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Loss on Deconsolidation and Recognition of Equity Method Investment | 6 Months Ended
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Jun. 30, 2025
Equity Method Investments and Joint Ventures [Abstract] |
Loss on Deconsolidation and Recognition of Equity Method Investment | Note 14. Loss on Deconsolidation and Recognition of Equity Method Investment On June 21, 2025, the Company, through its wholly-owned subsidiary SYNETIQ Ltd., entered into an agreement with LKQ Europe to jointly provide vehicle parts dismantling and distribution services through the newly created venture, LKQ SYNETIQ. To prepare for the transaction, the Company moved the net assets to be used in the operations of the joint venture to a newly created entity, and pursuant to the agreement, the Company retained a 40% equity interest and LKQ Europe acquired a 60% equity interest in the new entity in exchange for proceeds of £8.0 million (approximately $11.0 million) to be paid in equal installments on the third, fourth, and fifth anniversaries of the closing date. As a result of the transaction, the Company determined that it no longer controlled and therefore deconsolidated the new entity at closing and recorded the fair value of its 40% equity interest in LKQ SYNETIQ on its consolidated balance sheet, within other non-current assets, by applying the equity method of accounting. The fair value of the initial carrying amount of the equity method investment was determined based on the value implied by the transaction. The loss on deconsolidation was determined as follows:
Fair value of consideration receivable | $ | 8.7 |
Initial carrying amount of the equity method investment | 5.8 |
Carrying amount of net assets derecognized on deconsolidation | (30.0) |
Loss on deconsolidation | $ | (15.5) |
The carrying amount of the net assets derecognized on deconsolidation includes an allocation of goodwill, which was determined based on the relative fair value of the business in relation to the fair value of its associated reporting unit. During the period, the Company also recognized a $1.7 million inventory write down in connection with the transaction, recognized within cost of inventory sold, and incurred $2.5 million in related transaction costs recognized within selling, general and administrative expenses. In addition, LKQ Europe has an option to purchase the Company's remaining 40% equity interest in LKQ SYNETIQ during the six month period following the fifth anniversary of the closing date at a price based on the trailing gross profit of LKQ SYNETIQ for specified periods. If LKQ Europe does not exercise its option, the Company will have the right to initiate a sale of LKQ SYNETIQ's assets or shares or require LKQ Europe to sell its shares to the Company at a price based on the trailing gross profit of LKQ SYNETIQ for specified periods. The Company has also provided certain loans, subleased certain premises, and entered into a transitional services and a vehicle supply contract with LKQ SYNETIQ. These related party arrangements allow LKQ SYNETIQ to obtain access to certain premises required to conduct operations, obtain access to the Company’s auction platform to continue to generate supply of vehicles, and receive transitional services from the Company to support its operations. These related party transactions were not material as at or for the three and six months ended June 30, 2025. Equity income (loss) for the period commencing June 21, 2025, presented within other income (loss), net was not material for the three and six months ended June 30, 2025.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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