Acquisitions | Acquisitions 2021 Acquisitions ASP Henry Holdings, Inc On September 1, 2021, the Company acquired ASP Henry Holdings, Inc. (“Henry”), a leading provider of building envelope systems, for consideration of $1,605.6 million, including $34.3 million of cash acquired and post-closing adjustments, which were finalized in the fourth quarter of 2021. The Company funded the acquisition with borrowings from its Revolving Credit Facility (the "Facility") and cash on hand. The Company subsequently repaid the borrowings from the Facility with proceeds from its public offering of $300.0 million in aggregate principal amount of its 0.55% senior notes due in September 2023 and $550.0 million in aggregate principal amount of its 2.20% senior notes due in March 2032 (refer to Note 12). Henry contributed revenues of $177.3 million and operating income of $6.3 million for the period from September 1, 2021, to December 31, 2021. Operating income for the period from September 1, 2021, to December 31, 2021, includes $2.2 million of incremental cost of goods sold related to measuring inventory at fair value, and $16.3 million and $1.4 million of amortization expense of customer relationships and acquired technology, respectively. Henry's results of operations are reported as part of the CCM segment. The Henry amounts included in the pro forma financial information below are based on Henry’s historical results and therefore may not be indicative of the actual results if Henry had been owned by the Company on January 1, 2020. The pro forma adjustments represent management’s best estimates based on information available at the time the pro forma information was prepared and may differ from the adjustments that may have been required had the Company owned Henry on January 1, 2020. Accordingly, pro forma information should not be relied upon as being indicative of the historical results that would have been realized had the acquisition occurred as of January 1, 2020 or the results that may be achieved in the future. The unaudited combined pro forma financial information presented below includes revenues and income from continuing operations, net of tax, of the Company as if the business combination had occurred on January 1, 2020, based on the purchases price allocation presented below: Unaudited Pro Forma Year ended December 31, (in millions) 2021 2020 Revenues $ 5,170.6 $ 4,435.1 Income from continuing operations $ 410.7 $ 318.1 The pro forma financial information reflects adjustments to Henry's historical financial information to apply the Company's accounting policies and to reflect the additional depreciation and amortization related to the preliminary fair value adjustments of the acquired net assets of $37.4 million and $55.1 million for the year ended December 31, 2021 and 2020, respectively, together with the associated tax effects. The pro forma financial information also reflects cost of goods sold related to the fair valuation of inventory described above, and $22.2 million of acquisition-related costs primarily related to professional fees, as if they occurred in 2020. The following table summarizes the consideration transferred to acquire Henry and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations , which requires that consideration be allocated to the acquired assets and assumed liabilities based upon their acquisition date fair values with the remainder allocated to goodwill. The fair values are preliminary and subject to change pending receipt of the final valuation for all acquired assets and liabilities. Preliminary Allocation Measurement Period Adjustments Preliminary Allocation (in millions) As of As of 12/31/2021 Total cash consideration transferred $ 1,608.2 $ (2.6) $ 1,605.6 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 34.3 — 34.3 Receivables, net 79.0 — 79.0 Inventories 59.4 (7.9) 51.5 Prepaid expenses and other current assets 10.5 (0.2) 10.3 Property, plant and equipment 53.6 8.2 61.8 Other intangible assets 735.1 446.7 1,181.8 Other long-term assets 3.6 7.7 11.3 Accounts payable (77.9) 2.2 (75.7) Accrued and other current liabilities (28.7) (0.4) (29.1) Short-term debt (1.0) — (1.0) Contract liabilities (2.6) — (2.6) Other long-term debt (0.8) — (0.8) Other long-term liabilities (5.9) (7.7) (13.6) Deferred income taxes (153.4) (111.8) (265.2) Total identifiable net assets 705.2 336.8 1,042.0 Goodwill $ 903.0 $ (339.4) $ 563.6 The goodwill recognized in the acquisition of Henry is attributable to its significant supply chain efficiencies, other administrative opportunities and the strategic value of the business to Carlisle, in addition to opportunities for product line expansions. The Company acquired $81.9 million of gross contractual accounts receivable, of which $2.9 million was not expected to be collected at the date of acquisition. Goodwill of $50.9 million is tax deductible in the United States. All of the goodwill has been preliminarily assigned to the CCM reporting unit, which aligns with the CCM reportable segment. The preliminary fair value and weighted average useful lives of the acquired intangible assets are as follows: (in millions) Fair Value Weighted Average Useful Life (in years) Customer relationships $ 915.9 18 Technologies 46.5 11 Software 0.1 4 Indefinite-lived trade name 219.3 N/A Total $ 1,181.8 The Company has also recorded, as part of the purchase price allocation, deferred tax liabilities primarily related to intangible assets of approximately $265.2 million. 2020 Acquisitions Motion Tech Automation, LLC On July 22, 2020, the Company acquired 100% of the equity of Motion Tech Automation, LLC for consideration of $33.3 million, including $0.3 million of cash acquired and post-closing adjustments, which were finalized in the third quarter of 2020. The acquired products and services include sensors, manufacturing services, distribution services and engineering services to packaging and label, life sciences, semiconductor, fluid handling, and test and measurement customers. For the period from July 22, 2020 to December 31, 2020, the related product lines contributed revenues of $9.9 million and an operating loss of $0.5 million to the Company's consolidated results. The results of operations of the acquired business are reported within the CIT and CFT segments. Consideration of $16.4 million has been allocated to goodwill, $4.3 million to definite-lived intangible assets, $4.9 million to inventory, $2.7 million to accounts receivable and $1.3 million to accounts payable. In accordance with the purchase agreement, Carlisle is indemnified for up to $1.6 million, and recorded an indemnification asset of $1.5 million in other long-term assets, relating to certain pre-acquisition debt and tax withholdings liabilities. During the second quarter of 2021, the pre-acquisition debt of $1.4 million was relieved along with the corresponding indemnification asset. The fair values and weighted average useful lives of the acquired definite-lived intangible assets are as follows: (in millions) Fair Value Weighted Average Useful Life Technologies $ 2.3 9 Customer relationships 1.0 9 Trade names 1.0 5 Total $ 4.3 All of the $16.4 million value allocated to goodwill is deductible for tax purposes. Goodwill of $11.0 million, $2.8 million and $2.6 million has been assigned to the CCM, CIT and CFT reporting units, respectively, which aligns with the reportable segments. 2019 Acquisitions Providien, LLC On November 20, 2019, the Company completed its acquisition of Providien, LLC ("Providien"), for consideration of $331.3 million, including $3.4 million of cash acquired and post-closing adjustments, which were finalized in the first quarter of 2020. The product lines acquired include thermoforming, medical device contract manufacturing, precision machining and metals, and medical injection molding for the global medical device market. For the period from November 20, 2019 to December 31, 2019, the related product lines contributed revenues of $11.3 million and operating income of $0.1 million to the Company's consolidated results. The results of operations of the acquired business are reported as part of the CIT segment. The following table summarizes the consideration transferred to acquire Providien and the allocation of the purchase price among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting which requires that consideration be allocated to the acquired assets and assumed liabilities based upon their acquisition date fair values with the remainder allocated to goodwill. Preliminary Measurement Final (in millions) As of 11/20/2019 As of 11/20/2020 Total cash consideration transferred $ 332.1 $ (0.8) $ 331.3 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 3.4 — 3.4 Receivables, net 9.8 — 9.8 Inventories, net 2.7 (0.3) 2.4 Contract assets 29.1 (4.5) 24.6 Prepaid expenses and other current assets 2.3 (0.9) 1.4 Property, plant and equipment 12.9 — 12.9 Definite-lived intangible assets 135.4 (2.7) 132.7 Other long-term assets 7.1 (0.3) 6.8 Accounts payable (6.0) 0.2 (5.8) Income tax payable (0.7) 0.8 0.1 Accrued and other current liabilities (7.0) — (7.0) Other long-term liabilities (8.1) 1.1 (7.0) Deferred income taxes (27.1) 8.1 (19.0) Total identifiable net assets 153.8 1.5 155.3 Goodwill $ 178.3 $ (2.3) $ 176.0 The goodwill recognized in the acquisition of Providien reflects market participant synergies attributable to significant raw material purchase synergies with CIT, other administrative synergies, the value of the assembled workforce to Carlisle and opportunities for product line expansions. The Company acquired $9.8 million of gross contractual accounts receivable, of which less than $0.1 million was not expected to be collected at the date of acquisition. All of the goodwill has been assigned to the CIT reporting unit, which aligns with the CIT reportable segment. Goodwill totaled $176.0 million, of which $67.5 million is deductible for tax purposes. The fair values and weighted average useful lives of the acquired definite-lived intangible assets are as follows: (in millions) Fair Value Weighted Average Useful Life Customer relationships $ 108.7 14 Technologies 19.5 7 Trade names 4.4 2 Total $ 132.6 The Company has also recorded, as part of the purchase price allocation, deferred tax liabilities related to intangible assets of approximately $19.0 million. Petersen Aluminum Corporation On January 11, 2019, the Company acquired 100% of the equity of Petersen Aluminum Corporation ("Petersen"), for consideration of $207.2 million, including $5.2 million of cash acquired and post-closing adjustments, which were finalized in the first quarter of 2019. The products acquired include architectural metal roof panels, steel and aluminum flat sheets and coils, wall panels, perimeter roof edge systems and related accessories for commercial, residential, institutional, industrial and agricultural markets. For the period from January 11, 2019 to December 31, 2019, the related product lines contributed revenues of $176.2 million and operating income of $9.8 million to the Company's consolidated results. The results of operations of the acquired business are reported as part of the CCM segment. The following table summarizes the consideration transferred to acquire Petersen and the allocation of the purchase price among the assets acquired and liabilities assumed. The acquisition has been accounted for using the acquisition method of accounting, which requires that consideration be allocated to the acquired assets and assumed liabilities based upon their acquisition date fair values with the remainder allocated to goodwill. Preliminary Measurement Final (in millions) As of 1/11/2019 As of 1/11/2020 Total cash consideration transferred $ 207.2 $ — $ 207.2 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 5.2 — 5.2 Receivables, net 11.5 — 11.5 Inventories, net 39.5 (0.3) 39.2 Prepaid expenses and other current assets 2.1 — 2.1 Property, plant and equipment 17.8 — 17.8 Definite-lived intangible assets 109.3 0.8 110.1 Other long-term assets 9.5 — 9.5 Accounts payable (5.9) — (5.9) Income tax payable 1.7 — 1.7 Accrued and other current liabilities (8.7) — (8.7) Other long-term liabilities (12.4) (0.1) (12.5) Deferred income taxes (25.4) (0.2) (25.6) Total identifiable net assets 144.2 0.2 144.4 Goodwill $ 63.0 $ (0.2) $ 62.8 The goodwill recognized in the acquisition of Petersen reflects market participant synergies attributable to significant raw material purchase synergies with CCM, other administrative synergies and the assembled workforce to Carlisle, in addition to opportunities for product line expansions. The Company acquired $11.6 million of gross contractual accounts receivable, of which $0.1 million was not expected to be collected at the date of acquisition. All of the goodwill has been assigned to the CCM reporting unit, which aligns with the CCM reportable segment, and none of the goodwill is deductible for tax purposes. The $110.1 million value allocated to definite-lived intangible assets consists of $79.7 million of customer relationships with a useful life of 11 years, $27.9 million of trade names with a useful life of 17 years and various acquired technologies of $2.5 million with a useful life of 10 years. In accordance with the purchase agreement, Carlisle is indemnified for up to $5.2 million, and recorded an indemnification asset of $5.2 million in other long-term assets relating to the indemnification for pre-acquisition income tax liabilities. The Company released $2.2 million and $3.0 million of the indemnification asset related to escrow expirations in 2021 and 2020, respectively. The Company has also recorded, as part of the purchase price allocation, deferred tax liabilities related to intangible assets of approximately $25.6 million. MicroConnex Corporation On April 1, 2019, the Company acquired 100% of the equity of MicroConnex Corporation for cash consideration of $46.2 million, including $0.8 million of cash acquired and post-closing adjustments, which were finalized in the third quarter of 2019. The acquired product lines include highly engineered microminiature flex circuits and sensors for the medical and test and measurement markets. For the period from April 1, 2019 to December 31, 2019, the related product lines contributed revenues of $10.2 million and operating loss of $0.8 million to the Company's consolidated results. The results of operations of the acquired business are reported within the CIT segment. Consideration of $15.2 million has been allocated to goodwill, $27.4 million to definite-lived intangible assets, $0.9 million to inventory, $3.4 million to accounts receivable, $0.6 million to accounts payable and $7.0 million to deferred income taxes. Definite-lived intangible assets consist of customer relationships with a useful life of 12 years, trade names with a useful life of 17 years and acquired technologies with a useful life of five years. None of the $15.2 million allocated to goodwill is deductible for tax purposes. All of the goodwill has been assigned to the CIT reporting unit, which aligns with the reportable segment. Prior Acquisition Matters Accella Holdings LLC In conjunction with the November 2017 acquisition of Accella Holdings LLC, the parent company to Accella Performance Materials Inc., the Company recorded an indemnification asset of $15.6 million for certain pre-acquisition liabilities, principally related to direct and indirect tax uncertainties. During 2021, 2020 and 2019, $0.8 million, $4.7 million and $1.9 million, respectively, of the tax uncertainties were resolved, resulting in the reversal of the related indemnification assets and corresponding liabilities. During 2021, the Company released the remaining $1.4 million of the indemnification asset related to escrow expirations. |