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Note 3 - Acquisitions
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Business Combination Disclosure [Text Block]
3.
Acquisitions
 
Acquisition of Pramac
 
On
March
1,
2016,
the Company acquired a
65%
ownership interest in Pramac for a purchase price, net of cash acquired, of
$60,886.
Headquartered in Siena, Italy, Pramac is a leading global manufacturer of stationary, mobile and portable generators primarily sold under the Pramac® brand. Pramac products are sold in over
150
countries through a broad distribution network. The acquisition purchase price was funded solely through cash on hand.
 
The
35%
noncontrolling interest in Pramac had an acquisition date fair value of
$34,253,
and was recorded as a redeemable noncontrolling interest in the consolidated balance sheet, as t
he noncontrolling interest holder has within its control the right to require the Company to redeem its interest in Pramac. The noncontrolling interest holder has a put option to sell their interests to the Company any time within
five
years from the date of acquisition. The put option price is either (i) a fixed amount if voluntarily exercised within the
first
two
years after the acquisition, or (ii) based on a multiple of earnings, subject to the terms of the acquisition. Additionally, the Company holds a call option that it
may
redeem commencing
five
years from the date of acquisition, or earlier upon the occurrence of certain circumstances. The call option price is based on a multiple of earnings that is subject to the terms of the acquisition. Both the put and call option only provide for the complete transfer of the noncontrolling interest, with no partial transfers of interest permitted.
 
The redeemable noncontrolling interest is recorded at the greater of the initial fair value, increased or decreased for the noncontrolling interests
’ share of comprehensive net income (loss), or the estimated redemption value, with any adjustment to the redemption value impacting retained earnings, but not net income. However, the redemption value adjustments are reflected in the earnings per share calculation, as detailed in Note
12,
"Earnings Per Share," to the consolidated financial statements. The following table presents the changes in the redeemable noncontrolling interest:
 
   
Year Ended
  
   
December 31, 2016
  
Beginning Balance - January 1
   $
-
  
Noncontrolling interest of Pramac
    
34,253
  
Net income
    
100
  
Foreign currency translation
    
(2,124
 )
Redemption value adjustment
    
909
  
Ending Balance - December 31
   $
33,138
  
 
The Company recorded a preliminary purchase price allocation during the
first
quarter of
2016,
which
 was updated in the
fourth
quarter of
2016,
based upon its estimates of the fair value of the acquired assets and assumed liabilities. The preliminary purchase price allocation as of the balance sheet date was as follows:
 
   
March 1, 2016
  
Accounts receivable
   $
51,289
  
Inventories
    
39,889
  
Property and equipment
    
19,138
  
Intangible assets
    
34,471
  
Goodwill
    
46,202
  
Other assets
    
7,698
  
Total assets acquired
    
198,687
  
         
Short-term borrowings
    
21,105
  
Accounts payable
    
40,270
  
Long-term debt and capital lease obligations (including current portion)
    
18,599
  
Other liabilities
    
23,521
  
Redeemable noncontrolling interest
    
34,253
  
Noncontrolling interest
    
53
  
Net assets acquired
   $
60,886
  
 
The goodwill ascribed to this acquisition is not deductible for tax purposes. The accompanying consolidated financial statements include the results of Pramac from the date of acquisition through
December
31,
2016.
 
Acquisition of CHP
 
On
August
1,
2015,
the Company acquired CHP for a purchase price, net of cash acquired, of
$74,570.
Headquartered in Vergennes, Vermont, CHP is a leading manufacturer of high-quality, innovative, professional-grade engine powered equipment used in a wide variety of property maintenance applications, with sales primarily in North America. The acquisition purchase price was funded solely through cash on hand.
 
The Company recorded a preliminary purchase pric
e allocation during the
third
quarter of
2015
based upon its estimates of the fair value of the acquired assets and assumed liabilities. As a result, the Company recorded approximately
$81,726
of intangible assets, including approximately
$30,076
of goodwill, as of the acquisition date. The purchase price allocation was finalized in the
fourth
quarter of
2015,
resulting in a
$6,552
decrease to total intangible assets, including an increase of
$6,208
in goodwill. The goodwill ascribed to this acquisition is not deductible for tax purposes. In addition, the Company assumed
$12,000
of debt along with this acquisition. The accompanying consolidated financial statements include the results of CHP from the date of acquisition through
December
31,
2016.
 
Acquisition of MAC
 
On
October
1,
2014,
the Company acquired MAC for a purchase price, net of cash
acquired, of
$53,747.
MAC is a leading manufacturer of premium-grade commercial and industrial mobile heaters within the United States and Canada. The acquisition was funded solely through cash on hand.
 
The Company recorded a preliminary purchase price allocation during the
fourth
quarter of
2014
based upon its estimates of the fair value of the acquired assets and assumed liabilities. As a result, the Company recorded approximately
$49,378
of intangible assets, including
approximately
$25,898
of goodwill, as of the acquisition date. The purchase price allocation was finalized during the
third
quarter of
2015,
resulting in a
$4,229
decrease to total intangible assets, including an increase of
$2,481
to goodwill. The goodwill ascribed to this acquisition is not deductible for tax purposes. The accompanying consolidated financial statements include the results of MAC from the date of acquisition through
December
31,
2016.
 
Pro Forma Information
 
The following unaudited pro forma information of the Company gives effect to these acquisitions as though the transactions had occurred on
January
1,
2014:
 
   
Year Ended December 31,
  
   
2016
    
2015
    
2014
  
Net Sales:
                        
As reported
   $
1,444,453
     $
1,317,299
     $
1,460,919
  
Pro forma
    
1,473,799
      
1,556,459
      
1,776,843
  
                         
Net income attributable to Generac Holdings Inc.:
                        
As reported
   $
98,788
     $
77,747
     $
174,613
  
Pro forma
    
100,907
      
78,618
      
174,926
  
                         
Net income attributable to Generac Holdings Inc. per common share - diluted
                        
As reported
   $
1.50
     $
1.12
     $
2.49
  
Pro forma
    
1.53
      
1.14
      
2.49
  
 
This unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions bee
n consummated on
January
1,
2014.