DELPHI 2012 Annual Report Download - page 125

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18. ACQUISITIONS AND DIVESTITURES
Acquisition of Motorized Vehicles Division of FCI
On October 26, 2012, Delphi acquired 100% of the equity interests of MVL for €765 million, or approximately $1 billion
based on exchange rates on the acquisition date. MVL, a leading global manufacturer of automotive connection systems with a
focus on high-value, leading technology applications, is based in Guyancourt, France, had 2011 sales of €692 million
(approximately 12% to Delphi that will be eliminated on a consolidated basis) and global operations.
Upon completing the acquisition, Delphi incurred related transaction expenses totaling approximately $13 million, which
were recorded in other expenses in the statement of operations. The cash payments required to close the transaction were
funded using existing cash on hand, including $363 million drawn under the Credit Agreement and additional European
factoring.
The acquisition was accounted for as a business combination, with the purchase price allocated on a preliminary basis
using information available, in the fourth quarter of 2012. The preliminary purchase price and related allocation are shown
below (in millions):
Assets acquired and liabilities assumed
Purchase price, net of cash acquired $ 980
Property, plant and equipment $ 254
Intangible assets 279
Other assets purchased and liabilities assumed, net (7)
Identifiable net assets acquired 526
Goodwill resulting from purchase 454
Total preliminary purchase price allocation $ 980
Intangible assets include estimated amounts recognized for the fair value of customer-based and technology-related
assets. It is currently estimated that these intangible assets have a weighted average useful life of approximately 12 years. The
valuation of the intangible assets acquired was based on management's estimates, available information, and reasonable and
supportable assumptions. The fair value of these assets was generally estimated based on utilizing income and market
approaches.
The purchase price and related allocation 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 operating results of MVL were 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.
Sale of Italian Thermal Special Application Business
On April 30, 2012, Delphi completed the sale of its Thermal Special Application business located in Italy. The net sales
of this business were approximately $23 million for the period from January 1 to April 30, 2012. Delphi received net proceeds
of $14 million from the sale and recognized a gain on divestiture of $4 million, which is included in cost of sales in the
consolidated statement of operations for the year ended December 31, 2012. The results of operations, including the gain on
divestiture were not significant to the consolidated financial statements in any period presented, and the divestiture did not meet
the discontinued operations criteria.
Purchase of Noncontrolling Interest in JV
In February 2012, Delphi’s Powertrain segment completed the acquisition of the remaining ownership interest in a
majority-owned joint venture for a purchase price of $16 million. The acquisition was not material to the Company’s
consolidated financial statements. Delphi previously had effective control of the joint venture and consolidated its results. The
acquisition resulted in the elimination of the non-controlling interest.