BUSINESS COMBINATIONS

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Note 2 — BUSINESS COMBINATIONS

On September 1, 2022, the Company completed the acquisition of the DSM Protective Materials business, including the Dyneema® brand, the World's Strongest Fiber™. The ultra-light specialty fiber is used in demanding applications such as ballistic personal protection, marine and sustainable infrastructure, renewable energy, industrial protection and outdoor sports. The acquired business is collectively referred to as APM, and the acquisition is referred to as the APM Acquisition. The APM Acquisition enhances Avient's material offerings of composites and engineered fibers, and results are recognized within the Specialty Engineered Materials segment.

Total consideration paid by the Company to complete the APM Acquisition was $1.4 billion, net of cash acquired. The APM Acquisition was accounted for under the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 805. As of September 30, 2023, the purchase accounting for the APM Acquisition was complete. Measurement period adjustments since our preliminary estimates reported in our third quarter 2022 Form 10-Q are reflected in the table below. Measurement period adjustments recorded to the Condensed Consolidated Statements of Income were not material for the three and nine months ended September 30, 2023.


(in millions)	Preliminary Allocation As of 9/1/2022		Measurement Period Adjustments		Final Allocation
Cash and cash equivalents	$	50.7	$	—	$	50.7
Accounts receivable	52.2		1.8		54.0

Inventories	136.2		(8.1)		128.1
Other current assets	2.0		1.7		3.7
Property	361.9		(15.5)		346.4
Intangible assets:
Indefinite-lived trade names	254.9		—		254.9
Customer relationships	198.7		20.0		218.7
Patents, technology, and other	275.1		—		275.1
Goodwill	277.1		129.7		406.8



Other non-current assets	12.3		(0.1)		12.2
Accounts payable	32.2		—		32.2


Accrued expenses and other current liabilities	12.9		0.3		13.2
Deferred tax liabilities	86.1		129.9		216.0

Noncontrolling interests	—		2.3		2.3
Other non-current liabilities	13.1		(3.0)		10.1
Total purchase price consideration	$	1,476.8	$	—	$	1,476.8

Definite-lived intangible assets that have been acquired have a useful life range of 15 - 20 years. Goodwill of $406.8 million resulting from the acquisition was recorded to the Specialty Engineered Materials segment. The goodwill recognized is primarily attributable to intangible assets that do not qualify for separate recognition and the deferred tax impact of applying purchase accounting. Goodwill is not deductible for tax purposes.

Had the APM Acquisition occurred on January 1, 2021, sales and income from continuing operations before income taxes on a pro forma basis would have been as follows:


	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Sales	$	884.0	$	2,862.6
(Loss) income from continuing operations before income taxes	(3.8)		175.8

The unaudited pro forma financial information has been calculated after applying our accounting policies and adjusting the historical results with pro forma adjustments that assume the APM Acquisition occurred on January 1, 2021. These unaudited pro forma results do not represent financial results realized, nor are they intended to be a projection of future results.

The pro forma (loss) income from continuing operations before income taxes for the three and nine months ended September 30, 2022 gives effect to intangible amortization from the purchase price allocation and changes to interest expense resulting from the financing transactions associated with the APM Acquisition and sale of the Distribution business.