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Acquisitions | 12 Months Ended
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May 31, 2025
Business Combinations [Abstract] |
Acquisitions | Note P – Acquisitions Ragasco (fiscal 2025) On June 3, 2024, we acquired Ragasco, a leading global manufacturer of composite propane cylinders based in Norway. The total purchase price, after adjustment for final working capital, consisted of cash consideration of $108,563, of which $11,343 was on deposit at May 31, 2024, and contingent consideration tied to calendar 2024 results with an estimated acquisition-date fair value of $7,139. The contingent liability was settled in March 2025 for approximately $11,500, resulting in a charge of $4,536 within restructuring and other expense, net. Ragasco operates as part of the Building Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition. Pro forma results, including the acquired business since the beginning of fiscal 2023, would not be materially different from reported results. The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill, which is not expected to be deductible for income tax purposes. The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. In connection with the acquisition of Ragasco, we identified and valued the following intangible assets:
|  |  |  |  |  |  | Useful Life
Category |  |  |  | Amount |  |  | (Years)
Trade name |  | $ | 4,379 |  |  | 10
Technological know-how |  |  | 14,659 |  |  | 10
Customer relationships |  |  | 12,660 |  |  | 15
Total acquired identifiable intangible assets |  | $ | 31,698 |  |  |
The following table summarizes the consideration paid and the final fair value assigned to the assets and liabilities assumed at the acquisition date.
|  |  |  |  | Measurement |  |  |  |
|  | Preliminary |  |  | Period |  |  | Final |
|  | Valuation |  |  | Adjustments |  |  | Valuation |
Cash and cash equivalents |  | $ | 1,925 |  |  | $ | - |  |  | $ | 1,925 |
Accounts receivable |  |  | 8,554 |  |  |  | - |  |  |  | 8,554 |
Inventory |  |  | 16,403 |  |  |  | - |  |  |  | 16,403 |
Other current assets |  |  | 990 |  |  |  | - |  |  |  | 990 |
Property, plant and equipment |  |  | 27,325 |  |  |  | - |  |  |  | 27,325 |
Operating lease assets |  |  | 8,834 |  |  |  | - |  |  |  | 8,834 |
Deferred income taxes |  |  | 365 |  |  |  | - |  |  |  | 365 |
Intangible assets |  |  | 32,840 |  |  |  | (1,142 | ) |  |  | 31,698 |
Total identifiable assets |  |  | 97,236 |  |  |  | (1,142 | ) |  |  | 96,094 |
Accounts payable |  |  | (4,885 | ) |  |  | - |  |  |  | (4,885 | )
Current operating lease liability |  |  | (980 | ) |  |  | - |  |  |  | (980 | )
Accrued expenses |  |  | (6,344 | ) |  |  | - |  |  |  | (6,344 | )
Noncurrent operating lease liability |  |  | (7,886 | ) |  |  | - |  |  |  | (7,886 | )
Deferred income taxes |  |  | (9,226 | ) |  |  | 251 |  |  |  | (8,975 | )
Other liabilities |  |  | (100 | ) |  |  | - |  |  |  | (100 | )
Net identifiable assets |  |  | 67,815 |  |  |  | (891 | ) |  |  | 66,924 |
Goodwill |  |  | 40,748 |  |  |  | 891 |  |  |  | 41,639 |
Purchase price |  | $ | 108,563 |  |  | $ | - |  |  | $ | 108,563 |
Halo (fiscal 2024) On February 1, 2024, we acquired an 80% controlling interest in Halo, a newly formed joint venture with HPG, for total cash consideration of $9,588. The remaining 20% noncontrolling interest was retained by HPG. Halo is an asset-light business with technology-enabled solutions in the outdoor cooking space with products that include Halo TM branded pizza ovens, pellet grills, griddles and other accessories. Halo is part of the Consumer Products operating segment and its operating results have been included in our consolidated statement of earnings since the date of acquisition. Pro forma results, including the acquired business since the beginning of fiscal 2023, would not be materially different than the reported results. The information included herein is based on the preliminary allocation of the purchase price using estimates of the fair value and useful lives of the assets acquired. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets acquired is fully evaluated by us, including but not limited to, the fair value accounting. The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill which will be deductible by us for income tax purposes. The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. In connection with the acquisition of Halo, we identified and valued the following intangible assets:
|  |  |  |  |  |  | Useful Life
Category |  |  |  | Amount |  |  | (Years)
Trade name |  |  |  | $ | 3,500 |  |  | 10
Product design/know-how |  |  |  |  | 800 |  |  | 8
Customer relationships |  |  |  |  | 200 |  |  | 8
Total acquired identifiable intangible assets |  |  |  | $ | 4,500 |  |  |
The following table summarizes the consideration transferred and the estimated fair value assigned to the assets acquired and liabilities assumed at the acquisition date. These amounts reflect various preliminary fair value estimates and assumptions, including preliminary work performed by a third-party valuation specialist, and are subject to change within the measurement period as the valuation is finalized. The primary areas of preliminary purchase price allocation subject to change relate to the valuation of acquired tangible assets and liabilities, identification and valuation of residual goodwill and tax effects of acquired assets and assumed liabilities.
|  |  |  |  | Measurement |  |  |  |
|  | Preliminary |  |  | Period |  |  | Final |
|  | Valuation |  |  | Adjustments |  |  | Valuation |
Cash |  | $ | 73 |  |  | $ | - |  |  | $ | 73 |
Accounts receivable |  |  | 255 |  |  |  | - |  |  |  | 255 |
Inventories |  |  | 5,511 |  |  |  | 269 |  |  |  | 5,780 |
Property, plant and equipment |  |  | 1,732 |  |  |  | - |  |  |  | 1,732 |
Intangible assets |  |  | 4,500 |  |  |  | - |  |  |  | 4,500 |
Total identifiable assets |  |  | 12,071 |  |  |  | 269 |  |  |  | 12,340 |
Accounts payable |  |  | (7,363 | ) |  |  | 17 |  |  |  | (7,346 | )
Other accrued items |  |  | (1,099 | ) |  |  | - |  |  |  | (1,099 | )
Net identifiable assets |  |  | 3,609 |  |  |  | 286 |  |  |  | 3,895 |
Goodwill |  |  | 8,302 |  |  |  | (212 | ) |  |  | 8,090 |
Net assets |  |  | 11,911 |  |  |  | 74 |  |  |  | 11,985 |
Noncontrolling interest |  |  | (2,392 | ) |  |  | (5 | ) |  |  | (2,397 | )
Total cash consideration |  | $ | 9,519 |  |  | $ | 69 |  |  | $ | 9,588 |
Level5 (fiscal 2023) On June 2, 2022, we acquired Level5, a leading provider of drywall tools and related accessories. The total purchase price was $59,321, including $2,000 attributed to an earnout agreement with the selling shareholders, that provides for up to an additional $25,000 of cash consideration should certain earnings targets be met annually through calendar year 2024. The earnout agreement also requires continued employment of a selling shareholder during the duration of the earnout period. Accordingly, payments to this key employee, to the extent earned, will be accounted for as post-combination compensation expense. As of May 31, 2024, there was no accrual recorded for anticipated payments under the third earnout period ending December 31, 2024. Level5 is part of the Consumer Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition. Proforma results, including the acquired business since the beginning of fiscal 2022, would not be materially different from the reported results. The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. In connection with the acquisition of Level5, we identified and valued the following intangible assets:
Category |  | Amount |  |  | Useful Life (Years)
Trade name |  | $ | 13,500 |  |  | Indefinite
Customer relationships |  |  | 13,300 |  |  | 10
Technological know-how |  |  | 6,500 |  |  | 20
Non-compete agreement |  |  | 280 |  |  | 3
Total acquired identifiable intangible assets |  | $ | 33,580 |  |  |
The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under applicable accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill which will be deductible by us for income tax purposes. The following table summarizes the consideration paid the final fair value assigned to the assets and liabilities assumed at the acquisition date:
|  |  |  |  | Measurement |  |  |  |
|  | Preliminary |  |  | Period |  |  | Final |
|  | Valuation |  |  | Adjustments |  |  | Valuation |
Cash and cash equivalents |  | $ | 1,515 |  |  | $ | - |  |  | $ | 1,515 |
Accounts receivable |  |  | 2,860 |  |  |  | - |  |  |  | 2,860 |
Inventories |  |  | 9,161 |  |  |  | - |  |  |  | 9,161 |
Prepaid expenses |  |  | 64 |  |  |  | - |  |  |  | 64 |
Property, plant and equipment |  |  | 273 |  |  |  | - |  |  |  | 273 |
Intangible assets |  |  | 33,580 |  |  |  | - |  |  |  | 33,580 |
Operating lease assets |  |  | 377 |  |  |  | - |  |  |  | 377 |
Total identifiable assets |  |  | 47,830 |  |  |  | - |  |  |  | 47,830 |
Accounts payable |  |  | (3,175 | ) |  |  | - |  |  |  | (3,175 | )
Accrued expenses |  |  | (904 | ) |  |  | 151 |  |  |  | (753 | )
Current operating lease liabilities |  |  | (111 | ) |  |  | - |  |  |  | (111 | )
Noncurrent operating lease liabilities |  |  | (266 | ) |  |  | - |  |  |  | (266 | )
Net identifiable assets |  |  | 43,374 |  |  |  | 151 |  |  |  | 43,525 |
Goodwill |  |  | 15,947 |  |  |  | - |  |  |  | 15,947 |
Total purchase price |  |  | 59,321 |  |  |  | 151 |  |  |  | 59,472 |
Less: Fair value of earnout |  |  | (2,000 | ) |  |  | - |  |  |  | (2,000 | )
Plus: Net working capital deficit |  |  | 282 |  |  |  | (151 | ) |  |  | 131 |
Cash purchase price |  | $ | 57,603 |  |  | $ | - |  |  | $ | 57,603 |

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