Business Combinations

9 Months Ended

Sep. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Business CombinationsOn August 16, 2021 and August 31, 2021 (each an “Acquisition Date” individually, and collectively, the “Acquisition Dates”), the Company acquired 100% of the equity interests in Zio Entertainment Network, LLC (“Zio”) and Star Waggons, LLC (“Star Waggons”), respectively. The acquired businesses provide transportation and logistics services to studio productions and their acquisition will expand the Company’s service offerings for its studio platform.

The following table summarizes the Acquisition Date fair value of the consideration transferred in connection with the acquisitions:


	Zio		Star Waggons
Cash	$	117,198	$	92,656
Contingent consideration	22,800		—
Total consideration	$	139,998	$	92,656

The terms of the Zio securities purchase agreement require the Company to pay up to $35.0 million of additional consideration to the business’s former shareholders, subject to certain performance thresholds being met. The Company is in the process of estimating the future cash flows related to the arrangement for the purpose of determining the final Acquisition Date fair value of the contingent consideration. Therefore, the preliminary measurement of $22.8 million is subject to change.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective Acquisition Dates. The Company is in the process of obtaining third-party valuations of certain intangible assets; thus, the provisional measurements of intangible assets and goodwill are subject to change:


	Zio		Star Waggons
Cash and cash equivalents	$	1,084	$	300
Accounts receivable	3,056		4,185
Prepaid expenses and other assets	1,509		1,605
Non-real estate property, plant and equipment	23,399		28,679
Intangible assets	41,670		33,480

Total assets acquired	70,718		68,249

Accounts payable, accrued liabilities and other	$	1,203	$	1,394
Intangible liabilities	—		110


Total liabilities assumed	1,203		1,504

Net identifiable assets acquired	$	69,515	$	66,745
Goodwill	70,483		25,911
NET ASSETS ACQUIRED	$	139,998	$	92,656

Of the $41.7 million of intangible assets acquired as part of the Zio acquisition, $8.5 million was provisionally assigned to the registered trade name, which is not subject to amortization. The remaining $33.2 million of acquired intangible assets includes customer relationships of $30.0 million (7-year useful life) and non-compete agreements of $3.0 million (5-year weighted-average useful life). The definite-lived intangible assets are subject to a weighted-average useful life of approximately 7 years.

Of the $33.5 million of intangible assets acquired as part of the Star Waggons acquisition, $8.6 million was provisionally assigned to the registered trade name, which is not subject to amortization. The remaining $24.9 million of acquired intangible assets includes customer relationships of $22.5 million (7-year useful life) and non-compete agreements of $2.3 million (5-year weighted-average useful life). The definite-lived intangible assets are subject to a weighted-average useful life of approximately 7 years.

Goodwill of $70.5 million and $25.9 million for the Zio and Star Waggons acquisitions, respectively, was recognized on the respective Acquisition Dates. The goodwill recognized is attributable to expected synergies and the assembled workforce of Zio and Star Waggons. As of September 30, 2021, there were no changes in the recognized amounts of goodwill resulting from the acquisitions.

The Company recognized acquisition-related costs of $3.4 million and $2.4 million as current period expense for the Zio and Star Waggons acquisitions, respectively. These costs are included in transaction-related expenses on the Consolidated Statement of Operations.

The amounts of revenue and net income of Zio and Star Waggons included in the Company’s Consolidated Statements of Operations from each respective Acquisition Date to September 30, 2021 are as follows:


	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
	Zio		Star Waggons		Zio		Star Waggons
Revenue	$	4,187	$	2,828	$	4,187	$	2,828
Net income	1,286		1,013		1,286		1,013