Acquisitions

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

On February 29, 2024, we acquired 100% of M&F Management and Financing GmbH ("M&F"), the parent company of TCS EMEA GmbH ("TCS"), as we seek to accelerate growth in the EMEA region.

Based in Austria, TCS was Tennant Company's largest Central and Eastern Europe distributor. The acquisition gives Tennant a knowledgeable and experienced sales force and an established direct channel into countries including Romania, Hungary, Czech Republic, and Slovakia, along with an expanded network in Austria, Switzerland, Poland, and other nations in the region, as well as the Middle East and Africa.

Our consolidated financial results for the three months ended September 30, 2024 include $7.5 million of revenue and $1.1 million of net income related to TCS. Our consolidated financial results for the nine months ended September 30, 2024 include $16.6 million of revenue and $2.3 million of net income related to TCS. The proforma impact of this acquisition is immaterial to our operations.

The purchase price has been preliminarily allocated based on the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition. The preliminary purchase price allocation is subject to further refinement and may require adjustments to arrive at the final purchase price allocation. These changes will

primarily relate to the impacts associated with income taxes. Such finalization may result in material changes from the preliminary purchase price allocation.

The following table summarizes the preliminary fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:


	March 31, 2024		Adjustments		June 30, 2024
Components of purchase price:
Cash paid	$	30.8	$	0.2	$	31.0
Settlement of preexisting transactions	3.9		—		3.9
Total purchase price	34.7		0.2		34.9

ASSETS
Cash	5.3		0.1		5.4
Other current assets	8.0		(0.7)		7.3
Intangible assets subject to amortization
Customer lists	13.6		(0.4)		13.2
Backlog	0.6		—		0.6
Other assets	5.3		0.3		5.6
Total identifiable assets acquired	32.8		(0.7)		32.1
LIABILITIES
Current liabilities	(1.5)		—		(1.5)
Long-term liabilities	(5.0)		(0.2)		(5.2)
Total identifiable liabilities assumed	(6.5)		(0.2)		(6.7)
Net assets acquired	26.3		(0.9)		25.4

Goodwill	$	8.4	$	1.1	$	9.5

Included in the total purchase price is cash paid of $31.0 million and the settlement of $3.9 million of preexisting transactions. In connection with the acquisition, we paid cash totaling $30.8 million on the acquisition date of February 29, 2024 and $0.2 million in the second quarter of 2024. There were no adjustments to purchase price allocation in the third quarter of 2024.

The goodwill is not expected to be deductible for income tax purposes. The expected lives of the acquired intangible assets is 3 months and 10 years for backlog and customer lists, respectively, and are being amortized on a straight-line basis.