Business Combinations

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

On 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 and 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	22,543		—
Total consideration	$	139,741	$	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 $22.5 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	3,001		4,185
Prepaid expenses and other assets	1,509		1,605
Non-real estate property, plant and equipment	23,399		25,000
Intangible assets	41,670		33,480

Total assets acquired	70,663		64,570

Accounts payable, accrued liabilities and other	$	1,498	$	1,913
Intangible liabilities	—		110


Total liabilities assumed	1,498		2,023

Net identifiable assets acquired	$	69,165	$	62,547
Goodwill	70,576		30,109
NET ASSETS ACQUIRED	$	139,741	$	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 (seven-year useful life) and non-compete agreements of $3.0 million (five-year weighted-average useful life). The definite-lived intangible assets are subject to a weighted-average useful life of approximately seven 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 valued at $22.5 million (seven-year useful life) and non-compete agreements valued at $2.3 million (five-year weighted-average useful life). The definite-lived intangible assets are subject to a weighted-average useful life of approximately seven years.

Goodwill of $70.6 million and $30.1 million for the Zio and Star Waggons acquisitions, respectively, was recognized on the respective Acquisition Dates. The goodwill recognized is attributable to the expected synergies and the assembled workforce of Zio and Star Waggons. The goodwill has been allocated to the studio services reporting unit. Goodwill is deductible tax purposes and as a result, deferred taxes have been recorded. As of December 31, 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 December 31, 2021 are as follows:


	Zio		Star Waggons
Revenue	$	11,419	$	9,651
Income from Operations	$	2,395	$	2,947

The following represents the pro forma Consolidated Statements of Operations as if the results of operations of Zio and Star Waggons had been included in the consolidated results of the Company for the years ended December 31, 2021 and 2020:


	Year Ended December 31, 2021		Year Ended December 31, 2020
Revenue	$	933,229	$	830,463
Income from Operations	$	38,884	$	8,159

The amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Zio and

Star Waggons to reflect the additional depreciation and amortization that would have been charged assuming the fair value

adjustments to property, plant and equipment and intangible assets had been applied on January 1, 2020.