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Business Divestiture | 9 Months Ended
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Sep. 30, 2021
Discontinued Operations and Disposal Groups [Abstract] |
Business Divestiture | Business Divestiture Sale of Ctrack South Africa Operations On February 24, 2021, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Convergence to sell its Ctrack South Africa business operations in an all-cash transaction for 528.9 million South African Rand (“ZAR”) (approximately $36.6 million United States Dollars). The Purchase Agreement provides for an adjustment to the purchase price based on a normalized level of net working capital. On July 30, 2021, the Company completed the sale of Ctrack South Africa. Initial cash proceeds of $36.6 million were received. Net cash proceeds received were $31.5 million, net of cash sold of $5.1 million. Final cash proceeds were subject to certain post-closing working capital adjustments which totaled $2.6 million, out of which $2.2 million was received on October 29, 2021, and the remaining $0.4 million was offset with the Company’s existing accounts payable balance to Convergence. The Company recorded a receivable for such balance as of September 30, 2021. The Purchase Agreement required the Company to place in escrow 52.9 million ZAR, (approximately $3.5 million United States Dollars), which will be released on July 30, 2022. The funds in escrow will allow for Convergence to submit claims that are deemed to be uninsured warranties as defined in the Purchase Agreement. In evaluating the accounting treatment for this sale, the transaction was considered to be the deconsolidation of a subsidiary, as defined in ASC 810 Consolidation. The gain upon sale is $5.3 million. Such gain has been recognized as gain on sale of Ctrack South Africa in the condensed consolidated results of operations during the three and nine months ended September 30, 2021. The Company also recorded $2.2 million of transaction expenses, which were expensed as incurred and included within other income (expense), net, in the condensed consolidated results of operations for the three and nine months ended September 30, 2021. The assets and liabilities of Ctrack South Africa that were sold in the transaction as of July 30, 2021, are summarized below:
(in thousands) |
Assets: |
Cash and cash equivalents | $ | 5,040 |
Accounts receivable, net | 3,505 |
Inventory | 3,821 |
Prepaid expenses and other | 370 |
Property, plant and equipment, net | 4,545 |
Rental assets, net | 2,448 |
Intangible assets, net | 11,278 |
Goodwill | 10,734 |
Total assets | $ | 41,741 |
Accounts payable | $ | 3,961 |
Accrued expenses and other liabilities | 1,107 |
Deferred tax liabilities, net | 3,647 |
Other long-term liabilities | 746 |
Total liabilities | 9,461 |
Net assets | $ | 32,280 |
As of September 30, 2021, net proceeds recognized are comprised of the following:
(in thousands) |
Initial purchase consideration received, upon close | $ | 36,566 |
Working capital adjustments | 2,584 |
Net proceeds recognized | $ | 39,150 |
Net gain on sale for the three and nine months ended September 30, 2021 is comprised of the following:
(in thousands) |
Gross proceeds recognized | $ | 39,150 |
Less: Book value of net assets sold | 32,280 |
Less: Release of cumulative foreign currency translation adjustments related to Ctrack South Africa | 1,608 |
Net gain on sale | $ | 5,262 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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