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Business Combinations and Asset Acquisitions
3 Months Ended
Mar. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Business Combination Disclosure
Rahi Systems Holdings, Inc.
On November 1, 2022, through its wholly-owned subsidiary WESCO Distribution, Inc. (“Wesco Distribution”), the Company acquired 100% of the equity securities of Rahi Systems Holdings, Inc. (“Rahi Systems” or “Rahi”). Headquartered in Fremont, California, Rahi Systems is a leading provider of global hyperscale data center solutions with over 900 employees in 25 countries. Rahi’s expertise with complex information technology projects and global presence strengthen Wesco’s data center solution offerings. Wesco Distribution funded the purchase price paid at closing with cash on hand as well as borrowings under its accounts receivable securitization and revolving credit facilities.
The estimated fair values of assets acquired and liabilities assumed were based on preliminary calculations and valuations using estimates and assumptions at the time of acquisition. As the Company obtained additional information during the measurement period, it recorded adjustments to its preliminary estimates of fair value, which were as of November 1, 2022. During the fourth quarter of 2023, the Company finalized its allocation of the purchase consideration to the respective fair values of assets acquired and liabilities assumed in the acquisition of Rahi. The Company recorded adjustments to inventories of $19.6 million, other current and non-current assets of $6.4 million, accounts payable of $28.0 million, deferred income taxes of $7.2 million, and other current and non-current liabilities of $6.1 million. The net impact of these adjustments was an increase to goodwill of $0.9 million.
The results of operations of Rahi Systems are included in Wesco’s unaudited Condensed Consolidated Financial Statements beginning on November 1, 2022, the acquisition date. For the three months ended March 31, 2024 and 2023, the Condensed Consolidated Statements of Income include $108.8 million and $136.3 million of net sales, respectively, and an immaterial amount of income from operations for Rahi Systems. The Company has not presented supplemental pro forma revenue and earnings of the combined business as the acquisition of Rahi Systems is not material to Wesco’s unaudited Condensed Consolidated Financial Statements.