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Business Combinations | 3 Months Ended
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Jun. 29, 2024
Business Combinations [Abstract] |
Business Combinations | 2. Business Combinations Regional Homes Acquisition On October 13, 2023, the Company acquired all of the outstanding equity interests in Regional Enterprises, LLC and related companies (collectively, "Regional Homes") for total purchase consideration of $316.9 million, net of assumed indebtedness and working capital adjustments. The purchase consideration consisted of net cash of $279.5 million, the issuance of 455,098 shares of common stock equal to approximately $27.9 million, and contingent consideration with an estimated fair value of $5.9 million. The contingent consideration is related to an earnout provision in the event certain conditions are met per the terms of the purchase agreement, with a maximum earnout amount of $25.0 million. The initial fair value of the earnout was established using a Monte Carlo simulation method and the resulting liability is recorded in other liabilities in the accompanying Condensed Consolidated Balance Sheets. In the first quarter of fiscal 2025, the method and timing of measuring the earnout was amended, which resulted in a charge of $7.9 million which is reflected in selling, general, and administrative expense in the accompanying Condensed Consolidated Income Statements. The Company accounted for the acquisition as a business combination under the acquisition method of accounting provided by FASB ASC 805, Business Combinations ("ASC 805"). As such, the purchase price was allocated to the net assets acquired, inclusive of intangible assets, with the excess fair value recorded to goodwill. The purchase price allocation is based upon preliminary valuation information available to determine the fair value of certain assets and liabilities, including goodwill, and is subject to change as additional information is obtained about the facts and circumstances that existed at the valuation date. The Company expects to finalize the fair values of the assets acquired and liabilities assumed during the one-year measurement period. The following table presents the consideration transferred and the purchase price allocation:
Description |  | Amount |
Fair value of consideration transferred |  |  |
Fair value of Champion Homes, Inc. common stock issued as consideration (455,098 shares at $61.20) |  | $ | 27,852 |
Cash consideration, net of cash acquired |  |  | 279,545 |
Working capital adjustment |  |  | 3,644 |
Estimated earn out consideration |  |  | 5,904 |
Total consideration |  | $ | 316,945 |
Preliminary purchase price allocations: |  |  |
Trade accounts receivable |  |  | 16,300 |
Inventories |  |  | 138,933 |
Other current assets |  |  | 3,002 |
Property, plant, and equipment, net |  |  | 86,174 |
Amortizable intangible assets, net |  |  | 41,800 |
Other noncurrent assets |  |  | 10,640 |
Floor plan payable |  |  | (75,916 | )
Accounts payable |  |  | (14,427 | )
Other current liabilities |  |  | (35,662 | )
Long-term debt |  |  | (12,233 | )
Other liabilities |  |  | (3,065 | )
Identifiable net assets acquired |  |  | 155,546 |
Goodwill |  |  | 161,399 |
Total purchase price |  | $ | 316,945 |
Trade accounts receivable, other assets, floor plan and accounts payable, long-term debt and other liabilities are generally stated at historical carrying values as they approximate fair value. Retail inventories are reflected at manufacturer wholesale prices. Intangible assets include $16.9 million in customer relationships and $24.9 million in trade names and are based on an independent appraisal. The fair value of customer relationships was determined using the multi-period excess earnings method and fair value of the trade name was determined using the relief-from-royalty method. The Company estimated that each intangible asset has a weighted average useful life of ten years from the acquisition date. Fair value estimates of property, plant, and equipment were based on independent appraisals, giving consideration to the highest and best use of the assets. Key assumptions used in the appraisals were drawn from a combination of market, cost, and sales comparison approaches, as appropriate. Level 3 fair value estimates of $86.2 million related to property, plant, and equipment and $41.8 million related to intangible assets were recorded in the accompanying consolidated balance sheet as of the acquisition date. For further information on acquired assets measured at fair value, see Note 5, Goodwill, Intangible Assets and Cloud Computing Arrangements. The acquisition of Regional Homes was a taxable business combination. Therefore, the Company’s tax basis in the assets acquired and the liabilities assumed approximate the respective fair values at 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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