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Acquisitions | 12 Months Ended
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Aug. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions | ACQUISITIONS Fiscal Year 2024 Acquisitions SMRT Asset Acquisition In December 2023, the Company acquired certain intellectual property assets from Schmitz Manufacturing Research & Technology LLC (“SMRT”), a leading company in mechanical, aerospace and manufacturing engineering. The acquired assets relate to SMRT’s technology assets for the United States manufacturing industry. With this investment, the Company intends to enhance its ability to create and advance technology for the United States machining industry to strengthen its market leadership in metalworking. This acquisition was accounted for as an asset acquisition, as the fair value of the gross assets acquired is concentrated in the value of the SMRT intellectual property intangible assets. The total cost of the acquisition was $2,894, inclusive of approximately $145 of transaction-related costs and $1,200 of deferred consideration payable to the sellers, in accordance with the asset purchase agreement. The Company allocated the total cost of the acquisition to intellectual property intangible assets and assigned the assets a useful life of five years. Acquisition of KAR In January 2024, the Company acquired 100% of the outstanding shares of privately held KAR Industrial Inc. (“KAR”), a Canada-based metalworking distributor, for aggregate consideration of $8,894, which includes cash paid of $8,294 and the fair value of contingent consideration to be paid out of $600. The fair value of the contingent consideration to be paid out represents the present value of the $747 contingent consideration as of the acquisition date based on a Monte Carlo Simulation approach. Total cash consideration funded by the Company came from available cash resources. KAR specializes in measuring and cutting tools, machine tool accessories and other manufacturing-related supplies across Canada’s industrial landscape. The Company expects to capitalize on KAR’s metalworking expertise, knowledge of the Canadian market and value-added services by offering KAR’s customers access to the full breadth of MSC Industrial’s product portfolio, including E-commerce capabilities. This acquisition was accounted for as a single business acquisition pursuant to ASC Topic 805. As required by ASC Topic 805, the Company allocated the consideration to assets and liabilities based on their fair value at the acquisition date. The following table summarizes the amounts of identified assets acquired and liabilities assumed based on the fair value at the acquisition date:
Cash | $ | 129
Inventories | 3,130
Accounts receivable | 1,987
Prepaid expenses and other current assets | 115
Identifiable intangibles | 971
Goodwill | 3,860
Property, plant and equipment | 45
Total assets acquired | $ | 10,237
Accounts payable | 1,180
Accrued liabilities | 163
Total liabilities assumed | $ | 1,343
Total purchase price consideration | $ | 8,894
Acquired identifiable intangible assets with a fair value of $971 consisted of customer relationships of $747 with useful lives of 10 years and trade names of $224 with useful lives of five years. The goodwill amount of $3,860 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The primary items that generated the goodwill were the premiums paid by the Company for the right to control the business acquired and the benefit of expanding the Company’s metalworking footprint within the Canadian market. This goodwill will not be amortized and will be included in the Company’s periodic test for impairment at least annually. The goodwill is non-deductible for income tax purposes. The amount of combined net sales and income before provision for income taxes from KAR included in the Consolidated Statement of Income for the fiscal year ended August 31, 2024 was $10,020 and $240, respectively. In addition, the Company incurred non-recurring transaction and integration costs relating to the acquisition totaling $479, which are included in Operating expenses in the Consolidated Statement of Income for the fiscal year ended August 31, 2024. Acquisition of ApTex In June 2024, the Company acquired 100% of the outstanding shares of privately held ApTex, Inc. (“ApTex”), a Waukesha, Wisconsin-based metalworking distributor focusing on cutting tools and abrasives, for aggregate consideration of $5,564, which includes a post-closing working capital adjustment paid to the sellers in the amount of $79. Total cash consideration funded by the Company came from available cash resources. This acquisition was accounted for as a single business acquisition pursuant to ASC Topic 805. As required by ASC Topic 805, the Company allocated the consideration to assets and liabilities based on their fair value at the acquisition date. The following table summarizes the amounts of identified assets acquired and liabilities assumed based on the fair value at the acquisition date:
Cash | $ | 35
Inventories | 2,339
Accounts receivable | 1,746
Prepaid expenses and other current assets | 154
Identifiable intangibles | 940
Goodwill | 1,108
Property, plant and equipment | 346
Total assets acquired | $ | 6,668
Accounts payable | 945
Accrued liabilities | 159
Total liabilities assumed | $ | 1,104
Total purchase price consideration | $ | 5,564
Acquired identifiable intangible assets with a fair value of $940 consisted of customer relationships of $820 with useful lives of 12 years and trade names of $120 with useful lives of three years. The goodwill amount of $1,108 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The primary items that generated the goodwill were the premiums paid by the Company for the right to control the business acquired and the benefit of expanding the Company’s metalworking footprint in the Midwest. This goodwill will not be amortized and will be included in the Company’s periodic test for impairment at least annually. The goodwill is non-deductible for income tax purposes. The amount of combined net sales and income before provision for income taxes from ApTex included in the Consolidated Statement of Income for the fiscal year ended August 31, 2024 was $4,395 and $152, respectively. In addition, the Company incurred non-recurring transaction and integration costs relating to the acquisition totaling $327, which are included in Operating expenses in the Consolidated Statement of Income for the fiscal year ended August 31, 2024. Acquisition of Premier In June 2024, the Company acquired certain assets and assumed certain liabilities of Premier Tool Grinding, Inc. (“Premier”), a Goodyear, Arizona-based carbide cutting tool manufacturer, for aggregate consideration of $10,632, which includes a post-closing working capital adjustment paid to the sellers in the amount of $121 and $2,000 deferred consideration payable to the sellers. Total cash consideration funded by the Company came from available cash resources. This acquisition was accounted for as a single business acquisition pursuant to ASC Topic 805. As required by ASC Topic 805, the Company allocated the consideration to assets and liabilities based on their fair value at the acquisition date. The following table summarizes the amounts of identified assets acquired and liabilities assumed based on the fair value at the acquisition date:
Cash | $ | 30
Inventories | 754
Accounts receivable | 657
Identifiable intangibles | 1,910
Goodwill | 1,530
Property, plant and equipment | 6,119
Total assets acquired | $ | 11,000
Accounts payable | 368
Total liabilities assumed | $ | 368
Total purchase price consideration | $ | 10,632
Acquired identifiable intangible assets with a fair value of $1,910 consisted of customer relationships of $1,670 with useful lives of 12 years, trade names of $150 with useful lives of five years and non-compete agreements of $90 with a useful life of five years. The goodwill amount of $1,530 represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The primary items that generated the goodwill were the premiums paid by the Company for the right to control the business acquired and the benefit of expanding the Company’s tooling and regrinding service offering. This goodwill will not be amortized and will be included in the Company’s periodic test for impairment at least annually. The goodwill is deductible for income tax purposes. The amount of combined net sales and income before provision for income taxes from Premier included in the Consolidated Statement of Income for the fiscal year ended August 31, 2024 was $1,353 and $95, respectively. In addition, the Company incurred non-recurring transaction and integration costs relating to the acquisition totaling $273, which are included in Operating expenses in the Consolidated Statement of Income for the fiscal year ended August 31, 2024. Fiscal Year 2023 Acquisitions Acquisition of Buckeye and Tru-Edge In January 2023, the Company acquired certain assets and assumed certain liabilities of Buckeye Industrial Supply Co. (“Buckeye”), an Ohio-based metalworking distributor, and Tru-Edge Grinding, Inc. (“Tru-Edge”), an Ohio-based custom tool manufacturer, for aggregate consideration of $22,389, which included cash paid of $20,500 and the fair value of contingent consideration to be paid out of $2,294, net of a post-closing working capital adjustment in the amount of $405 received from the sellers that was finalized during the third quarter of fiscal year 2023. Total cash consideration funded by the Company came from available cash resources.

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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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