflective insulation solutions, with operations located in Markleville, Indiana. The decision to sell this business was consistent with the Company's overall strategic priorities focused on packaging solutions. Reflectix was previously included within the Protective reporting segment. The disposal does not represent a strategic shift that will have a major effect on our operations and financial results and therefore did not qualify as a discontinued operation. The selling price of the business was $82.5 million, paid in cash received during the fourth quarter 2021. We recorded a $45.3 million pre-tax gain on the sale of the business, within (Loss) Gain on disposal and sale of businesses and property and equipment, net on the Consolidated Statements of Operations. The business had a net carrying value of $35.8 million, which included inventory of $6.8 million, trade receivables of $6.6 million, property and equipment of $1.0 million, and goodwill of $23.2 million. This goodwill is not deductible for tax purposes. The assets were partially offset by accrued liabilities which were individually immaterial. We recorded $17.3 million in tax expense related to the gain from the sale of Reflectix within Income tax provision on the Consolidated Statements of Operations for the year ended December 31, 2021. In the second quarter of 2022, we recorded a gain of $0.4 million related to the final net working capital settlement within Selling, general and administrative expenses on the Consolidated Statements of Operations. We maintain no ongoing investment or relationship that would result in the sold business becoming a related party.

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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://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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