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Acquisitions and Purchase Accounting | 9 Months Ended
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Sep. 28, 2024
Business Combinations [Abstract] |
Business Combination Disclosure | Acquisitions and Purchase Accounting The company accounts for all business combinations using the acquisition method to record a new cost basis for the assets acquired and liabilities assumed. The difference between the purchase price and the fair value of the assets acquired and liabilities assumed has been recorded as goodwill in the financial statements. The company recognizes identifiable intangible assets, primarily trade names and customer relationships, at their fair value using a discounted cash flow model. The significant assumptions used to estimate the value of the intangible assets include revenue growth rates, projected profit margins, discount rates, royalty rates, and customer attrition rates. These significant assumptions are forward-looking and could be affected by future economic and market conditions. The results of operations are reflected in the consolidated financial statements of the company from the dates of acquisition. 2023 Acquisitions During 2023, the company completed various acquisitions that were not individually material. The final allocation of consideration paid for the 2023 acquisitions is summarized as follows (in thousands):
| Preliminary Opening Balance Sheet |  | Measurement Period Adjustments |  | Adjusted Opening Balance Sheet
Cash | $ | 3,102 |  |  | $ | — |  |  | $ | 3,102 |
Current assets | 9,964 |  |  | 11 |  |  | 9,975 |
Property, plant and equipment | 21,954 |  |  | (214) |  |  | 21,740 |
Goodwill | 38,422 |  |  | 3,278 |  |  | 41,700 |
Other intangibles | 34,337 |  |  | (722) |  |  | 33,615 |
Other assets | — |  |  | 5 |  |  | 5 |
Current liabilities | (3,774) |  |  | (1,147) |  |  | (4,921) |
Long-term deferred tax liability | (958) |  |  | 23 |  |  | (935) |
Other non-current liabilities | (12,099) |  |  | (216) |  |  | (12,315) |
Consideration paid at closing | $ | 90,948 |  |  | $ | 1,018 |  |  | $ | 91,966 |
Contingent consideration | 14,743 |  |  | 216 |  |  | 14,959 |
Net assets acquired and liabilities assumed | $ | 105,691 |  |  | $ | 1,234 |  |  | $ | 106,925 |
The net long-term deferred tax liability amounted to $0.9 million. The net deferred tax liability is comprised of $0.3 million related to the difference between the book and tax basis of identifiable intangible assets and $0.6 million related to the difference between the book and tax basis on identifiable tangible asset and liability accounts. The goodwill and $17.9 million of other intangibles associated with the trade names are subject to the non-amortization provisions of ASC 350. Other intangibles also include $7.2 million allocated to customer relationships, $7.9 million allocated to developed technology, and $0.6 million allocated to backlog, which are being amortized over periods of 7 years, 7 to 12 years, and 9 months, respectively. Goodwill of $18.0 million and other intangibles of $7.8 million are allocated to the Food Processing Equipment Group for segment reporting purposes. Goodwill of $9.9 million and other intangibles of $14.1 million are allocated to the Commercial Foodservice Equipment Group for segment reporting purposes. Goodwill of $13.8 million and other intangibles of $11.7 million are allocated to the Residential Kitchen Equipment Group for segment reporting purposes. Of these assets, goodwill of $40.0 million and intangibles of $32.2 million are expected to be deductible for tax purposes. Four purchase agreements include earnout provisions providing for a contingent payment due to the sellers for the achievement of certain targets. Four earnouts are payable to the extent certain sales and EBITDA targets are met with measurement dates ending between 2024 and 2026. One earnout is payable upon the achievement of certain product rollout targets specific to the year of measurement. The contractual obligation associated with the contingent earnout provisions recognized on the acquisition date amount to $15.0 million. 2024 Acquisitions During 2024, the company completed various acquisitions that were not individually material. The following estimated fair values of assets acquired and liabilities assumed are based on the information that was available as of the acquisition date for the 2024 acquisitions and are summarized as follows (in thousands):
| Preliminary Opening Balance Sheet |  | Preliminary Measurement Period Adjustments |  | Adjusted Opening Balance Sheet
Cash | $ | 1 |  |  | $ | — |  |  | $ | 1 |
Current assets | 1,676 |  |  | 222 |  |  | 1,898 |
Property, plant and equipment | 383 |  |  | (84) |  |  | 299 |
Goodwill | 945 |  |  | (114) |  |  | 831 |
Other intangibles | 568 |  |  | — |  |  | 568 |
Other assets | — |  |  | 938 |  |  | 938 |
Current liabilities | (222) |  |  | (195) |  |  | (417) |
Other non-current liabilities | — |  |  | (767) |  |  | (767) |
Net assets acquired and liabilities assumed | $ | 3,351 |  |  | $ | — |  |  | $ | 3,351 |
The goodwill and $0.3 million of other intangibles associated with the trade name are subject to the non-amortization provisions of ASC 350. Other intangibles also include $0.3 million allocated to customer relationships, which is being amortized over a period of 5 years. Goodwill of $0.8 million and other intangibles of $0.6 million are allocated to the Food Processing Equipment Group for segment reporting purposes. Of these assets, goodwill of $0.3 million and intangibles of $0.6 million are expected to be deductible for tax purposes. The company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the company is waiting for additional information necessary to finalize those fair values for the acquisitions completed during 2024. Certain intangible assets are preliminarily valued using historical information from the Food Processing Equipment Group and qualitative assessment of the business at acquisition date. Specifically, the company estimated the fair values of the intangible assets based on the percentage of purchase price assigned to similar intangible assets in previous acquisitions. Thus, the provisional measurements of fair values set forth above are subject to change. The company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

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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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