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Business Acquisitions (Tables)

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions, by Acquisition

Under the acquisition method of accounting, the estimated consideration exchanged was calculated as follows:

(in thousands, except share data)						April 1, 2022
Number of DSG common shares exchanged						9,120,167
DSG closing price per common stock on March 31, 2022						$	38.54
Fair value of shares exchanged						$	351,491
Other consideration(1)						1,910
Total consideration exchanged						$	353,401

(1)Fair value adjustment of stock-based compensation awards.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The preliminary allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed as of the Merger Date is summarized as follows:

(in thousands)						Total
Current assets						$	148,308
Property, plant and equipment						57,053
Right of use assets						17,571
Other intangible assets						119,060
Deferred tax liability, net of deferred tax asset						(26,237)
Other assets						18,373
Current liabilities						(71,097)
Long-term obligations						(25,722)
Lease and financing obligations						(29,474)
Derivative earnout liability						(43,900)
Goodwill						189,466
Total consideration exchanged						$	353,401

The purchase consideration for each business acquired and the preliminary allocation of the consideration exchanged to the estimated fair values of assets acquired and liabilities assumed is summarized below:

(in thousands)						Interworld Highway LLC						Resolux						Frontier						National Test Equipment
Acquisition date						April 29, 2022						January 3, 2022						March 31, 2022						June 1, 2022						Total
Current assets						$	15,018					$	8,551					$	3,299					$	2,186					$	29,054
Property, plant and equipment						313						459						1,065						642						2,479
Right of use assets						—						1,125						9,218						—						10,343
Other intangible assets:
Customer relationships						6,369						11,400						10,000						1,830						29,599
Trade names						4,600						6,100						3,300						—						14,000
Other assets						10						1,745						—						—						1,755
Accounts payable						(8,856)						(3,058)						(1,359)						(2,268)						(15,541)
Accrued expenses and other liabilities						—						(939)						(1,067)						(1,169)						(3,175)
Lease obligation						—						(1,125)						(9,218)						—						(10,343)
Goodwill						37,236						6,498						10,439						5,971						60,144
Total purchase consideration exchanged, net of cash acquired						$	54,690					$	30,756					$	25,677					$	7,192					$	118,315

The purchase consideration for each business acquired during 2021 and the preliminary allocation of the consideration exchanged to the estimated fair values of assets acquired and liabilities assumed is summarized below:

(in thousands)						Omni						NEF(1)						SIS						MCS
Acquisition date						June 8, 2021						November 1, 2021						December 31, 2021						July 31, 2021						Total
Current assets						$	2,259					$	17,882					$	3,541					$	6,521					$	30,203
Property, plant and equipment						600						589						125						—						1,314
Right of use assets						—						1,774						799						—						2,573
Other intangible assets:
Customer relationships						2,530						5,007						4,800						2,621						14,958
Trade names						200						2,503						1,500						41						4,244
Other intangible assets						9						—						380						—						389
Other assets						—						1,236						10						—						1,246
Accounts payable						(50)						(3,506)						(1,464)						(2,523)						(7,543)
Accrued expenses and other liabilities						—						(3,332)						—						(685)						(4,017)
Lease obligation						—						(1,774)						(799)												(2,573)
Goodwill						953						—						3,010						7,245						11,208
Gain on bargain purchase						—						(1,363)						—						—						(1,363)
Total purchase consideration exchanged, net of cash acquired						$	6,501					$	19,016					$	11,902					$	13,220					$	50,639

(1)The consideration exchanged in the NEF acquisition included a shared-based payment valued at $2.8 million with the remainder of the payment in cash.

Acquisition Pro Forma Information

The following table presents estimated unaudited pro forma consolidated financial information for DSG as if the Mergers and other acquisitions disclosed below occurred on January 1, 2021 for the 2022 acquisitions and January 1, 2020 for the 2021 acquisitions. The unaudited pro forma information reflects adjustments including amortization on acquired intangible assets, interest expense, and the related tax effects. This information is presented for informational purposes only and is not necessarily indicative of future results or the results that would have occurred had the Mergers been completed on the date indicated.

			Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)			2022						2021						2022						2021
Revenue			$	471,280					$	299,854					$	647,030					$	454,895
Net income			6,056						8,081						4,560						14,431

The following table presents actual results attributable to our business combinations that were included in the unaudited condensed consolidated financial statements for the second quarter and first six months of 2022 and 2021. The results of DSG's legacy Lawson business are included only subsequent to the April 1, 2022 Merger Date, and the results for other acquisitions are only included subsequent to their respective acquisition dates provided above.

(in thousands)			Three Months Ended June 30, 2022																		Three Months Ended June 30, 2021
			Lawson						Other Acquisitions						Total						Lawson						Other Acquisitions						Total
Revenue			$	123,670					$	52,739					$	176,409					$	—					$	468					$	468
Net Income			$	3,084					$	5,316					$	8,400					$	—					$	(335)					$	(335)
			Six Months Ended June 30, 2022																		Six Months Ended June 30, 2021
			Lawson						Other Acquisitions						Total						Lawson						Other Acquisitions						Total
Revenue			$	123,670					$	75,522					$	199,192					$	—					$	468					$	468
Net Income			$	3,084					$	8,285					$	11,369					$	—					$	(335)					$	(335)

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

The preliminary allocation of consideration exchanged to other intangible assets acquired is as follows:

(in thousands)						Fair Value						Estimated Life (in years)
Customer relationships						$	76,050					19
Trade names						43,010						8
Total other intangible assets						$	119,060

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- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

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Tabular disclosure of finite-lived and indefinite-lived intangible assets acquired as part of a business combination.

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Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts.

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Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree.

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