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Acquisitions, Goodwill And Other Intangible Assets | 12 Months Ended
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Dec. 31, 2023
Acquisitions, Goodwill And Other Intangible Assets [Abstract] |
Acquisitions, Goodwill and Other Intangible Assets | ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS Acquisitions in 2023 During the year ended December 31, 2023, the Company completed two acquisitions for an aggregate $25.8 million of cash purchase consideration, plus holdback payments of $0.2 million to be paid in 2025. The preliminary purchase price allocations resulted in $16.8 million of goodwill (tax deductible). 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 in 2022 Way In November 2022, the Company acquired substantially all of the business assets of Way Interglobal Network LLC ("Way"), a distributor of innovative appliances and electronics to OEMs in the RV industry. The Company paid $52.8 million in cash consideration at closing, subject to adjustment as a result of net working capital true-up procedures, and with deferred consideration of $2.0 million originally due on the first anniversary of the acquisition in November 2023. The Company completed a reconciliation of net working capital with the seller, which resulted in a reduction of the purchase price by $15.4 million. This purchase price reduction resulted in the cancellation of the holdback payment and recognition of a receivable from the seller. Following these adjustments, the Company determined that the total fair value of the consideration given was $39.3 million. The results of the acquired business have been included in the Consolidated Statements of Income since the acquisition date, primarily in the Company's OEM Segment. As the operations of this acquisition 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. During the year ended December 31, 2023, the Company adjusted and finalized the preliminary purchase price allocation reported at December 31, 2022 to account for updates to net working capital and the fair value of 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 acquisition of this business was preliminarily recorded as of the acquisition date, and subsequently adjusted and finalized, as follows (in thousands):
| Preliminary at December 31, 2022 |  | Measurement Period Adjustments |  | As Adjusted at December 31, 2023
Cash consideration | $ | 52,761 |  |  | $ | — |  |  | $ | 52,761 |
Net working capital receivable | — |  |  | (13,446) |  |  | (13,446) |
Fixed deferred consideration | 2,000 |  |  | (2,000) |  |  | — |
Total fair value of consideration given | $ | 54,761 |  |  | $ | (15,446) |  |  | $ | 39,315 |
Identifiable intangible assets | $ | 13,000 |  |  | $ | 2,200 |  |  | $ | 15,200 |
Other assets acquired and liabilities assumed, net | 36,783 |  |  | (21,851) |  |  | 14,932 |
Total fair value of net assets acquired | $ | 49,783 |  |  | $ | (19,651) |  |  | $ | 30,132 |
Goodwill (tax deductible) | $ | 4,978 |  |  | $ | 4,205 |  |  | $ | 9,183 |
The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill. Girard In March 2022, the Company acquired substantially all of the business assets of Girard Systems and Girard Products LLC (collectively "Girard"), a manufacturer and distributor of proprietary awnings and tankless water heaters for OEMs and aftermarket customers in the RV, specialty vehicle, and related industries. The total fair value of consideration was approximately $70.7 million. The Company paid $50.0 million in cash consideration at closing, with fixed deferred consideration of $20.0 million paid in July 2022 and $0.7 million paid to true up net working capital in September 2022. The results of the acquired business have been included in the Consolidated Statements of Income since the acquisition date, in both the Company's OEM and Aftermarket Segments. Other Acquisitions in 2022 During the twelve months ended December 31, 2022, the Company completed two other acquisitions for $5.0 million of cash purchase consideration. The preliminary purchase price allocations resulted in $0.8 million of goodwill (tax deductible). Acquisitions in 2021 Exertis In October 2021, the Company acquired certain business assets of Stampede Presentation Products, Inc. d/b/a Exertis ("Exertis"), a global distribution company, in exchange for $39.7 million. The acquisition qualifies as a business combination for accounting purposes and supports the acquisition of Furrion Holdings Limited ("Furrion") by allowing the Company to provide logistics and warehousing to serve Furrion's North American customer base. The results of the acquired business have been included in the Consolidated Statements of Income since the acquisition date, primarily in the Company's OEM Segment. Furrion In September 2021, the Company acquired 100 percent of the share capital of Furrion, a leading distributor of a large range of appliances and other products to OEMs and aftermarket customers in the RV, specialty vehicle, utility trailer, horse trailer, marine, transit bus, and school bus industries. The total fair value of consideration, net of cash acquired, was approximately $146.7 million. The Company paid $50.5 million in cash consideration at closing, net of cash acquired, with fixed payments of $31.3 million paid on each of the first and second anniversaries of the acquisition in September 2022 and September 2023. The results of the acquired business have been included in the Consolidated Statements of Income since the acquisition date, in both the Company's OEM and Aftermarket Segments. The Company incurred costs during the year ended December 31, 2021 related specifically to this acquisition of $2.3 million, which are included in selling, general and administrative expenses in the Consolidated Statements of Income. 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 results of the acquired business have been included in the Consolidated Statements of Income since the acquisition date, primarily in the Company's OEM Segment. 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 $56.9 million, plus contingent consideration up to $3.0 million. The results of the acquired business have been included in the Consolidated Statements of Income since the acquisition date, primarily in the Company's Aftermarket Segment. Other Acquisitions in 2021 During the year ended December 31, 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 two years following the closings of the respective acquisitions and contingent consideration of up to $2.0 million. Holdback payments of $0.5 million, $1.0 million, and $0.6 million were paid during the years ended December 31, 2023, 2022, and 2021, respectively, related to these acquisitions. The purchase price allocations resulted in $8.6 million of goodwill (tax deductible) and $7.8 million of acquired identifiable intangible assets. Goodwill Changes in the carrying amount of goodwill by reportable segment were as follows:
(In thousands) | OEM Segment |  | Aftermarket Segment |  | Total
Net balance – December 31, 2021 | $ | 379,463 |  |  | $ | 163,717 |  |  | $ | 543,180 |
Acquisitions | 16,302 |  |  | 2,202 |  |  | 18,504 |
Measurement period adjustments | 10,917 |  |  | 2,370 |  |  | 13,287 |
Foreign currency translation | (6,946) |  |  | (962) |  |  | (7,908) |
Net balance – December 31, 2022 | 399,736 |  |  | 167,327 |  |  | 567,063 |
Acquisitions and divestitures | 14,025 |  |  | — |  |  | 14,025 |
Measurement period adjustments | 5,708 |  |  | 160 |  |  | 5,868 |
Foreign currency translation | 2,232 |  |  | 362 |  |  | 2,594 |
Net balance – December 31, 2023 | $ | 421,701 |  |  | $ | 167,849 |  |  | $ | 589,550 |
The Company performed its annual goodwill impairment procedures for all of its reporting units as of November 30, 2023, 2022, and 2021, and concluded no goodwill impairment existed at any of those times. The Company plans to update its assessment as of November 30, 2024, or sooner if events occur or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. The goodwill balance as of each of December 31, 2023, 2022, and 2021 included $50.5 million of accumulated impairment, which occurred prior to December 31, 2021. Other Intangible Assets Other intangible assets, by segment, at December 31 were as follows:
(In thousands) | 2023 |  | 2022 |  |
OEM Segment | $ | 276,622 |  |  | $ | 314,828 |  |  |
Aftermarket Segment | 172,137 |  |  | 188,492 |  |  |
Other intangible assets | $ | 448,759 |  |  | $ | 503,320 |  |  |
Other intangible assets consisted of the following at December 31, 2023:
(In thousands) | Gross Cost |  | Accumulated Amortization |  | Net Balance |  | Estimated Useful Life in Years
Customer relationships | $ | 509,505 |  |  | $ | 189,967 |  |  | $ | 319,538 |  |  | 6 | to | 20
Patents | 114,864 |  |  | 67,602 |  |  | 47,262 |  |  | 3 | to | 20
Trade names (finite life) | 99,366 |  |  | 26,978 |  |  | 72,388 |  |  | 3 | to | 20
Trade names (indefinite life) | 7,600 |  |  | — |  |  | 7,600 |  |  | Indefinite
Non-compete agreements | 10,104 |  |  | 8,453 |  |  | 1,651 |  |  | 3 | to | 6
Other | 609 |  |  | 289 |  |  | 320 |  |  | 2 | to | 12
Other intangible assets | $ | 742,048 |  |  | $ | 293,289 |  |  | $ | 448,759 |  |  |  |  |
The Company performed its annual impairment test for indefinite lived intangible assets as of November 30, 2023, 2022, and 2021, and concluded no impairment existed at any of those times. Other intangible assets consisted of the following at December 31, 2022:
(In thousands) | Gross Cost |  | Accumulated Amortization |  | Net Balance |  | Estimated Useful Life in Years
Customer relationships | $ | 520,273 |  |  | $ | 163,562 |  |  | $ | 356,711 |  |  | 6 | to | 20
Patents | 121,167 |  |  | 62,841 |  |  | 58,326 |  |  | 3 | to | 20
Trade names (finite life) | 97,810 |  |  | 21,380 |  |  | 76,430 |  |  | 3 | to | 20
Trade names (indefinite life) | 7,600 |  |  | — |  |  | 7,600 |  |  | Indefinite
Non-compete agreements | 11,584 |  |  | 7,698 |  |  | 3,886 |  |  | 3 | to | 6
Other | 609 |  |  | 242 |  |  | 367 |  |  | 2 | to | 12
Other intangible assets | $ | 759,043 |  |  | $ | 255,723 |  |  | $ | 503,320 |  |  |  |  |
Amortization expense related to other intangible assets was as follows for the years ended December 31:
(In thousands) | 2023 |  | 2022 |  | 2021
Cost of sales | $ | 9,910 |  |  | $ | 10,155 |  |  | $ | 5,783 |
Selling, general and administrative expense | 47,165 |  |  | 46,218 |  |  | 41,782 |
Amortization expense | $ | 57,075 |  |  | $ | 56,373 |  |  | $ | 47,565 |
Estimated amortization expense for other intangible assets for the next five years is as follows:
(In thousands) | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028
Cost of sales | $ | 8,872 |  |  | $ | 7,908 |  |  | $ | 6,679 |  |  | $ | 5,945 |  |  | $ | 5,901 |
Selling, general and administrative expense | 45,371 |  |  | 42,050 |  |  | 40,145 |  |  | 39,085 |  |  | 35,929 |
Amortization expense | $ | 54,243 |  |  | $ | 49,958 |  |  | $ | 46,824 |  |  | $ | 45,030 |  |  | $ | 41,830 |

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