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ACQUISITIONS | 9 Months Ended
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Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
ACQUISITIONS | ACQUISITIONS The Company accounts for business combinations under the acquisition method of accounting, under which the Company allocates the purchase price to the assets acquired and liabilities assumed based on an estimate of fair value. Prime Acquisition In November 2021, the Company completed the acquisition of the Prime Automotive Group (“Prime”), including 28 dealerships, certain real estate and three collision centers in the Northeastern U.S. (collectively referred to as the “Prime Acquisition”), for aggregate consideration of $934.2 million. The Company analyzed and assessed all available information related to property and equipment and property lease contracts, determining the preliminary fair values established in 2021,were appropriate and no material adjustments were recorded to these fair values in the nine months ended September 30, 2022. The Company previously recorded a $33.4 million deposit for the purchase of an additional dealership as part of the Prime Acquisition, which had not closed as of December 31, 2021. As of September 30, 2022, the Company is still waiting for distributor approval to obtain ownership of the additional dealership. Pursuant to the purchase agreement with the seller, the seller initiated legal action against the distributor to compel the approval of the sale of the dealership. In March 2022, upon the contractual release of funds from escrow to the seller related to the dealership, the deposit was recognized as additional consideration paid and reflected as additional goodwill, resulting in total consideration associated with the Prime Acquisition of $967.6 million. If such legal action is resolved within the 12-month measurement period following the acquisition date, the Company will make an adjustment to reflect the fair value of the acquisition of this dealership. The results of the Prime Acquisition are included in the U.S. segment. The goodwill is deductible for income tax purposes. The following table summarizes the consideration paid and aggregate amounts of assets acquired and liabilities assumed (in millions):
Total consideration |  | $ | 967.6 |
Identifiable assets acquired and liabilities assumed |  |
Inventories |  | 136.7 |
Property and equipment |  | 266.8 |
Intangible franchise rights |  | 135.3 |
Operating lease assets |  | 58.3 |
Other assets (1) |  | 62.2 |
Total assets acquired |  | 659.3 |
Operating lease liabilities |  | 56.6 |
Other liabilities (2) |  | 38.3 |
Total liabilities assumed |  | 94.9 |
Total identifiable net assets |  | 564.4 |
Goodwill |  | $ | 403.2 |
(1) Other assets acquired in connection with the Prime Acquisition include $55.3 million of assets classified as held for sale as of the acquisition date. See the table below for additional details. (2) Other liabilities assumed in connection with the Prime Acquisition include $1.7 million of liabilities classified as held for sale as of the acquisition date. See the table below for additional details.
Prime assets classified as held for sale as of the acquisition date (in millions) |  |
Inventories |  | $ | 10.4 |
Property and equipment |  | 28.1 |
Operating lease assets |  | 1.7 |
Goodwill |  | 15.1 |
Total other assets classified as held for sale |  | $ | 55.3 |
Prime liabilities classified as held for sale as of the acquisition date (in millions) |  |
Operating lease liabilities |  | $ | 1.7 |
The Company’s Condensed Consolidated Statement of Operations included revenues attributable to Prime for the three and nine months ended September 30, 2022, of $448.0 million and $1.3 billion, respectively, and net income attributable to Prime for the three and nine months ended September 30, 2022 of $34.2 million and $89.0 million, respectively. These revenue and net income amounts attributable to Prime include amounts up to the date of disposal, from certain stores which have been disposed of since the date of the Prime Acquisition. Other Acquisitions During the nine months ended September 30, 2022, the Company acquired five dealerships and a collision center in the U.S. Aggregate consideration paid for these dealerships, which were accounted for as business combinations, was $393.0 million, net of cash acquired. Goodwill and franchise rights intangibles associated with these acquisitions totaled $194.0 million and $93.4 million, respectively. During the nine months ended September 30, 2022, the Company acquired a dealership and related collision center in the U.K. C onsideration paid, which was accounted for as a business combination, was $32.8 million, net of cash acquired. Goodwill associated with the acquisition totaled $9.2 million. The accounting for the U.K. acquisition is considered to be preliminary, as the acquisition was announced on September 6, 2022. The Company is continuing to analyze and assess relevant information related to the valuation of property, equipment and intangible assets. Due to the recent timing of the U.K. acquisition, the related amounts are provisional and subject to change as the Company’s fair value assessments are finalized. The Company will reflect any such adjustments in subsequent filings with the SEC. During the nine months ended September 30, 2021, the Company acquired two dealerships in the U.S. and seven dealerships in the U.K. Aggregate consideration paid for these dealerships, which were accounted for as business combinations, was $74.6 million, net of cash acquired. Goodwill associated with these acquisitions totaled $41.4 million.

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- 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 https://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 https://asc.fasb.org/topic&trid=2303972 + Details
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