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Acquisitions and Investments
 12 Months Ended
Dec. 31, 2015
Business Combinations [Abstract]  
Acquisitions and Investments

4. Acquisitions and Investments

2015

In the year ended December 31, 2015, the Company completed seven acquisitions and other investments for an aggregate purchase price of $86 million, net of cash acquired. The Company has preliminarily allocated $12 million to identifiable intangible assets and $56 million to goodwill. The amount allocated to goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill specifically includes the expected synergies and other benefits that the Company believes will result from combining its operations with those of businesses acquired and other intangible assets that do not qualify for separate recognition, such as assembled workforce in place at the date of acquisition. Goodwill resulting from the acquisitions is not deductible for tax purposes.

2014

In the year ended December 31, 2014, the Company completed 10 acquisitions for an aggregate purchase price of $291 million, net of cash acquired. The Company has allocated $59 million to identifiable intangible assets and $167 million to goodwill. The amount allocated to goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill specifically includes the expected synergies and other benefits that the Company believes will result from combining its operations with those of businesses acquired and other intangible assets that do not qualify for separate recognition, such as assembled workforce in place at the date of acquisition. Goodwill resulting from the acquisitions is not deductible for tax purposes.

2013

On February 20, 2013, the Company completed its acquisition of all of the shares of Robbins & Myers, Inc. (“R&M”), a U.S.-based designer and manufacturer of products and systems for the oil and gas industry. Under the merger agreement for this transaction, R&M shareholders received $60.00 in cash for each common share for an aggregate purchase price of $2,378 million, net of cash acquired. In addition to R&M, the Company completed five acquisitions and other investments for an aggregate purchase price of $19 million, net of cash acquired.

The Company has included the financial results of R&M in its consolidated financial statements as of the date of acquisition with components of the R&M operations included in each of the Company’s segments. The Company believes the acquisition of R&M will advance its strategic goal of providing a broader selection of products and services to its customers.

The following table displays the total purchase price allocation for the R&M acquisition. The table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in millions):

 

     2013  

Current assets, net of cash acquired

    $ 428   

Property, plant and equipment

      250   

Intangible assets

      894   

Goodwill

      1,590   

Other assets

      49   
  

 

 

  

Total assets acquired

      3,211   
  

 

 

  

Current liabilities

      186   

Deferred taxes

      524   

Other liabilities

      123   
  

 

 

  

Total liabilities

      833   
  

 

 

  

Cash consideration, net of cash acquired

    $ 2,378   
  

 

 

  

 

The Company has allocated $894 million to identifiable intangible assets (19 year weighted-average life). The intangible assets are amortizable and are comprised of: $635 million of customer relationships (18 year weighted-average life), $170 million of patents (20 year weighted-average life), $86 million of trademarks (20 year weighted-average life), and $3 million of other intangible assets (1 year weighted-average life). The amount allocated to goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill specifically includes the expected synergies and other benefits that the Company believes will result from combining its operations with those of businesses acquired and other intangible assets that do not qualify for separate recognition, such as assembled workforce in place at the date of acquisition. Goodwill resulting from the R&M acquisition is not deductible for tax purposes.

Each of the acquisitions was accounted for using the purchase method of accounting and, accordingly, the results of operations of each business are included in the consolidated statements of income from the date of acquisition. A summary of the acquisitions follows (in millions):

 

     Years Ended December 31,  
     2015      2014      2013  

Fair value of assets acquired, net of cash acquired

    $ 116       $ 406       $ 3,329   

Cash paid, net of cash acquired

      (86 )       (291 )       (2,397 ) 
  

 

 

     

 

 

     

 

 

  

Liabilities assumed, debt issued and noncontrolling interest

    $ 30       $ 115       $ 932   
  

 

 

     

 

 

     

 

 

  

Excess purchase price over fair value of net assets acquired

    $ 56       $ 167       $ 1,903