Acquisitions

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

ACQUISITIONS

WISETEK

On September 20, 2024, in order to further expand our asset lifecycle management ("ALM") business, we acquired 100% of Wisetek Solutions Limited ("Wisetek"), an information technology ("IT") asset disposition services provider offering services across the globe with operations facilities in the United States, Ireland, the United Kingdom and Thailand, for (i) cash consideration of approximately 46,600 Euros (or approximately $51,900, based upon the exchange rate between the Euro and the United States dollar on the closing date of this acquisition), subject to adjustments, and (ii) up to 4,200 Euros (or approximately $4,700, based upon the exchange rate between the Euro and the United States dollar as of September 30, 2024) of additional consideration, payable based on the achievement of certain gross profit targets through September 2026.

REGENCY TECHNOLOGIES

On January 3, 2024, in order to expand our ALM business, we acquired 100% of RSR Partners, LLC (doing business as Regency Technologies), an IT asset disposition services provider with operations throughout the United States, for an initial purchase price of approximately $200,000, subject to certain working capital adjustments at, and subsequent to, the closing, with $125,000 paid at closing, funded by borrowings under the Revolving Credit Facility (as defined in Note 6), and the remaining $75,000 (the “January 2025 Payment”) to be paid in January 2025 (the "Regency Transaction"). The present value of the January 2025 Payment is included as a component of Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheet at September 30, 2024. The agreement for the Regency Transaction also includes a performance-based contingent consideration with a potential earnout range from zero to $200,000 based upon achievement of certain three-year cumulative revenue targets, which would be payable in 2027, if earned (the “Regency Deferred Purchase Obligation”). The preliminary fair value estimate of the Regency Deferred Purchase Obligation as of the acquisition date was approximately $78,400. See Note 2.e. for details on the methodology used to establish the fair value. The fair value of the Regency Deferred Purchase Obligation is included as a component of Other long-term liabilities in our Condensed Consolidated Balance Sheet at September 30, 2024. Subsequent increases or decreases in the fair value estimate of the Regency Deferred Purchase Obligation, as well as the accretion of the discount to present value, is included as a component of Other expense (income), net in our Condensed Consolidated Statements of Operations until the deferred purchase obligation is settled or paid. Subsequent to the acquisition, the results of Regency Technologies are included as a component of Corporate and Other.

PRELIMINARY PURCHASE PRICE ALLOCATION

A summary of the cumulative consideration paid and the preliminary allocation of the purchase price paid for our acquisitions closed during the nine months ended September 30, 2024 is as follows:


	NINE MONTHS ENDED SEPTEMBER 30, 2024
Cash Paid (gross of cash acquired)	$	184,777
Deferred Purchase Obligations, Purchase Price Holdbacks and Other(1)	133,813



Total Consideration	318,590
Fair Value of Identifiable Assets Acquired(2)	212,826






Fair Value of Identifiable Liabilities Acquired	(62,525)
Goodwill Initially Recorded(3)	$	168,289

(1)Consists of the acquisition-date fair values of the Regency Deferred Purchase Obligation and the January 2025 Payment.

(2)Assets acquired include supplier relationship intangible assets, with a total fair value of approximately $131,000 and a weighted average life of approximately 18 years.

(3)Goodwill is primarily attributable to the assembled workforce, expanded market opportunities and costs and other operating synergies anticipated upon the integration of the operations of us and the acquired businesses.

The preliminary purchase price allocations that are not finalized as of September 30, 2024 relate to the final assessment of the fair values of the assets acquired and the fair value of the deferred purchase obligation, which may differ materially from these preliminary estimates associated with the acquisitions closed during the nine months ended September 30, 2024. Any adjustments to our estimates of purchase price allocations will be made in the periods in which the adjustments are determined, and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. Purchase price allocation adjustments recorded during the nine months ended September 30, 2024 were not material to our balance sheet or results from operations.

PRIOR YEAR ACQUISITION UPDATE

On July 1, 2024, we entered into an agreement with the minority shareholders of Web Werks India Private Limited to acquire the remaining approximately 36.61% interest in the Web Werks JV (as defined in Note 5 to Notes to Consolidated Financial Statements included in our Annual Report) in two separate transactions. As a result of the agreement, during the three months ended September 30, 2024, we recognized a charge of approximately $29,200, which is included as a component of Other expense (income), net in our Condensed Consolidated Statements of Operations. On July 5, 2024, we completed the acquisition of an approximately 8.55% interest in the Web Werks JV (“Tranche I”) for approximately 3,000,000 Indian rupees (or approximately $35,000, based upon the exchange rate between the United States dollar and the Indian rupee on the closing date of Tranche I). Subsequent to the Tranche I payment, our ownership interest in the Web Werks JV is approximately 71.94%. In March 2025, we will be required to make an additional payment of approximately 9,600,000 Indian rupees (or approximately $114,600, based upon the exchange rate between the United States dollar and the Indian rupee as of September 30, 2024) to acquire the remaining approximately 28.06% interest in the Web Werks JV ("Tranche II"). As part of the Tranche II payment in March 2025, we may also make an incremental payment of approximately 1,000,000 Indian rupees (or approximately $11,900, based upon the exchange rate between the United States dollar and the Indian rupee as of September 30, 2024) (the "Incremental Payment") if certain infrastructure goals are achieved before December 31, 2024. The liability associated with Tranche II and our current estimate of the Incremental Payment is included within Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheet at September 30, 2024.