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Business combinations | 3 Months Ended
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Mar. 31, 2022
Business combinations |
Business combinations | 5. Business combinations ​
(a) | SmartEquip acquisition
On November 2, 2021, the Company acquired all of the issued and outstanding common shares of SmartEquip for a total cash purchase price of $173,743,000. During the first quarter of 2022, the Company finalized the net working capital adjustment under the purchase agreement and increased the purchase price by $63,000, resulting in a total purchase price of $173,806,000. SmartEquip is an innovative technology platform that supports customers' management of the equipment lifecycle and integrates parts procurement with both original equipment manufacturers and dealers. ​ The acquisition was accounted for in accordance with ASC 805, Business Combinations. The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed. ​ SmartEquip purchase price allocation ​
​ | ​ | ​ | ​
Purchase price | ​ | $ | 173,806
​ | ​ |  |
Assets acquired: | ​ |  |
Cash and cash equivalents | ​ | $ | 2,039
Trade and other receivables | ​ |  | 2,926
Other current assets | ​ | ​ | 486
Property, plant and equipment | ​ |  | 120
Other non-current assets | ​ |  | 75
Deferred tax assets | ​ |  | 8,932
Intangible assets | ​ |  | 71,700
​ | ​ |  |
Liabilities assumed: | ​ |  |
Trade and other liabilities | ​ |  | 1,239
Deferred revenue | ​ | ​ | 3,565
Other non-current liabilities | ​ | ​ | 119
Deferred tax liabilities | ​ |  | 18,192
​ | ​ | ​ | ​
Fair value of identifiable net assets acquired | ​ |  | 63,163
Goodwill acquired on acquisition | ​ | $ | 110,643
​ The deferred tax assets are presented net of a $1,486,000 valuation allowance. ​ The following table summarizes the fair values of the identifiable intangible assets acquired: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair value | ​ | Weighted average
Asset | ​ | at acquisition | ​ | amortization period
Customer relationships | ​ | $ | 50,700 | ​ | 4 - 15 years
Software and technology assets | ​ | ​ | 18,900 | ​ | 7 years
Trade names and trademarks | ​ | ​ | 1,000 | ​ | 3 years
Backlog | ​ | ​ | 1,100 | ​ | 2 years
Total | ​ | $ | 71,700 | ​ | 11.3 years
​ ​ 5. Business combinations (continued) ​ SmartEquip purchase price allocation (continue) ​ The amounts included in the SmartEquip provisional purchase price allocation are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed at the date of the acquisition. The final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the acquisition date. Adjustments to the preliminary values during the measurement period may impact the amounts recorded as assets and liabilities with a corresponding adjustment to goodwill and will be recognized in the period in which the adjustments are determined. ​ Goodwill ​ Goodwill has been assigned and allocated to “Other” for segmented information purposes and is based on an analysis of the fair value of net assets acquired. Goodwill relates to benefits expected from the acquisition of SmartEquip’s business, its assembled workforce and associated technical expertise, as well as anticipated synergies from applying the Company’s auction expertise and transactional capabilities to SmartEquip’s existing customer base. The transaction is considered a non-taxable business combination and the goodwill is not deductible for tax purposes. ​ Transactions recognized separately from the acquisition of assets and assumptions of liabilities ​ At the date of acquisition, the Company issued 63,971 common shares to certain previous shareholders of SmartEquip in return for their continuing employment service. The common shares are expected to vest one third on each anniversary date of the acquisition over a three-year period as continuing employment services are provided to the Company. At the date of acquisition, the Company estimated that it will recognize a total fair value of $4,375,000 share-based continuing employment costs in acquisition-related costs over the vesting period, with an increase to additional paid-in capital, subject to continuing employment of those individuals. As and when the common shares vest, the Company will recognize the fair value of the issued common shares from additional paid-in capital to share capital (Note 19). During the quarter ended March 31, 2022, the Company recorded $1,175,000 acquisition-related costs for legal, advisory, integration and other professional fees, which included $659,000 of share-based continuing employment costs.
(b) | Euro Auctions acquisition
On August 9, 2021, the Company entered into a Sale and Purchase Agreement (“SPA”) pursuant to which it agreed to purchase Euro Auctions Limited, William Keys & Sons Holdings Limited, Equipment & Plant Services Ltd, and Equipment Sales Ltd. (collectively, “Euro Auctions”), each being a private limited company incorporated in Northern Ireland (the “Euro Auctions Acquisition”). ​ Under the terms of the SPA, the Company was to acquire all of the outstanding shares of Euro Auctions from their existing shareholders for approximately £775,000,000 (approximately $1.02 billion) cash consideration, to be paid on closing. The Euro Auctions acquisition is subject to regulatory clearances and the satisfaction of other customary closing conditions, including obtaining of antitrust clearance in the United Kingdom. On March 4, 2022, the Company was notified that the United Kingdom Competition and Markets Authority (“CMA”) intended to refer the proposed acquisition to a Phase 2 review process. On April 29, 2022, the Company made a decision that it is discontinuing the Phase 2 review by the CMA. The SPA will automatically terminate on June 28, 2022. (Note 24). As a result of the Company’s decision that it is discontinuing the Phase 2 review by the CMA, the Company redeemed all of the 2021 Notes (as defined below) at a redemption price equal to 100% of the original offering price of the notes, plus accrued and unpaid interest. (Note 17). The Company also terminated without cost its deal contingent forward currency contracts held to manage its exposure to foreign currency exchange rate fluctuations against the US and Canadian dollar on £343,000,000 of the £775,000,000 purchase consideration for the proposed Euro Auctions Acquisition. (Note 13).

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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