On April 1, 2019 Gentherm acquired Stihler Electronic GmbH (“Stihler”), a leading developer and manufacturer of patient and blood temperature management systems, for a purchase price of $15,476, net of cash acquired and including $653 of contingent consideration to be paid upon achievement of a milestone that must be completed by September 2020. In addition, the purchase agreement includes a contingent payment of $653 to be paid if the selling shareholder remains employed by Stihler through December 2020. This amount will be recorded as a component of selling, general and administrative expenses ratably over the service period. The results of operations of Stihler are reported within the Company’s Industrial segment from the date of acquisition. During the three- and six-month periods ended June 30, 2019, the Company incurred acquisition-related costs of approximately $342 and $380, respectively. These amounts were recorded as incurred, within the Company's consolidated statements of income.

The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available in the second quarter of 2019. The preliminary purchase price and related allocation to the acquired net assets of Stihler, based on their estimated fair values, is shown below:


Purchase price, cash consideration, net of cash acquired	$	14,823
Purchase price, fair value of contingent consideration		653
Total purchase price, net of cash acquired		15,476

Accounts receivable	$	883
Inventory		1,698
Prepaid expenses and other assets		241
Operating lease right-of-use assets		263
Property and equipment		260
Other intangible assets		4,380
Goodwill		9,816
Assumed liabilities		(2,065	)


Net assets acquired	$	15,476

Other intangible assets primarily include amounts recognized for the fair value of customer-related intangible assets, which will be amortized over their estimated useful lives of approximately 9 years. The estimated fair value of these assets was based on third-party valuations and management’s estimates, generally utilizing an income approach. Goodwill recognized in this transaction is primarily attributable to intangible assets that do not qualify for separate recognition. It is estimated that $2,524 of the goodwill recognized will be deductible for income tax purposes.

The purchase price and related allocation are preliminary and could be revised for up to one year as a result of adjustments made to the purchase price, additional information obtained regarding liabilities assumed, including, but not limited to, contingent liabilities, revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals and valuations related to property, plant and equipment and intangible assets, and certain tax attributes.

The pro forma effect of the Stihler acquisition does not materially impact the Company’s reported results for any period presented, and as a result no pro forma financial statements are presented.