Zebra Technologies (ZBRA) Offers Additional Detail on WLAN Business Sale
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Zebra Technologies (NASDAQ: ZBRA) disclosed the following in a U.S. SEC filing on Tuesday:
Item 2.06. Material Impairments.
As previously announced on September 14, 2016, Zebra Technologies (the “Company”) entered into a definitive agreement to sell its wireless LAN (WLAN) business to Extreme Networks, Inc. for gross proceeds of $55 million. The sale is expected to close in the fourth quarter of 2016 subject to customary conditions and regulatory approvals. Management of the Company determined that assets related to WLAN are required to be classified as assets held for sale. As a result, the assets related to WLAN will be reflected on the Company’s consolidated balance sheet at the lower of the net assets carrying value or fair value less cost to sell. The Company is in the process of evaluating the accounting for disposition, but the Company currently expects to record a non-cash pre-tax charge in the range of approximately $65 - $80 million. Such estimated amount includes an impairment of long-lived assets, primarily allocated intangibles and goodwill. The Company will reflect the amount of the non-cash charge in its third quarter financial results. In addition, the Company is unable at this time to determine the size or impact of income tax consequences related to the transaction.
The Company will fully describe and disclose the amount of the non-cash charge in its Quarterly Report on Form 10-Q for the third quarter of 2016.
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