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Acquisitions, Goodwill And Other Intangible Assets | 6 Months Ended
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Jun. 30, 2021
Acquisitions, Goodwill And Other Intangible Assets [Abstract] |
Acquisitions, Goodwill And Other Intangible Assets | ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS Subsequent Event Furrion In August 2021, the Company entered into a definitive agreement to acquire Furrion Holdings Limited (“Furrion”), a leading distributor of a large range of appliances and other products to OEMs and aftermarket customers in the recreational vehicle, specialty vehicle, utility trailer, horse trailer, marine, transit bus, and school bus industries. The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions, including regulatory approval. Acquisitions Completed During the Six Months Ended June 30, 2021 Schaudt In April 2021, the Company acquired 100 percent of the equity interests of Schaudt GmbH Elektrotechnik & Apparatebau ("Schaudt"), a leading supplier of electronic controls and energy management systems for the European caravan industry located in Markdorf, Germany. The purchase price was approximately $29.4 million. The purchase price is subject to customary adjustments for cash, working capital, and indebtedness. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the Company's OEM Segment. The Company is in the process of determining the fair value of the assets acquired and liabilities assumed for the opening balance sheet, including net working capital, fixed assets, and the fair value of intangible assets. As this acquisition is not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented. The acquisition of this business was preliminarily recorded as of the acquisition date as follows (in thousands):
Cash consideration, net of cash acquired | $ | 29,383 |
Customer relationships | $ | 10,000 |
Other identifiable intangible assets | 2,500 |
Net tangible assets | 564 |
Total fair value of net assets acquired | $ | 13,064 |
Goodwill (not tax deductible) | $ | 16,319 |
The customer relationships intangible asset is being amortized over its estimated useful life of 8 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products. Ranch Hand In April 2021, the Company acquired 100 percent of the equity interests of Kaspar Ranch Hand Equipment, LLC ("Ranch Hand"), a manufacturer of custom bumpers, grill guards, and steps for the automotive aftermarket headquartered in Shiner, Texas. The purchase price was approximately $56.7 million, plus contingent consideration up to $3.0 million. The purchase price is subject to customary adjustments for cash, working capital, and indebtedness. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the Company's Aftermarket Segment. The Company is in the process of determining the fair value of the assets acquired and liabilities assumed for the opening balance sheet, including net working capital, fixed assets, and the fair value of intangible assets. As this acquisition is not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented. The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):
Cash consideration, net of cash acquired | $ | 56,709 |
Contingent consideration | 3,000 |
Total fair value of consideration given | $ | 59,709 |
Customer relationships | $ | 24,200 |
Other identifiable intangible assets | 9,100 |
Net tangible assets | 16,872 |
Total fair value of net assets acquired | $ | 50,172 |
Goodwill (tax deductible) | $ | 9,537 |
The customer relationships intangible asset is being amortized over its estimated useful life of 13 years. The fair value of this asset was determined using a discounted cash flow model, which is a Level 3 input in the fair value hierarchy. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products. Other Acquisitions in 2021 During the first six months of 2021, the Company completed two other acquisitions totaling $17.8 million of cash purchase consideration, plus holdback payments of $2.1 million to be paid over the next two years and contingent consideration of up to $2.0 million. The acquisitions are subject to potential post-closing adjustments related to net working capital. The preliminary purchase price allocations resulted in $8.8 million of goodwill (tax deductible) and $7.5 million of acquired identifiable intangible assets. The accounting for these acquisitions is incomplete at June 30, 2021. The estimated fair values of assets acquired and liabilities assumed are based on preliminary allocations and will be finalized during the respective measurement periods which will not exceed 12 months from the respective acquisition dates. As these acquisitions are not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented. Acquisitions with Measurement Period Adjustments During the Six Months Ended June 30, 2021 Veada In December 2020, the Company acquired 100 percent of the outstanding capital stock of Veada Industries, Inc. ("Veada"), a manufacturer and distributor of boat seating and marine accessories based in New Paris, Indiana. The purchase price was $69.0 million, net of cash acquired, which included initial holdback payments of $12.2 million to be paid over the next two years. Holdback payments of $3.9 million were paid; these holdback payment requirements were reduced by $0.5 million during the six months ended June 30, 2021 due to net working capital true-ups. The remaining holdback payments are recorded in the Condensed Consolidated Balance Sheet in accrued expenses and other current liabilities ($6.0 million) and other long-term liabilities ($1.8 million) at June 30, 2021. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the Company's OEM Segment. During the six months ended June 30, 2021, the Company adjusted the preliminary purchase price allocation reported at December 31, 2020 to account for updates to net working capital balances and assumptions and estimates related to the fair value of fixed assets and intangible assets. These measurement period adjustments would not have resulted in a material impact on the prior period results if the adjustments had been recognized as of the acquisition date. The purchase price allocation is subject to adjustment for the fair value of intangible assets as additional information is obtained within the measurement period (not to exceed 12 months from the acquisition date). Challenger In November 2020, the Company acquired substantially all of the business assets of Challenger Door, LLC ("Challenger"), a leading manufacturer and distributor of branded doors for the RV industry and products for specialty and cargo trailers, based in Nappanee, Indiana. The purchase price was $35.0 million, which included holdback payments of up to $4.5 million to be paid over the next two years. These holdback payment requirements were reduced by $1.7 million during the six months ended June 30, 2021 due to net working capital true-ups. The remaining holdback payments are recorded in the Condensed Consolidated Balance Sheet in accrued expenses and other current liabilities ($1.8 million) and other long-term liabilities ($1.0 million) at June 30, 2021. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the Company’s OEM Segment. During the six months ended June 30, 2021, the Company adjusted the preliminary purchase price allocation reported at December 31, 2020 to account for updates to net working capital balances and assumptions and estimates related to the fair value of fixed assets and intangible assets. These measurement period adjustments would not have resulted in a material impact on the prior period results if the adjustments had been recognized as of the acquisition date. The purchase price allocation is subject to adjustment for the fair value of intangible assets as additional information is obtained within the measurement period (not to exceed 12 months from the acquisition date). Goodwill Goodwill by reportable segment was as follows:
(In thousands) | OEM Segment |  | Aftermarket Segment |  | Total
Net balance – December 31, 2020 | $ | 305,953 |  |  | $ | 148,775 |  |  | $ | 454,728 |
Acquisitions – 2021 | 24,448 |  |  | 10,190 |  |  | 34,638 |
Measurement period adjustments | 9,456 |  |  | (23) |  |  | 9,433 |
Foreign currency translation | (2,528) |  |  | 151 |  |  | (2,377) |
Net balance – June 30, 2021 | $ | 337,329 |  |  | $ | 159,093 |  |  | $ | 496,422 |
Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist. Other Intangible Assets Other intangible assets consisted of the following at June 30, 2021:
(In thousands) | Gross Cost |  | Accumulated Amortization |  | Net Balance |  | Estimated Useful Life in Years
Customer relationships | $ | 424,433 |  |  | $ | 110,076 |  |  | $ | 314,357 |  |  | 6 | to | 17
Patents | 96,920 |  |  | 49,698 |  |  | 47,222 |  |  | 3 | to | 20
Trade names (finite life) | 74,889 |  |  | 14,240 |  |  | 60,649 |  |  | 3 | to | 20
Trade names (indefinite life) | 7,600 |  |  | — |  |  | 7,600 |  |  | Indefinite
Non-compete agreements | 7,479 |  |  | 4,702 |  |  | 2,777 |  |  | 3 | to | 6
Other | 309 |  |  | 203 |  |  | 106 |  |  | 2 | to | 12
Purchased research and development | 4,687 |  |  | — |  |  | 4,687 |  |  | Indefinite
Other intangible assets | $ | 616,317 |  |  | $ | 178,919 |  |  | $ | 437,398 |  |  |  |  |
Other intangible assets consisted of the following at December 31, 2020:
(In thousands) | Gross Cost |  | Accumulated Amortization |  | Net Balance |  | Estimated Useful Life in Years
Customer relationships | $ | 398,613 |  |  | $ | 95,443 |  |  | $ | 303,170 |  |  | 6 | to | 17
Patents | 92,128 |  |  | 47,090 |  |  | 45,038 |  |  | 3 | to | 20
Trade names (finite life) | 69,686 |  |  | 11,272 |  |  | 58,414 |  |  | 3 | to | 20
Trade names (indefinite life) | 7,600 |  |  | — |  |  | 7,600 |  |  | Indefinite
Non-compete agreements | 6,478 |  |  | 4,617 |  |  | 1,861 |  |  | 3 | to | 6
Other | 309 |  |  | 194 |  |  | 115 |  |  | 2 | to | 12
Purchased research and development | 4,687 |  |  | — |  |  | 4,687 |  |  | Indefinite
Other intangible assets | $ | 579,501 |  |  | $ | 158,616 |  |  | $ | 420,885 |  |  |  |  |
Acquisitions, Goodwill And Other Intangible Assets | ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS Subsequent Event Furrion In August 2021, the Company entered into a definitive agreement to acquire Furrion Holdings Limited (“Furrion”), a leading distributor of a large range of appliances and other products to OEMs and aftermarket customers in the recreational vehicle, specialty vehicle, utility trailer, horse trailer, marine, transit bus, and school bus industries. The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions, including regulatory approval. Acquisitions Completed During the Six Months Ended June 30, 2021 Schaudt In April 2021, the Company acquired 100 percent of the equity interests of Schaudt GmbH Elektrotechnik & Apparatebau ("Schaudt"), a leading supplier of electronic controls and energy management systems for the European caravan industry located in Markdorf, Germany. The purchase price was approximately $29.4 million. The purchase price is subject to customary adjustments for cash, working capital, and indebtedness. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the Company's OEM Segment. The Company is in the process of determining the fair value of the assets acquired and liabilities assumed for the opening balance sheet, including net working capital, fixed assets, and the fair value of intangible assets. As this acquisition is not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented. The acquisition of this business was preliminarily recorded as of the acquisition date as follows (in thousands):
Cash consideration, net of cash acquired | $ | 29,383 |
Customer relationships | $ | 10,000 |
Other identifiable intangible assets | 2,500 |
Net tangible assets | 564 |
Total fair value of net assets acquired | $ | 13,064 |
Goodwill (not tax deductible) | $ | 16,319 |
The customer relationships intangible asset is being amortized over its estimated useful life of 8 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products. Ranch Hand In April 2021, the Company acquired 100 percent of the equity interests of Kaspar Ranch Hand Equipment, LLC ("Ranch Hand"), a manufacturer of custom bumpers, grill guards, and steps for the automotive aftermarket headquartered in Shiner, Texas. The purchase price was approximately $56.7 million, plus contingent consideration up to $3.0 million. The purchase price is subject to customary adjustments for cash, working capital, and indebtedness. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the Company's Aftermarket Segment. The Company is in the process of determining the fair value of the assets acquired and liabilities assumed for the opening balance sheet, including net working capital, fixed assets, and the fair value of intangible assets. As this acquisition is not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented. The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):
Cash consideration, net of cash acquired | $ | 56,709 |
Contingent consideration | 3,000 |
Total fair value of consideration given | $ | 59,709 |
Customer relationships | $ | 24,200 |
Other identifiable intangible assets | 9,100 |
Net tangible assets | 16,872 |
Total fair value of net assets acquired | $ | 50,172 |
Goodwill (tax deductible) | $ | 9,537 |
The customer relationships intangible asset is being amortized over its estimated useful life of 13 years. The fair value of this asset was determined using a discounted cash flow model, which is a Level 3 input in the fair value hierarchy. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products. Other Acquisitions in 2021 During the first six months of 2021, the Company completed two other acquisitions totaling $17.8 million of cash purchase consideration, plus holdback payments of $2.1 million to be paid over the next two years and contingent consideration of up to $2.0 million. The acquisitions are subject to potential post-closing adjustments related to net working capital. The preliminary purchase price allocations resulted in $8.8 million of goodwill (tax deductible) and $7.5 million of acquired identifiable intangible assets. The accounting for these acquisitions is incomplete at June 30, 2021. The estimated fair values of assets acquired and liabilities assumed are based on preliminary allocations and will be finalized during the respective measurement periods which will not exceed 12 months from the respective acquisition dates. As these acquisitions are not considered to have a material impact on the Company's financial statements, pro forma results of operations and other disclosures are not presented. Acquisitions with Measurement Period Adjustments During the Six Months Ended June 30, 2021 Veada In December 2020, the Company acquired 100 percent of the outstanding capital stock of Veada Industries, Inc. ("Veada"), a manufacturer and distributor of boat seating and marine accessories based in New Paris, Indiana. The purchase price was $69.0 million, net of cash acquired, which included initial holdback payments of $12.2 million to be paid over the next two years. Holdback payments of $3.9 million were paid; these holdback payment requirements were reduced by $0.5 million during the six months ended June 30, 2021 due to net working capital true-ups. The remaining holdback payments are recorded in the Condensed Consolidated Balance Sheet in accrued expenses and other current liabilities ($6.0 million) and other long-term liabilities ($1.8 million) at June 30, 2021. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the Company's OEM Segment. During the six months ended June 30, 2021, the Company adjusted the preliminary purchase price allocation reported at December 31, 2020 to account for updates to net working capital balances and assumptions and estimates related to the fair value of fixed assets and intangible assets. These measurement period adjustments would not have resulted in a material impact on the prior period results if the adjustments had been recognized as of the acquisition date. The purchase price allocation is subject to adjustment for the fair value of intangible assets as additional information is obtained within the measurement period (not to exceed 12 months from the acquisition date). Challenger In November 2020, the Company acquired substantially all of the business assets of Challenger Door, LLC ("Challenger"), a leading manufacturer and distributor of branded doors for the RV industry and products for specialty and cargo trailers, based in Nappanee, Indiana. The purchase price was $35.0 million, which included holdback payments of up to $4.5 million to be paid over the next two years. These holdback payment requirements were reduced by $1.7 million during the six months ended June 30, 2021 due to net working capital true-ups. The remaining holdback payments are recorded in the Condensed Consolidated Balance Sheet in accrued expenses and other current liabilities ($1.8 million) and other long-term liabilities ($1.0 million) at June 30, 2021. The results of the acquired business have been included in the Condensed Consolidated Statements of Income since the acquisition date, primarily in the Company’s OEM Segment. During the six months ended June 30, 2021, the Company adjusted the preliminary purchase price allocation reported at December 31, 2020 to account for updates to net working capital balances and assumptions and estimates related to the fair value of fixed assets and intangible assets. These measurement period adjustments would not have resulted in a material impact on the prior period results if the adjustments had been recognized as of the acquisition date. The purchase price allocation is subject to adjustment for the fair value of intangible assets as additional information is obtained within the measurement period (not to exceed 12 months from the acquisition date). Goodwill Goodwill by reportable segment was as follows:
(In thousands) | OEM Segment |  | Aftermarket Segment |  | Total
Net balance – December 31, 2020 | $ | 305,953 |  |  | $ | 148,775 |  |  | $ | 454,728 |
Acquisitions – 2021 | 24,448 |  |  | 10,190 |  |  | 34,638 |
Measurement period adjustments | 9,456 |  |  | (23) |  |  | 9,433 |
Foreign currency translation | (2,528) |  |  | 151 |  |  | (2,377) |
Net balance – June 30, 2021 | $ | 337,329 |  |  | $ | 159,093 |  |  | $ | 496,422 |
Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist. Other Intangible Assets Other intangible assets consisted of the following at June 30, 2021:
(In thousands) | Gross Cost |  | Accumulated Amortization |  | Net Balance |  | Estimated Useful Life in Years
Customer relationships | $ | 424,433 |  |  | $ | 110,076 |  |  | $ | 314,357 |  |  | 6 | to | 17
Patents | 96,920 |  |  | 49,698 |  |  | 47,222 |  |  | 3 | to | 20
Trade names (finite life) | 74,889 |  |  | 14,240 |  |  | 60,649 |  |  | 3 | to | 20
Trade names (indefinite life) | 7,600 |  |  | — |  |  | 7,600 |  |  | Indefinite
Non-compete agreements | 7,479 |  |  | 4,702 |  |  | 2,777 |  |  | 3 | to | 6
Other | 309 |  |  | 203 |  |  | 106 |  |  | 2 | to | 12
Purchased research and development | 4,687 |  |  | — |  |  | 4,687 |  |  | Indefinite
Other intangible assets | $ | 616,317 |  |  | $ | 178,919 |  |  | $ | 437,398 |  |  |  |  |
Other intangible assets consisted of the following at December 31, 2020:
(In thousands) | Gross Cost |  | Accumulated Amortization |  | Net Balance |  | Estimated Useful Life in Years
Customer relationships | $ | 398,613 |  |  | $ | 95,443 |  |  | $ | 303,170 |  |  | 6 | to | 17
Patents | 92,128 |  |  | 47,090 |  |  | 45,038 |  |  | 3 | to | 20
Trade names (finite life) | 69,686 |  |  | 11,272 |  |  | 58,414 |  |  | 3 | to | 20
Trade names (indefinite life) | 7,600 |  |  | — |  |  | 7,600 |  |  | Indefinite
Non-compete agreements | 6,478 |  |  | 4,617 |  |  | 1,861 |  |  | 3 | to | 6
Other | 309 |  |  | 194 |  |  | 115 |  |  | 2 | to | 12
Purchased research and development | 4,687 |  |  | — |  |  | 4,687 |  |  | Indefinite
Other intangible assets | $ | 579,501 |  |  | $ | 158,616 |  |  | $ | 420,885 |  |  |  |  |

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- Definition Acquisitions Goodwill And Other Intangible Assets Abstract + References No definition available. + Details
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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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