DELPHI 2015 Annual Report Download - page 139

Table of Contents
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Prior to the issuance of the 2015 Senior Notes, in connection with the offer to acquire HellermannTyton, on July 30,
2015, Delphi Automotive PLC and certain of its subsidiaries, certain financial institutions from time to time party thereto, as
lenders and Barclays Bank PLC, as administrative agent, entered into a Senior Bridge Credit Agreement (the "Senior Bridge
Credit Agreement"), pursuant to which the lenders thereunder agreed to provide a £550 million bridge term loan facility. The
Senior Bridge Credit Agreement was automatically terminated on November 19, 2015 in connection with the issuance of the
2015 Senior Notes, and unamortized issuance costs of $6 million associated with the Senior Bridge Credit Agreement were
written-off to other income (expense), net. The Company did not draw on the Senior Bridge Credit Agreement.
Exit of Argentina Businesses
On December 10, 2015, Delphi completed the exit of its Electronics business located in Argentina, which was previously
reported within the Electronics and Safety segment. The net sales of this business in 2015 prior to the divestiture were
approximately $34 million. Delphi recognized a pre-tax loss on the divestiture of this business of $33 million within cost of
sales, which included a cash payment by Delphi to the buyer of $7 million.
On April 21, 2015, Delphi completed the exit of its Electrical Wiring business located in Argentina, which was previously
reported within the Electrical/Electronic Architecture segment. Delphi recognized a pre-tax loss on the divestiture of this
business of $14 million within cost of sales, which included a cash payment by Delphi to the buyer of $7 million.
The results of operations of these businesses, including the losses on divestiture, were not significant to the consolidated
financial statements for any period presented, and the disposals did not meet the discontinued operations criteria.
Acquisition of Control-Tec LLC
On November 30, 2015, Delphi acquired 100% of the equity interests of Control-Tec LLC ("Control-Tec"), a leading
provider of telematics and cloud-hosted data analytics solutions, for a purchase price of $104 million at closing and an
additional cash payment of up to $40 million contingent upon the achievement of certain financial performance metrics over a
future 3-year period. The range of the undiscounted amounts the Company could be required to pay under this arrangement is
between $0 and $40 million. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of
approximately $20 million. Refer to Note 18. Fair Value of Financial Instruments for additional information regarding the
measurement of the contingent consideration liability. The results of operations of Control-Tec are reported within the
Electronics and Safety segment from the date of acquisition. The Company acquired Control-Tec utilizing cash on hand.
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 Control-Tec based on their estimated fair values is shown below (in millions):
Assets acquired and liabilities assumed
Purchase price, cash consideration, net of cash acquired....................................................................................... $ 104
Purchase price, fair value of contingent consideration .......................................................................................... 20
Total purchase price, net of cash acquired......................................................................................................... $ 124
Intangible assets ..................................................................................................................................................... $ 66
Other assets, net...................................................................................................................................................... 4
Identifiable net assets acquired.......................................................................................................................... 70
Goodwill resulting from purchase.......................................................................................................................... 54
Total purchase price allocation.......................................................................................................................... $ 124
Intangible assets primarily include amounts recognized for the fair value of the acquired trade name as well as customer-
based and technology-related assets, and will be amortized over their estimated useful lives of approximately 10 years. The fair
value of these assets was based on third-party valuations and management's estimates, generally utilizing income and market
approaches.
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 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.