DELPHI 2015 Annual Report Download - page 138

Table of Contents
116
20. ACQUISITIONS AND DIVESTITURES
Acquisition of HellermannTyton Group PLC
On December 18, 2015, pursuant to the terms of a recommended offer made on July 30, 2015, Delphi completed the
acquisition of 100% of the issued ordinary share capital of HellermannTyton Group PLC ("HellermannTyton"), a public limited
company based in the United Kingdom, and a leading global manufacturer of high-performance and innovative cable
management solutions. Delphi paid 480 pence per HellermannTyton share, totaling approximately $1.5 billion in aggregate, net
of cash acquired. Approximately $242 million of HellermannTyton outstanding debt to third-party creditors was assumed and
subsequently paid off.
HellermannTyton had 2014 sales of approximately €600 million (approximately 6% of which were to Delphi and will be
eliminated on a consolidated basis). Upon completing the acquisition, Delphi incurred transaction related expenses totaling
approximately $23 million, which were recorded within other income (expense), net in the statement of operations.
The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary
basis using information available, in the fourth quarter of 2015. The preliminary purchase price and related allocation to the
acquired net assets of HellermannTyton based on their estimated fair values is shown below (in millions):
Assets acquired and liabilities assumed
Purchase price, cash consideration, net of cash acquired....................................................................................... $ 1,534
Debt and pension liabilities assumed ..................................................................................................................... 258
Total consideration, net of cash acquired .......................................................................................................... $ 1,792
Property, plant and equipment................................................................................................................................ $ 333
Indefinite-lived intangible assets............................................................................................................................ 128
Definite-lived intangible assets .............................................................................................................................. 554
Other liabilities, net ................................................................................................................................................ (79)
Identifiable net assets acquired.......................................................................................................................... 936
Goodwill resulting from purchase.......................................................................................................................... 856
Total purchase price allocation.......................................................................................................................... $ 1,792
Goodwill recognized in this transaction is primarily attributable to synergies expected to arise after the acquisition and
the assembled workforce of HellermannTyton, and is not deductible for tax purposes. Intangible assets primarily include $128
million recognized for the fair value of the acquired trade name, which has an indefinite useful life, $451 million of customer-
based assets with approximate useful lives of 13 years and $103 million of technology-related assets with approximate useful
lives of 13 years. The valuation of the intangible assets acquired was based on third-party valuations, management's estimates,
available information and reasonable and supportable assumptions. The fair value of the acquired trade name and the
technology-related assets was generally estimated utilizing the relief from royalty method under the income approach, and the
fair value of customer-based assets was generally estimated utilizing the multi-period excess earnings method.
The purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the
purchase price, additional information obtained regarding liabilities assumed, including, but not limited to, contingent
liabilities, revisions of provisional estimates of fair values, including, but not limited to, the completion of independent
appraisals and valuations related to property, plant and equipment and intangible assets, and certain tax attributes.
The results of operations of HellermannTyton are reported within the Electrical/Electronic Architecture segment from the
date of acquisition. The pro forma effects of this acquisition would not materially impact the Company's reported results for
any period presented, and as a result no pro forma financial statements were presented.
Acquisition financing
Delphi financed the cash payment required to close the acquisition of HellermannTyton primarily with the net proceeds
received from the offering of $1.3 billion of 2015 Senior Notes, as further described in Note 11. Debt, with the remainder of the
purchase price funded with cash on hand that was received from the sale of the Company's Thermal Systems business, as
further described below. Prior to the transaction closing, in connection with the offer to acquire HellermannTyton in July 2015,
£540 million ($844 million using July 30, 2015 foreign currency rates) was placed on deposit for purposes of satisfying a
portion of the consideration required to effect the acquisition.