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ACQUISITIONS AND DISPOSITION | 6 Months Ended
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Jun. 30, 2015
ACQUISITIONS AND DISPOSITION [Abstract] |
ACQUISITIONS AND DISPOSITION | 2. ACQUISITIONS AND DISPOSITION Acquisitions On June 19, 2014, the Company completed its acquisition of Power Solutions for $109.9 million, net of cash acquired. Power Solutions is a leading provider of high-efficiency and high-density power conversion products for server, storage and networking equipment, industrial applications and power systems. In connection with its acquisition of Power Solutions, the Company acquired a 49% interest in a joint venture in the People's Republic of China ("PRC"). The Company has assigned no value to this investment. See Note 15, Related Party Transactions, for additional information. During the second quarter of 2015, the Company finalized its valuation of the Power Solutions acquisition as further detailed in the table below. At the conclusion of the measurement period and as of June 30, 2015, there were certain working capital and tax related items outstanding with ABB Ltd. Any changes in facts and circumstances related to these items will be recorded on a prospective basis and not included as purchase price adjustments. See Note 9, Income Taxes, for further information on the tax related items. On July 25, 2014, the Company completed its acquisition of the U.S. and U.K. entities of Connectivity Solutions. On August 29, 2014, the China portion of the transaction closed. The Company paid a total of $98.8 million for Connectivity Solutions, net of cash acquired and including a working capital adjustment. Connectivity Solutions is a leading provider of high‑performance RF/Microwave and Harsh Environment Optical Connectors and Assemblies for military, aerospace, wireless communications, data communications, broadcast and industrial applications. During the three and six months ended June 30, 2015, the Company incurred $0.1 million and $0.5 million, respectively, of acquisition-related costs associated with the independent valuations of the 2014 Acquisitions and completion of the independent carve-out audit of Connectivity Solutions. During each of the three and six months ended June 30, 2014, the Company incurred $1.5 million of acquisition related costs. These costs are included in selling, general and administrative expense on the condensed consolidated statements of operations. Fair Value Estimate of Assets Acquired and Liabilities Assumed With respect to the Connectivity Solutions acquisition, we are continuing our review of our fair value estimate of assets acquired and liabilities assumed during the measurement period, which will conclude as soon as we receive the information we are seeking about facts and circumstances that existed as of the acquisition date, or learn that more information is not available. This measurement period will not exceed one year from the acquisition date. The table below depicts the Company's final purchase price allocation for the Power Solutions acquisition and fair value estimates of assets acquired and liabilities assumed for the Connectivity Solutions acquisition as of the respective acquisition dates. The amounts noted in the table below for Connectivity Solutions are provisional since the valuations of property and equipment, intangible assets acquired, income taxes and goodwill are still under review. Accordingly, there could be material adjustments to our condensed consolidated financial statements, including changes to our depreciation and amortization expense related to the valuation of property and equipment and intangible assets acquired and their respective useful lives, among other adjustments.
|  | Power Solutions |  |  | Connectivity Solutions |  |  | 2014 Acquisitions |
|  | June 19, 2014 |  |  | Measurement |  |  |  | June 19, |  |  | July 25/August 29, |  |  | Acquisition-Date |
|  | (As Reported at |  |  | Period Adjustments |  |  |  | 2014 |  |  | 2014(a) |  |  | Fair Values |
|  | December 31, 2014) |  |  | During 2015 |  |  |  | (Revised) |  |  | (As adjusted) |  |  | (As adjusted) |
Cash |  | $ | 20,912 |  |  | $ | - |  |  |  | $ | 20,912 |  |  | $ | 6,544 |  |  | $ | 27,456 |
Accounts receivable |  |  | 29,389 |  |  |  | - |  |  |  |  | 29,389 |  |  |  | 9,375 |  |  |  | 38,764 |
Inventories |  |  | 36,429 |  |  |  | - |  |  |  |  | 36,429 |  |  |  | 17,632 |  |  |  | 54,061 |
Other current assets |  |  | 7,350 |  |  |  | - |  |  |  |  | 7,350 |  |  |  | 2,615 |  |  |  | 9,965 |
Property, plant and equipment |  |  | 28,175 |  |  |  | (1,060 | ) | (b) |  |  | 27,115 |  |  |  | 9,900 |  |  |  | 37,015 |
Intangible assets |  |  | 33,220 |  |  |  | - |  |  |  |  | 33,220 |  |  |  | 40,000 |  |  |  | 73,220 |
Other assets |  |  | 19,171 |  |  |  | - |  |  |  |  | 19,171 |  |  |  | 2,345 |  |  |  | 21,516 |
Total identifiable assets |  |  | 174,646 |  |  |  | (1,060 | ) |  |  |  | 173,586 |  |  |  | 88,411 |  |  |  | 261,997 |
Accounts payable |  |  | (26,180 | ) |  |  | - |  |  |  |  | (26,180 | ) |  |  | (10,682 | ) |  |  | (36,862 | )
Accrued expenses |  |  | (25,545 | ) |  |  | - |  |  |  |  | (25,545 | ) |  |  | (5,307 | ) |  |  | (30,852 | )
Other current liabilities |  |  | 223 |  |  |  | - |  |  |  |  | 223 |  |  |  | (57 | ) |  |  | 166 |
Noncurrent liabilities |  |  | (42,062 | ) |  |  | (7,198 | ) | (c) |  |  | (49,260 | ) |  |  | (17,314 | ) |  |  | (66,574 | )
Total liabilities assumed |  |  | (93,564 | ) |  |  | (7,198 | ) |  |  |  | (100,762 | ) |  |  | (33,360 | ) |  |  | (134,122 | )
Net identifiable assets acquired |  |  | 81,082 |  |  |  | (8,258 | ) |  |  |  | 72,824 |  |  |  | 55,051 |  |  |  | 127,875 |
Goodwill |  |  | 49,710 |  |  |  | 8,258 |  |  |  |  | 57,968 |  |  |  | 50,306 |  |  |  | 108,274 |
Net assets acquired |  | $ | 130,792 |  |  | $ | - |  |  |  | $ | 130,792 |  |  | $ | 105,357 |  |  | $ | 236,149 |
Cash paid |  | $ | 130,792 |  |  | $ | - |  |  |  | $ | 130,792 |  |  | $ | 105,357 |  |  | $ | 236,149 |
Assumption of liability |  |  | - |  |  |  | - |  |  |  |  | - |  |  |  | - |  |  |  | - |
Fair value of consideration |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
transferred |  |  | 130,792 |  |  |  | - |  |  |  |  | 130,792 |  |  |  | 105,357 |  |  |  | 236,149 |
Deferred consideration |  |  | - |  |  |  | - |  |  |  |  | - |  |  |  | - |  |  |  | - |
Total consideration paid |  | $ | 130,792 |  |  | $ | - |  |  |  | $ | 130,792 |  |  | $ | 105,357 |  |  | $ | 236,149 |
(a) | The Company acquired the U.S. and U.K. entities of Connectivity Solutions on July 25, 2014 and the China entity of Connectivity Solutions on August 29, 2014. These values represent the estimated fair values as of the respective acquisition dates.
(b) | Represents the purchase accounting adjustments reflecting the finalization of the acquisition-date fair values of property, plant and equipment associated with completion of third-party valuations.
(c) | Represents the impact to deferred taxes reflecting the finalization of the allocation of identifiable intangible assets acquired.
Of the $58.0 million of goodwill noted above for Power Solutions, $56.3 million will be deductible for tax purposes. None of the goodwill related to the Connectivity Solutions acquisition will be deductible for tax purposes. The results of operations of the 2014 Acquired Companies have been included in the Company's condensed consolidated financial statements for the period subsequent to their respective acquisition dates. During the three months and six months ended June 30, 2015, the 2014 Acquired Companies contributed revenue of $58.4 million and $117.2 million respectively, and operating (loss) income of approximately ($1.2) million and $4.4 million, respectively, to the Company's condensed consolidated financial results. During the three and six months ended June 30, 2014, the Power Solutions acquisition contributed revenue of $7.2 million and an operating loss of approximately $1.0 million in each period. The following unaudited pro forma information presents a summary of the combined results of operations of the Company and the aggregate results of Power Solutions and Connectivity Solutions for the periods presented as if the 2014 Acquisitions had occurred on January 1, 2013, along with certain pro forma adjustments. The unaudited pro forma results are presented for illustrative purposes only and are not necessarily indicative of the results that would have actually been obtained if the acquisitions had occurred on January 1, 2013, nor is the pro forma data intended to be a projection of results that may be obtained in the future:
|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2014 |  |  | 2014 |
Revenue |  | $ | 156,842 |  |  | $ | 317,479 |
Net loss |  |  | (3,057 | ) |  |  | (1,399 | )
Loss per Class A common share - basic and diluted |  | $ | (0.26 | ) |  | $ | (0.13 | )
Loss per Class B common share - basic and diluted |  | $ | (0.27 | ) |  | $ | (0.12 | )
Disposition – Sale of NPS On January 23, 2015, the Company completed the sale of the Network Power Systems ("NPS") product line and related transactions of the acquired Power Solutions business to Unipower LLC ("Unipower") for $9.0 million in cash. The sale also included $1.0 million of escrow pending Unipower's realization of certain sales targets. The net proceeds of $9.0 million from the sale were used to repay outstanding borrowings in accordance with the provisions of the Credit and Security Agreement (see Note 8, Debt). The transaction provides that Bel will move processes and people to Unipower under an interim transition services agreement and Bel will also continue to manufacture the NPS products for up to 24 months under a manufacturing services agreement. As a result of the sale and related transactions, the Company recorded deferred revenue of $9.0 million. Of this amount, the Company has recognized net sales of $1.1 million and $2.1 million, respectively, in the condensed consolidated statement of operations for the three and six months ended June 30, 2015. The Company will recognize the $1 million currently in escrow when and if Unipower realizes certain sales targets and such amount would be included in interest income and other, net on the condensed consolidated statements of operations.

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