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Note 2 - Acquisitions | 9 Months Ended
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Sep. 30, 2022
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | 2. Acquisitions Fiscal 2022 Acquisitions On June 30, 2022, the Company acquired Electronic Environments Co. LLC and related subsidiaries (collectively EEC). Headquartered in Marlborough, Massachusetts, EEC is an industrial generator distributor as well as a provider of data center and telecom facility design, build, maintenance, and repair services. The accompanying condensed consolidated financial statements include the results of EEC from the date of acquisition through September 30, 2022. Pro forma and other financial information is not presented as the effects of the EEC acquisition are not material to the Company's results of operations or financial position prior to the acquisition date. Fiscal 2021 Acquisitions Acquisition of Deep Sea On June 1, 2021, the Company acquired Deep Sea for a purchase price, net of cash acquired, of $420,700. Headquartered in Hunmanby, United Kingdom, Deep Sea is a designer and manufacturer of a diverse suite of flexible control solutions focused on the global power generation and transfer switch markets. The acquisition purchase price was funded solely through cash on hand. The Company finalized the Deep Sea purchase price allocation during the second quarter of 2022 based on its estimates of the fair value of the acquired assets and assumed liabilities. The finalization did not result in material adjustments to the Company's preliminary estimates. As a result, the Company recorded $437,874 of intangible assets, including $263,604 of goodwill recorded in the International segment, as of the acquisition date. The goodwill ascribed to this acquisition is not deductible for tax purposes. The accompanying condensed consolidated financial statements include the results of Deep Sea from the date of acquisition through September 30, 2022. Acquisition of Chilicon On July 2, 2021, the Company acquired Chilicon for a purchase price, net of cash acquired, of $61,129. Based in Los Angeles, California, Chilicon is a designer and provider of grid-interactive microinverter and monitoring solutions for the solar market. Chilicon's power inversion and monitoring system technologies maximize photovoltaic (solar power) system production, lower installer operational cost, and promote end-user satisfaction. Total consideration consisted of the following:
Cash paid at closing |  | $ | 11,821 |
Deferred cash payment (1) |  |  | 6,000 |
Common stock issued at closing |  |  | 12,000 |
Contingent consideration (2) |  |  | 31,308 |
Total purchase price |  | $ | 61,129 |
(1) | Payable on the third business day after December 31, 2023.
(2) | Payable in common stock issued upon achievement of certain performance targets within 45 calendar days following the conclusion of the earnout period, December 31, 2025.
The Company finalized the Chilicon purchase price allocation during the second quarter of 2022 based on its estimates of the fair value of the acquired assets and assumed liabilities. The finalization did not result in material adjustments to the Company's preliminary estimates. As a result, the Company recorded $70,174 of intangible assets, including $36,974 of goodwill recorded in the Domestic segment, as of the acquisition date. The goodwill ascribed to the Chilicon acquisition is not deductible for tax purposes. The accompanying condensed consolidated financial statements include the results of Chilicon from the date of acquisition through September 30, 2022. Acquisition of Off Grid Energy On September 1, 2021, the Company acquired Off Grid Energy for a purchase price of $56,949, net of cash acquired and inclusive of the then estimated contingent consideration of $29,054 payable in cash based on earnout period performance. The contingent consideration was paid during the third quarter of 2022 in the amount of $16,135. Headquartered in Rugby, United Kingdom, Off Grid Energy is a designer and manufacturer of industrial-grade mobile energy storage systems. The acquisition purchase price was funded through cash on hand. The Company finalized the Off Grid Energy purchase price allocation during the third quarter of 2022 based on its estimates of the fair value of the acquired assets and assumed liabilities. The finalization did not result in material adjustments to the Company's preliminary estimates. As a result, the Company recorded $56,076 of intangible assets, including $21,531 of goodwill recorded in the International segment, as of the acquisition date. The goodwill ascribed to this acquisition is not deductible for tax purposes. The accompanying condensed consolidated financial statements include the results of Off Grid Energy from the date of acquisition through September 30, 2022. Acquisition of ecobee On December 1, 2021, the Company acquired ecobee for a purchase price, net of cash acquired, of $735,632. Headquartered in Toronto, Canada, ecobee is a leader in sustainable home technology solutions including smart thermostats that deliver significant energy savings, security and peace of mind. The purchase price consisted of the following:
Cash paid at closing |  | $ | 225,458 |
Common stock issued at closing |  |  | 420,774 |
Contingent consideration (1) |  |  | 89,400 |
Total purchase price |  | $ | 735,632 |
(1) | To be paid in the form of common stock issued upon achievement of certain performance targets following the end of two earnout periods, one ended June 30, 2022, and one ending June 30, 2023.
The Company recorded its preliminary ecobee purchase price allocation during the fourth quarter of 2021, which has been updated subsequently based on its estimates of the fair value of the acquired assets and assumed liabilities at the time of each update. The updates did not result in material adjustments to the Company's preliminary estimates. As a result, the Company recorded $799,228 of intangible assets, including $241,328 of goodwill recorded in the Domestic segment, as of the acquisition date. A portion of the goodwill ascribed to this acquisition is deductible for tax purposes. The accompanying condensed consolidated financial statements include the results of ecobee from the date of acquisition through September 30, 2022. The allocation of the purchase price to identifiable assets and liabilities is based on the preliminary valuations performed to determine the fair value of the net assets as of the acquisition date. The measurement period for the valuation of net assets acquired ends as soon as information on the facts and circumstances that existed as of the acquisition date becomes available, but not to exceed 12 months following the acquisition date. As the Company finalizes valuations, adjustments in purchase price allocations may require a change in the amounts allocated to net assets acquired during the periods in which the adjustments are determined. Other Acquisitions On September 1, 2021, the Company acquired Apricity Code, an advanced engineering and product design company located in Bend, Oregon. On October 1, 2021, the Company acquired Tank Utility, a provider of IoT propane tank monitoring that enables the optimization of propane fuel logistics. The combined purchase price for these two acquisitions was $29,945, net of cash acquired, and was funded solely through cash on hand. The Company finalized its purchase price allocation during the third quarter of 2022 based upon the Company's estimates of the fair value of the acquired assets and assumed liabilities. The finalization did not result in material adjustments to the Company's preliminary estimates. The accompanying condensed consolidated financial statements include the results of these two acquired businesses since the dates of acquisition through September 30, 2022. Pro forma financial information is not presented for the 2021 acquisitions as the effects of the acquisitions individually and in the aggregate are not material to the Company's results of operations or financial position prior to the acquisition dates. Summary Purchase Price Allocations The fair values assigned to certain assets acquired and liabilities assumed, as of the acquisition dates, are as follows for the 2021 acquisitions:
|  | Deep Sea |  |  | ecobee |  |  | All Other |  |  | Total |
Accounts receivable |  | $ | 9,574 |  |  | $ | 23,337 |  |  | $ | 13,852 |  |  | $ | 46,763 |
Inventories |  |  | 9,970 |  |  |  | 7,258 |  |  |  | 7,034 |  |  |  | 24,262 |
Prepaid expenses and other current assets |  |  | 1,181 |  |  |  | 5,689 |  |  |  | 6,594 |  |  |  | 13,464 |
Property and equipment |  |  | 8,838 |  |  |  | 3,588 |  |  |  | 480 |  |  |  | 12,906 |
Intangible assets |  |  | 174,270 |  |  |  | 557,900 |  |  |  | 81,171 |  |  |  | 813,341 |
Goodwill |  |  | 263,604 |  |  |  | 241,328 |  |  |  | 83,859 |  |  |  | 588,791 |
Deferred income taxes |  |  | - |  |  |  | 46,721 |  |  |  | 5,694 |  |  |  | 52,415 |
Other assets |  |  | 151 |  |  |  | 11,722 |  |  |  | 8,526 |  |  |  | 20,399 |
Total assets acquired |  |  | 467,588 |  |  |  | 897,543 |  |  |  | 207,210 |  |  |  | 1,572,341 |
Accounts payable |  |  | 8,998 |  |  |  | 25,968 |  |  |  | 7,473 |  |  |  | 42,439 |
Accrued wages and employee benefits |  |  | 2,106 |  |  |  | 1,354 |  |  |  | 872 |  |  |  | 4,332 |
Other accrued liabilities |  |  | 1,737 |  |  |  | 19,898 |  |  |  | 18,258 |  |  |  | 39,893 |
Short-term borrowings |  |  | - |  |  |  | - |  |  |  | 800 |  |  |  | 800 |
Current portion of long-term debt |  |  | - |  |  |  | - |  |  |  | 233 |  |  |  | 233 |
Deferred income taxes |  |  | 33,957 |  |  |  | 80,929 |  |  |  | 19,930 |  |  |  | 134,816 |
Other long-term liabilities |  |  | 90 |  |  |  | 33,762 |  |  |  | 9,997 |  |  |  | 43,849 |
Long-term borrowings and finance lease obligations |  |  | - |  |  |  | - |  |  |  | 1,624 |  |  |  | 1,624 |
Net assets acquired |  | $ | 420,700 |  |  | $ | 735,632 |  |  | $ | 148,023 |  |  | $ | 1,304,355 |

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