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Acquisitions | 6 Months Ended
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Jun. 30, 2023
Business Combinations [Abstract] |
Acquisitions | ACQUISITIONS Acquisitions Completed in 2023 Acquisition of Trackless On April 3, 2023, the Company completed the acquisition of substantially all the assets and operations of Trackless Vehicles Limited and Trackless Vehicles Asset Corp, including the wholly-owned subsidiary Work Equipment Ltd. (collectively, “Trackless”), a leading Canadian manufacturer of multi-purpose, off-road multi-purpose tractors and attachments. The Company expects that the Trackless acquisition will further bolster its position as an industry leading diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets with leading brands of premium, value-adding products, and a strong supporting aftermarket platform. The assets and liabilities of Trackless have been consolidated into the Company’s Condensed Consolidated Balance Sheet as of June 30, 2023, and the post-acquisition results of operations have been included in the Condensed Consolidated Statements of Operations, within the Environmental Solutions Group. The initial cash consideration paid by the Company to acquire Trackless was C$57.3 million (approximately $42.6 million), inclusive of certain preliminary closing adjustments, and was funded through existing cash and borrowings under the Company’s credit agreement. In addition, there is a contingent earn-out payment of up to C$6.0 million (approximately $4.5 million), based upon the achievement of certain financial targets over a specified performance period. Any additional closing adjustments are expected to be finalized before the end of 2023. The acquisition is being accounted for in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. Accordingly, the total purchase price has been allocated on a preliminary basis to assets acquired and liabilities assumed in connection with the acquisition based on their estimated fair values as of the completion of the acquisition. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company’s judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. Due to the proximity of the date of acquisition to the date of issuance of the condensed consolidated financial statements, the Company’s purchase price allocation as of June 30, 2023 reflects various provisional estimates that were based on the information that was available as of the acquisition date and the filing date of this Form 10-Q. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the determination of those fair values is not yet finalized. Thus, the preliminary measurements of fair value set forth in the table below are subject to change during the measurement period as valuations are finalized. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:
(in millions) |
Purchase price, inclusive of preliminary closing adjustments | $ | 42.6 |
Estimated fair value of additional consideration (a) | 4.5 |
Total consideration | 47.1 |
Accounts receivable | 4.7 |
Inventories | 14.3 |
Prepaid expenses and other current assets | 0.1 |
Rental equipment | 1.6 |
Properties and equipment | 4.4 |
Customer relationships (b) | 10.5 |
Trade names (c) | 2.8 |
Other intangible assets | 1.3 |
Accounts payable | (1.5) |
Accrued liabilities | (0.5) |
Net assets acquired | 37.7
Goodwill (d) | $ | 9.4 |
(a) Represents the preliminary estimated fair value of the contingent earn-out payment as of the acquisition date, which is included in Other long-term liabilities on the Condensed Consolidated Balance Sheets. See Note 13 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment. (b) Represents the preliminary fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with a preliminary estimated useful life of approximately 12 years. (c) Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets. (d) Goodwill, which is primarily tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment. In the period between the April 3, 2023 closing date and June 30, 2023, Trackless generated $10.9 million of net sales and $2.7 million of operating income, before elimination of intercompany transactions. The acquisition was not, and would not have been, material to the Company’s net sales or results of operations for the three and six months ended June 30, 2022. Accordingly, the Company’s consolidated results do not differ materially from historical performance as a result of the acquisition, and therefore, unaudited pro-forma results are not presented. Acquisition of Blasters On January 3, 2023, the Company completed the acquisition of substantially all the assets and operations of Blasters, Inc. and Blasters Technologies, LLC (collectively, “Blasters”), a leading U.S. manufacturer of truck-mounted waterblasting equipment. The Company expects that the Blasters acquisition will further bolster its position as an industry leading diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets with leading brands of premium, value-adding products, and a strong supporting aftermarket platform. The assets and liabilities of Blasters have been consolidated into the Company’s Condensed Consolidated Balance Sheet as of June 30, 2023, and the post-acquisition results of operations have been included in the Condensed Consolidated Statements of Operations, within the Environmental Solutions Group. The initial cash consideration paid by the Company to acquire Blasters was $13.2 million, inclusive of certain closing adjustments, of which $0.2 million was received in July 2023. In addition, there is a contingent earn-out payment of up to $8.0 million, based upon the achievement of certain financial targets over a specified performance period. The purchase price was funded through existing cash and borrowings under the Company’s credit agreement. The acquisition is being accounted for in accordance with ASC 805, Business Combinations. The Company’s purchase price allocation as of June 30, 2023 reflects various provisional estimates that were based on the information that was available as of the acquisition date and the filing date of this Form 10-Q. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the determination of those fair values is not yet finalized. Thus, the preliminary measurements of fair value set forth in the table below are subject to change during the measurement period as valuations are finalized. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:
(in millions) |
Purchase price, inclusive of closing adjustments | $ | 13.2 |
Estimated fair value of additional consideration (a) | 4.0 |
Total consideration | 17.2 |
Accounts receivable | 0.7 |
Inventories | 4.6 |
Prepaid expenses and other current assets | 0.1 |
Properties and equipment | 1.1 |
Operating lease right-of-use assets (b) | 1.1 |
Customer relationships (c) | 5.3 |
Trade names (d) | 2.6 |
Other intangible assets | 0.3 |
Operating lease liabilities (b) | (1.1) |
Accounts payable | (0.9) |
Accrued liabilities | (0.3) |
Customer deposits | (0.5) |
Finance lease obligations | (0.1) |
Net assets acquired | 12.9
Goodwill (e) | $ | 4.3 |
(a) Represents the preliminary estimated fair value of the contingent earn-out payment as of the acquisition date, of which $1.0 million is included in Other current liabilities and $3.0 million is included in Other long-term liabilities on the Condensed Consolidated Balance Sheets. See Note 13 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment. (b) In connection with the acquisition, the Company entered into a lease agreement for the Blasters facility, which is owned by affiliates of the sellers. The related-party lease contains a market-based annual rent of $0.2 million, an initial lease term of five years, and options to renew. (c) Represents the preliminary fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with a preliminary estimated useful life of approximately 12 years. (d) Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets. (e) Goodwill, which is tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment. In the period between the January 3, 2023 closing date and June 30, 2023, Blasters generated $10.3 million of net sales and $1.0 million of operating income. The acquisition was not, and would not have been, material to the Company’s net sales or results of operations for the three and six months ended June 30, 2022. Accordingly, the Company’s consolidated results do not differ materially from historical performance as a result of the acquisition, and therefore, unaudited pro-forma results are not presented. Acquisitions Completed in 2022 On October 3, 2022, the Company completed the acquisition of substantially all the assets and operations of TowHaul Corporation (“TowHaul”). TowHaul is a leading manufacturer of off-road towing and hauling equipment. The TowHaul acquisition bolstered the Company’s position as an industry leading diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets with leading brands of premium, value-adding products, and a strong supporting aftermarket platform. The cash consideration paid by the Company to acquire TowHaul was $43.3 million, which was funded through existing cash and borrowings under the Company’s credit facility. The acquisition is being accounted for in accordance with ASC 805, Business Combinations. The Company’s purchase price allocation as of June 30, 2023 reflects various provisional estimates that were based on the information that was available as of the acquisition date and the filing date of this Form 10-Q. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the determination of those fair values is not yet finalized. Thus, the preliminary measurements of fair value set forth in the table below are subject to change during the measurement period as valuations are finalized. During the three months ended June 30, 2023, the Company recognized measurement period adjustments, which primarily resulted from obtaining a third-party valuation of acquired intangible assets, that resulted in a $7.2 million increase to the carrying value of Goodwill from the $12.9 million previously recorded as of December 31, 2022, with a corresponding reduction in the carrying value of acquired intangible assets. The measurement period adjustments did not have a material impact on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:
(in millions) |
Purchase price, inclusive of closing adjustments | $ | 43.3 |
Total consideration | 43.3 |
Accounts receivable | 1.5 |
Inventories | 4.7 |
Properties and equipment | 6.4 |
Customer relationships (a) | 6.9 |
Trade names (b) | 5.7 |
Other intangible assets | 1.0 |
Accounts payable | (0.1) |
Accrued liabilities | (0.5) |
Customer deposits | (2.4) |
Net assets acquired | 23.2 |
Goodwill (c) | $ | 20.1 |
(a) Represents the preliminary fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with a preliminary estimated useful life of approximately 6 years. (b) Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets. (c) Goodwill, which is tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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