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ACQUISITIONS AND DISPOSITION | 9 Months Ended
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Sep. 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 the valuation of the Power Solutions acquisition as further detailed in the table below. At the conclusion of the measurement period, which was one year after the acquisition date, there were certain working capital and tax related items outstanding with ABB Ltd. The working capital item was settled with ABB Ltd. during the third quarter of 2015, which was after the conclusion of the measurement period and, as a result, the Company recognized $4.2 million of other income on the condensed consolidated statements of operations. See Note 9, Income Taxes, for further information on the tax related items outstanding with ABB Ltd. 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 third quarter of 2015, the Company finalized its valuation of the Connectivity Solutions acquisition as further detailed in the table below. During the three and nine months ended September 30, 2015, the Company incurred $0.1 million and $0.6 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 nine months ended September 30, 2014, the Company incurred $3.8 million and $5.3 million, respectively, of acquisition related costs. These costs are included in selling, general and administrative expense on the condensed consolidated statements of operations. Fair Value of Assets Acquired and Liabilities Assumed The table below depicts the Company's final purchase price allocation for the 2014 Acquisitions as of the respective acquisition dates.
|  | Power Solutions |  |  | Connectivity Solutions |  |  | 2014 Acquisitions |
|  | June 19, 2014 |  |  |  |  |  |  |  |  |  | July 25, 2014/ |  |  |  |  |  |  |  |  |  |  |
|  | (As Reported at |  |  | Measurement |  |  |  | June 19, |  |  | August 29, 2014(a) |  |  | Meaurement |  |  |  | July 25, 2014/ |  |  | Acquisition-Date |
|  | December 31, |  |  | Period |  |  |  | 2014 |  |  | (As Reported at |  |  | Period |  |  |  | August 29, 2014 |  |  | Fair Values |
|  |  | 2014) |  |  | Adjustments |  |  |  | (Revised) |  |  | December 31, 2014) |  |  | Adjustments |  |  |  | (Revised) |  |  | (Revised) |
Cash |  | $ | 20,912 |  |  | $ | - |  |  |  | $ | 20,912 |  |  | $ | 6,544 |  |  | $ | - |  |  |  | $ | 6,544 |  |  | $ | 27,456 |
Accounts receivable |  |  | 29,389 |  |  |  | - |  |  |  |  | 29,389 |  |  |  | 9,375 |  |  |  | - |  |  |  |  | 9,375 |  |  |  | 38,764 |
Inventories |  |  | 36,429 |  |  |  | - |  |  |  |  | 36,429 |  |  |  | 17,632 |  |  |  | - |  |  |  |  | 17,632 |  |  |  | 54,061 |
Other current assets |  |  | 7,350 |  |  |  | - |  |  |  |  | 7,350 |  |  |  | 2,615 |  |  |  | (1,761 | ) | (c) |  |  | 854 |  |  |  | 8,204 |
Property, plant and equipment |  |  | 28,175 |  |  |  | (1,060 | ) | (b) |  |  | 27,115 |  |  |  | 9,900 |  |  |  | - |  |  |  |  | 9,900 |  |  |  | 37,015 |
Intangible assets |  |  | 33,220 |  |  |  | - |  |  |  |  | 33,220 |  |  |  | 40,000 |  |  |  | - |  |  |  |  | 40,000 |  |  |  | 73,220 |
Other assets |  |  | 19,171 |  |  |  | - |  |  |  |  | 19,171 |  |  |  | 2,345 |  |  |  | 2,388 |  | (c) |  |  | 4,733 |  |  |  | 23,904 |
Total identifiable assets |  |  | 174,646 |  |  |  | (1,060 | ) |  |  |  | 173,586 |  |  |  | 88,411 |  |  |  | 627 |  |  |  |  | 89,038 |  |  |  | 262,624 |
Accounts payable |  |  | (26,180 | ) |  |  | - |  |  |  |  | (26,180 | ) |  |  | (10,682 | ) |  |  | - |  |  |  |  | (10,682 | ) |  |  | (36,862 | )
Accrued expenses |  |  | (25,545 | ) |  |  | - |  |  |  |  | (25,545 | ) |  |  | (5,307 | ) |  |  | 76 |  |  |  |  | (5,231 | ) |  |  | (30,776 | )
Other current liabilities |  |  | 223 |  |  |  | - |  |  |  |  | 223 |  |  |  | (57 | ) |  |  | 946 |  | (c) |  |  | 889 |  |  |  | 1,112 |
Noncurrent liabilities |  |  | (42,062 | ) |  |  | (4,623 | ) | (c) |  |  | (46,685 | ) |  |  | (17,314 | ) |  |  | (1,352 | ) | (c) |  |  | (18,666 | ) |  |  | (65,351 | )
Total liabilities assumed |  |  | (93,564 | ) |  |  | (4,623 | ) |  |  |  | (98,187 | ) |  |  | (33,360 | ) |  |  | (330 | ) |  |  |  | (33,690 | ) |  |  | (131,877 | )
Net identifiable assets acquired |  |  | 81,082 |  |  |  | (5,683 | ) |  |  |  | 75,399 |  |  |  | 55,051 |  |  |  | 297 |  |  |  |  | 55,348 |  |  |  | 130,747 |
Goodwill |  |  | 49,710 |  |  |  | 5,683 |  |  |  |  | 55,393 |  |  |  | 50,306 |  |  |  | (297 | ) |  |  |  | 50,009 |  |  |  | 105,402 |
Net assets acquired |  | $ | 130,792 |  |  | $ | - |  |  |  | $ | 130,792 |  |  | $ | 105,357 |  |  | $ | - |  |  |  | $ | 105,357 |  |  | $ | 236,149 |
Cash paid |  | $ | 130,792 |  |  | $ | - |  |  |  | $ | 130,792 |  |  | $ | 105,357 |  |  | $ | - |  |  |  | $ | 105,357 |  |  | $ | 236,149 |
Assumption of liability |  |  | - |  |  |  | - |  |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  | - |  |  |  | - |
Fair value of consideration |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
transferred |  |  | 130,792 |  |  |  | - |  |  |  |  | 130,792 |  |  |  | 105,357 |  |  |  | - |  |  |  |  | 105,357 |  |  |  | 236,149 |
Deferred consideration |  |  | - |  |  |  | - |  |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  | - |  |  |  | - |
Total consideration paid |  | $ | 130,792 |  |  | $ | - |  |  |  | $ | 130,792 |  |  | $ | 105,357 |  |  | $ | - |  |  |  | $ | 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 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) | Primarily represents the impact to deferred taxes reflecting the finalization of the allocation of identifiable intangible assets acquired.
Of the goodwill noted above, $17.7 million of goodwill associated with Power Solutions and $3.2 million of goodwill associated with Connectivity Solutions will be deductible for U.S. income 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 nine months ended September 30, 2015, the 2014 Acquired Companies contributed revenue of $57.7 million and $175.0 million, respectively, and operating income of approximately $5.3 million and $13.0 million, respectively, to the Company's condensed consolidated financial results. During the three and nine months ended September 30, 2014, the 2014 Acquisitions contributed revenue of $63.1 million and $70.3 million, respectively, and an operating loss of less than $0.1 million and $1.0 million, respectively, to the Company's condensed consolidated financial results. 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 |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2014 |  |  | 2014 |
Revenue |  | $ | 163,040 |  |  | $ | 480,519 |
Net earnings |  | $ | 8,171 |  |  | $ | 6,772 |
Net earnings per Class A common share - basic and diluted |  | $ | 0.66 |  |  | $ | 0.54 |
Net earnings per Class B common share - basic and diluted |  | $ | 0.70 |  |  | $ | 0.59 |
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. This sale was not classified as a discontinued operation since the disposal did not represent a strategic shift that would have a major impact on Bel's operations. 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 during the first quarter of 2015. Of this amount, the Company has recognized net sales of $1.1 million and $3.2 million, respectively, in the condensed consolidated statement of operations for the three and nine months ended September 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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