v3.26.3
Acquisitions
 12 Months Ended
Sep. 30, 2026
Business Combination [Abstract]  
Acquisitions Acquisitions
2024 Acquisitions
In October 2023, we acquired Clearpath Robotics, Inc., including its industrial division OTTO Motors (Clearpath), a company that specializes in autonomous robotics for industrial applications, headquartered in Ontario, Canada. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of October 2, 2023. The aggregate purchase price allocation is as follows (in millions):
Purchase Price Allocation
Receivables$8 
Inventory22 
Goodwill 283 
Intangible assets313 
All other assets11 
Total assets acquired637 
Less: Deferred tax liability(9)
Less: Liabilities assumed(19)
Net assets acquired$609 
Purchase Consideration
Cash consideration, net of cash acquired$566 
Contingent consideration43 
Total purchase consideration, net of cash acquired$609 
Intangible assets identified include $270 million of technology, $41 million of trademarks, and $2 million of customer relationships. We assigned the full amount of goodwill and all other assets acquired to our Intelligent Devices segment. The goodwill recorded represents intangible assets that do not qualify for separate recognition. This goodwill arises because the purchase price for Clearpath reflects a number of factors including the future earnings and cash flow potential for the business and resulting synergies from the business portfolio and industry expertise. The goodwill is not deductible for tax purposes. The intangible assets were valued using an income approach, specifically the relief from royalty method and multi-period excess earnings method. The relief from royalty method calculates value based on hypothetical payments that would be saved by owning an asset rather than licensing it. The multi-period excess earnings method is the isolation of cash flows from a single intangible asset and measures fair value by discounting them to present value. These values are considered level 3 measurements under the U.S. GAAP fair value hierarchy. Refer to Note 1 for further information regarding levels in the fair value hierarchy. The key assumption requiring the use of judgement in the valuation of the technology asset was the obsolescence factor, where we estimated a phase out over 12 years; other assumptions included forecasted revenue growth rates and margin and the discount rate. The key assumption requiring the use of judgement in the valuation of the trademarks asset was the weighted average royalty rate of 2.05 percent; other assumptions included forecasted revenue growth rates and the discount rate.
The purchase price included up to $50 million in contingent consideration that can be earned by sellers if Clearpath achieves revenue targets that it had established prior to the acquisition in two performance periods ending February 29, 2024, and February 28, 2025. We developed various risk-based scenarios and a probability outcome model to measure the fair value of the contingent consideration. We determined the fair value to be $43 million as of the acquisition date, which is considered a level 3 measurement under the U.S. GAAP fair value hierarchy. We updated the fair value measures quarterly during the performance periods to reflect actual contingent consideration earned.
The following table presents the fair value of the contingent consideration in the Consolidated Balance Sheet (in millions):
Period ended February 29, 2024Period ended February 28, 2025Total
Contingent consideration as of December 31, 2023$17 $26 $43 
Adjustment for earnout achieved for first performance period(7)— (7)
Adjustment to fair value— (21)(21)
Payment of earnout achieved for first performance period(10)— (10)
Contingent consideration as of September 30, 2024$— $5 $5 
Adjustment for earnout forfeited for second performance period— (5)(5)
Contingent consideration as of September 30, 2025$— $— $— 
No consideration was earned or paid for the second performance period. The consideration for the amount earned for the first performance period was paid during the third quarter of 2024.
In November 2023, we acquired Verve Industrial Protection (Verve), a cybersecurity software and services company that focuses specifically on industrial environments. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of November 1, 2023. The aggregate purchase price allocation is as follows (in millions):
Purchase Price Allocation
Receivables$8 
Goodwill 133 
Intangible assets47 
All other assets1 
Total assets acquired189 
Less: Liabilities assumed(6)
Net assets acquired$183 
Purchase Consideration
Total purchase consideration, net of cash acquired$183 
We assigned the full amount of goodwill to our Lifecycle Services segment. We expect the goodwill to be deductible for tax purposes. The goodwill recorded represents intangible assets that do not qualify for separate recognition.
Pro forma consolidated sales for the year ended September 30, 2024, were $8.3 billion, and the impact on earnings was not material. The preceding pro forma consolidated financial results of operations are as if the preceding 2024 acquisitions occurred on October 1, 2023. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the transaction occurred as of that time.
Total sales from all of the above 2024 acquisitions in the year ended September 30, 2024, were $84 million. Total acquisition-related costs from all of the above 2024 acquisitions in the year ended September 30, 2024, were not material. Net losses from all of the above 2024 acquisitions in the year ended September 30, 2024, were $53 million.