XML 287 R12.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Acquisitions and Disposition | 12 Months Ended
--- | ---
Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
Acquisitions and Disposition | Acquisitions and Disposition From time to time, the Company may pursue business acquisitions that either strategically fit with the Company’s existing core business or expand the Company’s products and services in new and attractive adjacent markets. The Company accounts for business acquisitions under the acquisition method of accounting. The assets acquired and liabilities assumed in connection with business acquisitions are recorded at the date of acquisition at their estimated fair values, with any excess of the purchase price over the estimated fair values of the net assets acquired recorded as goodwill. Significant judgment is required in estimating the fair value of assets acquired and liabilities assumed and in assigning useful lives to certain definite-lived intangible and tangible assets. Accordingly, the Company may engage third-party valuation specialists to assist in these determinations. The fair value estimates are based on available information as of the acquisition date and on future expectations and assumptions deemed reasonable by management, but are inherently uncertain. The consolidated financial statements reflect the results of operations of an acquired business starting from the effective date of the acquisition. Acquisition-related expenses are recognized as incurred and are included in merger, restructuring, integration, and other in the Consolidated Statements of Operations and were not material during 2021, 2020, and 2019. Sunpro Solar Acquisition In December 2021, the Company acquired Sunpro Solar, a leading solar installer in the U.S. The acquisition is intended to expand the Company’s offerings by entering the residential solar market. Upon the consummation of the Sunpro Solar Acquisition, Sunpro Solar became an indirect wholly-owned subsidiary of the Company. Total consideration was approximately $750 million, which consisted of cash paid of $142 million, net of cash acquired, and approximately 75 million unregistered shares of the Company’s Common Stock, par value of $0.01 per share, with a fair value of $569 million, of which approximately 5 million shares will be issued throughout 2022. The total fair value of $569 million was based on the closing stock price of the Company’s Common Stock on December 8, 2021, the acquisition date, adjusted for the impact of contractual restrictions on the ability for the holders to sell their shares. The following table summarizes the purchase price allocation of the estimated fair values as of the date of acquisition of the assets acquired and liabilities assumed:
Fair value of assets acquired and liabilities assumed (in thousands): |
Cash | $ | 38,493 |
Accounts receivable | 35,998 |
Inventories | 49,480 |
Prepaid expenses and other current assets | 17,388 |
Property and equipment | 12,826 |
Goodwill | 694,726 |
Other definite-lived intangible assets | 42,100 |
Other assets | 27,201 |
Accounts payable | (53,753) |
Deferred revenue | (39,227) |
Accrued expenses and other current liabilities | (44,088) |
Current maturities of long-term debt | (7,643) |
Other liabilities | (7,960) |
Long-term debt | (15,112) |
Total consideration transferred | $ | 750,429 |
The purchase price allocation reflects preliminary fair value estimates based on management analysis, including work performed by third-party valuation specialists. Other definite-lived intangible assets is primarily comprised of a customer backlog intangible asset, which will be recognized as a reduction of installation and other revenue over a useful life of three months from the date of acquisition. The Company recorded $695 million of goodwill as a result of the Sunpro Solar Acquisition, the majority of which is deductible for tax purposes, and allocated the goodwill to the Solar reporting unit at the time of acquisition. The goodwill recognized as a result of the Sunpro Solar Acquisition reflects the strategic value and expected synergies of Sunpro Solar to the Company. Pro Forma Results The following summary, prepared on a pro forma basis, presents the Company’s unaudited consolidated results of operations for 2021 and 2020 as if the Sunpro Solar Acquisition had been completed as of January 1, 2020. The pro forma results below include the impact of certain adjustments related to the amortization of intangible assets, acquisition-related costs incurred as of the acquisition date, and in each case, the related income tax effects, as well as certain other post-acquisition adjustments directly attributable to the acquisition. This pro forma presentation does not include any impact of transaction synergies. The pro forma results are not necessarily indicative of the results of operations that actually would have been achieved had the Sunpro Solar Acquisition been consummated as of that date:
|  | Years Ended December 31,
(in thousands) |  | 2021 |  | 2020
Total revenue |  | $ | 5,905,148 |  |  | $ | 5,590,880 |
Net income (loss) |  | $ | (328,099) |  |  | $ | (680,992) |
Revenue and net loss attributable to ADT Solar of $47 million and $7 million, respectively, are included in the Consolidated Statements of Operations from the acquisition date, December 8, 2021 through December 31, 2021. Defenders Acquisition In January 2020, the Company acquired its largest independent dealer, Defender Holdings, Inc. (“Defenders”) (the “Defenders Acquisition”), for total consideration of approximately $290 million, which consisted of cash paid of $173 million, net of cash acquired, and the issuance of approximately 16 million shares of the Company’s Common Stock, par value of $0.01 per share, with a fair value of $114 million. The following table summarizes the purchase price allocation of the estimated fair values as of the date of acquisition of the assets acquired and liabilities assumed:
Fair value of assets acquired and liabilities assumed (in thousands): |
Cash | $ | 3,437 |
Accounts receivable | 15,269 |
Inventories | 17,950 |
Prepaid expenses and other current assets | 17,807 |
Property and equipment | 16,486 |
Goodwill | 252,239 |
Contracts and related customer relationships | 17,400 |
Other assets | 18,520 |
Accounts payable | (14,937) |
Deferred revenue | (1,170) |
Accrued expenses and other current liabilities | (29,223) |
Deferred tax liabilities | (7,655) |
Other liabilities | (15,760) |
Total consideration transferred | $ | 290,363 |
The purchase price allocation reflects fair value estimates based on management analysis, including work performed by third-party valuation specialists. The acquired contracts and related customer relationships are amortized over 14 years. The Company recorded $252 million of goodwill as a result of the Defenders Acquisition, none of which is deductible for tax purposes, and allocated the goodwill to the CSB reporting unit at the time of acquisition. The goodwill recognized as a result of the Defenders Acquisition reflects the strategic value and expected synergies of Defenders to the Company. In connection with the Defenders Acquisition, the Company recorded a loss in the amount of $81 million during the first quarter of 2020 from the settlement of a pre-existing relationship with Defenders related to customer accounts purchased from Defenders prior to the Defenders Acquisition. The Company included the loss in merger, restructuring, integration, and other in the Consolidated Statements of Operations, and the associated cash payment is reflected as cash flows from operating activities in the Consolidated Statements of Cash Flows during 2020. Other Acquisitions During 2021, total consideration related to business acquisitions (excluding the Sunpro Solar Acquisition) was approximately $21 million. During 2020, total consideration related to business acquisitions (excluding the Defenders Acquisition) was approximately $80 million, including $52 million of cash, net of cash acquired. This resulted in the recognition of $24 million of goodwill, $13 million of contracts and related customer relationships, and $43 million of other intangible assets related to developed technology. During 2019, total consideration related to business acquisitions was approximately $114 million, including $109 million of cash, net of cash acquired. This resulted in the recognition of $47 million of goodwill and $39 million of contracts and related customer relationships. Disposition of Canadian Operations In November 2019, the Company sold ADT Security Services Canada, Inc. (“ADT Canada”) to TELUS Corporation (“TELUS”) for a selling price of $514 million (CAD $676 million). The sale of ADT Canada did not represent a strategic shift that will have a major effect on the Company’s operations and financial results, and therefore, did not meet the criteria to be reported as discontinued operations. In connection with the sale, the Company and TELUS entered into a transition services agreement whereby the Company provides certain post-closing services to TELUS related to the business of ADT Canada. Additionally, the Company and TELUS entered into a non-competition and non-solicitation agreement pursuant to which the Company will not have any operations in Canada, subject to limited exceptions for cross-border commercial customers and mobile safety applications, for a period of seven years. Finally, the Company and TELUS entered into a patent and trademark license agreement granting (i) the use of the Company’s patents in Canada to TELUS for a period of seven years, and (ii) exclusive use of the Company’s trademarks in Canada for a period of five years and non-exclusive use for an additional two years thereafter. During 2019, the Company recorded a loss on sale of business of $62 million, which included the reclassification of foreign currency translation from AOCI of approximately $39 million. Additionally, the Company received $496 million of proceeds, net of cash sold, of approximately $6 million, related to the sale of ADT Canada, which is reflected in cash flows from investing activities in the Consolidated Statement of Cash Flows. The Company allocated approximately $10 million of proceeds to the patent and trademark license agreement, which is reflected in cash flows from operating activities in the Consolidated Statement of Cash Flows. The impact in connection with the sale of ADT Canada was not material during 2021 or 2020. ADT Canada’s loss before income taxes for the year ended December 31, 2019 was $39 million.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationAndAssetAcquisitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration