Divestiture Activities |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations |
Note 5. Divestiture Activities
During the fourth quarter of fiscal 2017, the Company signed a definitive agreement to sell the Viking business (Energy segment) for $12 million, net of estimated transaction costs and working capital adjustment. The divestiture results in the Company's exit from the offshore mooring market and significantly limits our exposure to upstream, offshore oil & gas. As a result, the Company recognized impairment and other divestiture charges in fiscal 2017 of $117.0 million, comprised of: (i) $28.6 million cash charge related to the operating lease buyout of certain rental assets; (ii) non-cash impairment charge of $85.1 million representing the excess of the net book value of assets held for sale to the anticipated proceeds which includes $69.0 million related to the recognition in earnings of the cumulative effect of foreign currency rate changes since acquisition and (iii) $3.3 million of other divestiture charges. The write down of net assets generated an income tax benefit of $8.1 million in fiscal 2017; see Note 12, “Income Taxes” for further discussion.
The following is a summary of the assets and liabilities held for sale of the Viking business (in thousands):
The results of the Viking business (which had net sales of $18.7 million and operating loss of $11.7 million in fiscal 2017) are not material to the consolidated financial results and are included in continuing operations. The sale transaction is expected to close in the first half of fiscal 2018 (pending regulatory and governmental approvals) and we anticipate recognizing an additional $15.0 million to $20.0 million in after tax product line disposal charges upon closing.
On August 25, 2016, the Company completed the divestiture of its Sanlo business (Engineered Solutions segment) for $9.7 million in cash, net of transaction costs. This divestiture resulted in a $5.1 million pre-tax loss, but a $1.6 million gain net of tax. The results of the Sanlo business (which had net sales of $10.8 million and $12.4 million in fiscal 2016 and 2015, respectively) are not material to the consolidated financial results and are included in continuing operations.
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