Quarterly report pursuant to Section 13 or 15(d)

Acquisitions (Details)

v3.22.2.2
Acquisitions (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Oct. 04, 2021
Oct. 01, 2022
Oct. 02, 2021
Oct. 01, 2022
Oct. 02, 2021
May 10, 2022
Dec. 31, 2021
Dec. 31, 2020
Business Combinations [Abstract]                
Business Combination Disclosure [Text Block]   Acquisitions
2022 Acquisitions

During the second quarter of 2022, the Company acquired certain Freedom Boat Club franchise operations and territory rights as well as certain marine assets in the Southeast United States. These acquisitions enable opportunities across a wide spectrum, building upon the growth Brunswick has cultivated throughout the Company's shared access portfolio and new digital platforms. These acquisitions are included as part of the Company's Boat segment.

The Company paid net cash consideration of $95.7 million for these acquisitions. The opening balance sheets, which are preliminary and subject to change in the measurement period as the Company finalizes the purchase price allocation and fair value estimates, include $75.0 million of goodwill and $11.9 million of customer relationships. The amount assigned to customer relationships will be amortized over the estimated useful life of 10 years. Transaction costs associated with these acquisitions of $1.3 million were expensed as incurred within Selling, general and administrative expense during the nine months ended October 1, 2022. The acquisitions are not material to the Company's net sales, results of operations, or total assets during any period presented. Accordingly, the Company's consolidated results of operations do not differ materially from historical performance as a result of the acquisitions, and pro forma results are not presented.

2021 Acquisitions

On October 4, 2021, the Company acquired all the issued and outstanding shares of Navico, for $1.094 billion net cash consideration. The Company used a combination of the notes issued in the third quarter of 2021 and cash on hand to fund the acquisition.

Navico was a privately held global company based in Egersund, Norway, and is a global leader in marine electronics and sensors, including multi-function displays, fish finders, autopilots, sonar, radar, and cartography. The acquisition of Navico accelerates the Company's ACES ("Autonomy, Connectivity, Electrification, and Shared access") strategy and strengthens the Company's ability to provide complete, innovative digital solutions to consumers and comprehensive, integrated system offerings to the Company's original equipment manufacturer customers. Navico is managed as part of the Company's Parts & Accessories segment.

The Company used the acquisition method of accounting in accordance with ASC 805, Business Combinations, with Brunswick being the acquiring entity, and reflecting estimates and assumptions deemed appropriate by Company management.
The purchase price allocation for certain deferred tax balances and contingency reserves is preliminary and subject to change within the allowed measurement period as the Company finalizes its fair value estimates. The following table is a summary of the assets acquired, liabilities assumed and net cash consideration paid, net of cash acquired, for the Navico acquisition:

(in millions) Fair Value Useful Life
Accounts and notes receivable $ 59.3 
Inventory 161.7 
Goodwill (A) (B)
438.8 
Trade names 133.0  Indefinite
Developed technology 160.0  15 years
Customer relationships 185.0  15 years
Property and equipment 46.1 
Other assets 26.9 
Total assets acquired 1,210.8 
Accounts payable 66.0 
Accrued expenses (B)
48.4 
Other liabilities 24.0 
Total liabilities assumed 138.4 
Net cash consideration paid, net of cash acquired $ 1,072.4 

(A) The goodwill recorded for the acquisition of Navico is partially deductible for tax purposes.
(B) Includes $3.3 million of purchase accounting adjustments for the nine months ended October 1, 2022 related to contingency reserves.

Pro Forma Financial Information (Unaudited)

The pro forma information has been prepared as if the Navico acquisition and the related debt financing had occurred on January 1, 2021. These pro forma results are based on estimates and assumptions which the Company believes to be reasonable. They are not the results that would have been realized had the acquisition actually occurred on January 1, 2021 and are not necessarily indicative of Brunswick's consolidated net earnings in future periods. The pro forma results include adjustments primarily related to the amortization of intangible assets and interest expense on the notes issued in the third quarter of 2021. Additionally, non-recurring pro forma adjustments include transaction costs of $14.8 million and expenses related to inventory fair value adjustments of $18.1 million for the nine months ended October 2, 2021, recognized as part of the application of purchase accounting.

(in millions)
Three Months Ended
Nine Months Ended
October 1, 2022

October 2, 2021

October 1, 2022

October 2, 2021
Pro forma Net sales $ 1,698.2  $ 1,530.1  $ 5,229.5  $ 4,787.7 
Pro forma Net earnings 163.8  134.3  543.2  488.1 

The pro forma results reflect a statutory income tax rate of 21 percent for the three and nine months ended October 1, 2022 and October 2, 2021.
Other 2021 Acquisitions

On September 1, 2021, the Company acquired substantially all the net assets of RELiON Battery, LLC ("RELiON"). RELiON is a global provider of lithium batteries and related products to multiple industry sectors. The acquisition of RELiON complements the Company's existing portfolio of advanced battery and power management brands. On September 17, 2021, the Company acquired substantially all the net assets of SemahTronix, LLC, a global supplier of high-complexity electrical wiring harnesses for advanced products in the marine, mobile, and defense industries. The acquisition of the SemahTronix assets enhances the Company's integrated systems offerings by providing the Company and the Company's global customers access to high-quality, large, complex electrical wire harnessing systems that further enable the Company's end-to-end systems solutions and capabilities. These acquisitions are included as part of the Parts & Accessories segment. Purchase accounting was finalized for these acquisitions as of October 1, 2022.

On July 9, 2021, the Company acquired Fanautic Club, one of the largest European boat clubs with 23 locations in major coastal cities and tourist centers across Spain. Purchase accounting was finalized for this acquisition as of October 1, 2022. The Company also acquired certain Freedom Boat Club franchise operations and territory rights in the United States during 2021. Acquiring such assets enables Brunswick to accelerate growth by increasing its investments in these markets. These acquisitions are included as part of the Boat segment.

The Company paid net cash consideration of $66.2 million for these acquisitions. The opening balance sheets include $36.9 million of goodwill and $24.1 million of identifiable intangible assets, including customer relationships and trade names of $17.2 million and $6.9 million, respectively. The amount assigned to customer relationships will be amortized over the estimated useful life of 10 years. These acquisitions are not material to the Company's net sales, results of operations or total assets during any period presented. Accordingly, the Company's consolidated results of operations do not differ materially from historical performance as a result of the acquisitions, and pro forma results are not presented.
            
Business Acquisition [Line Items]                
Business Acquisition, Pro Forma Information      
The pro forma information has been prepared as if the Navico acquisition and the related debt financing had occurred on January 1, 2021. These pro forma results are based on estimates and assumptions which the Company believes to be reasonable. They are not the results that would have been realized had the acquisition actually occurred on January 1, 2021 and are not necessarily indicative of Brunswick's consolidated net earnings in future periods. The pro forma results include adjustments primarily related to the amortization of intangible assets and interest expense on the notes issued in the third quarter of 2021. Additionally, non-recurring pro forma adjustments include transaction costs of $14.8 million and expenses related to inventory fair value adjustments of $18.1 million for the nine months ended October 2, 2021, recognized as part of the application of purchase accounting.

(in millions)
Three Months Ended
Nine Months Ended
October 1, 2022

October 2, 2021

October 1, 2022

October 2, 2021
Pro forma Net sales $ 1,698.2  $ 1,530.1  $ 5,229.5  $ 4,787.7 
Pro forma Net earnings 163.8  134.3  543.2  488.1 
The pro forma results reflect a statutory income tax rate of 21 percent for the three and nine months ended October 1, 2022 and October 2, 2021. 		       
Business Combination, Consideration Transferred         $ 66.2      
Goodwill   $ 962.2 $ 443.8 $ 962.2 $ 443.8   $ 888.4 $ 417.7
Customer Relationships   $ 24.1   $ 24.1        
Effective Tax Rate From Continuing Operations   21.70% 21.20% 21.60% 22.30%      
Goodwill, Purchase Accounting Adjustments   $ 3.9            
Business Combination, Acquisition Related Costs   0.0 $ (4.0) $ 0.0 $ (4.0)      
Goodwill, Translation and Purchase Accounting Adjustments       3.3        
Amortization Expense for Intangibles   15.9 8.3 47.2 24.3      
Interest Expense   26.1 16.9 70.4 47.1      
Freedom Boat Club Franchises                
Business Acquisition [Line Items]                
Business Combination, Consideration Transferred   95.7            
Goodwill           $ 75.0    
Freedom Boat Club Franchises | Selling, General and Administrative Expenses [Member]                
Business Acquisition [Line Items]                
Business Acquisition, Transaction Costs   1.3   1.3        
Navico                
Business Acquisition [Line Items]                
Business Combination, Consideration Transferred $ 1,094.0              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables 59.3              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory 161.7              
Goodwill [1],[2] 438.8              
Trade Names 133.0              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment 46.1              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets 26.9              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets 1,210.8              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable 66.0              
Accrued Expenses [2] 48.4              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other 24.0              
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities 138.4              
Payments to Acquire Businesses, Net of Cash Acquired       1,072.4        
Business Acquisition, Pro Forma Revenue   1,698.2 1,530.1 5,229.5 4,787.7      
Business Acquisition, Pro Forma Net Income (Loss)   163.8 $ 134.3 $ 543.2 $ 488.1      
Effective Tax Rate From Continuing Operations       21.00% 21.00%      
Business Combination, Acquisition Related Costs         $ 14.8      
Business Combination, Separately Recognized Transactions, Fair Value Adjustment for Inventory         $ 18.1      
Goodwill                
Business Acquisition [Line Items]                
Customer Relationships   36.9   $ 36.9        
Technology-Based Intangible Assets | Navico                
Business Acquisition [Line Items]                
Customer Relationships 160.0              
Useful Life       15 years        
Customer Relationships [Member]                
Business Acquisition [Line Items]                
Customer Relationships   17.2   $ 17.2        
Customer Relationships [Member] | Freedom Boat Club Franchises                
Business Acquisition [Line Items]                
Business Combination, Consideration Transferred   11.9            
Useful Life       10 years        
Customer Relationships [Member] | Navico                
Business Acquisition [Line Items]                
Customer Relationships $ 185.0              
Useful Life       15 years        
Trade Names [Member]                
Business Acquisition [Line Items]                
Customer Relationships   $ 6.9   $ 6.9        
[1] (A) The goodwill recorded for the acquisition of Navico is partially deductible for tax purposes.
[2] (B) Includes $3.3 million of purchase accounting adjustments for the nine months ended October 1, 2022 related to contingency reserves.