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Acquisitions | 9 Months Ended
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Sep. 30, 2022
Business Combinations [Abstract] |
Acquisitions | Note 3 – Acquisitions Alfmeier Präzision SE On July 29, 2022, the Company transferred consideration to acquire 100% of the equity interests of Alfmeier, a global leader in automotive lumbar and massage comfort solutions and a leading provider of advanced valve systems technology, integrated electronics and software. The acquisition further expands the Company's current value proposition beyond thermal in comfort, health, wellness, and energy efficiency and aligns with global consumer demand for expanded offerings in vehicle passenger comfort. The acquisition date for accounting purposes was determined to be August 1, 2022 and the total consideration was $164,887. On the closing date, the Company made cash payments of $188,941, net of cash acquired. We expect to receive cash from the seller of $24,054 (“Purchase Consideration Receivable”) in connection with the finalization and settlement of post-closing adjustments in accordance with the purchase agreement. Substantially all of the adjustments known as of this filing relate to lower cash on hand as of the closing date than estimated and a pre-closing reorganization transaction. We expect additional adjustments for actual working capital, cash and cash-like items and debt and debt-like items as of the closing date. All post-closing adjustments are expected to be finalized within 120 days of the closing date, provided there are no disputes. Potential disputes shall be resolved in accordance with the purchase agreement. The Purchase Consideration Receivable is recorded in Other current assets in the consolidated condensed balance sheets as of September 30, 2022. The results of Alfmeier's operations are reported within the Automotive segment from the acquisition date. The following table provides product revenues and operating income from Alfmeier that are included in our consolidated condensed financial statements:
|  | Three Months Ended September 30, 2022 |  |  | Nine Months Ended September 30, 2022 |
Product revenues |  | $ | 41,281 |  |  | $ | 41,281 |
Operating loss |  |  | (3,104 | ) |  |  | (3,104 | )
The acquisition was accounted for as a business combination with the purchase price allocated on a preliminary basis using information available as of September 30, 2022. Assets acquired and liabilities assumed were recorded at estimated fair values based on third-party valuations, management’s estimates, available information, and supportable assumptions that management considered reasonable. The purchase price and related allocation are preliminary and could be revised 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 final valuation of assets acquired and liabilities assumed may be materially different from the estimated values shown below. The following table summarizes the preliminary allocation of the purchase consideration to the estimated fair values of assets acquired and liabilities assumed as of the acquisition date:
Purchase price, cash consideration, net of cash acquired |  | $ | 188,941 |
Purchase price, Purchase Consideration Receivable |  | $ | (24,054 | )
Total purchase price, net of cash acquired |  | $ | 164,887 |
Accounts receivable |  |  | 24,988 |
Inventory |  |  | 36,026 |
Prepaid expenses and other assets |  |  | 20,920 |
Operating lease right-of-use assets |  |  | 4,608 |
Property and equipment |  |  | 89,942 |
Other intangible assets |  |  | 22,668 |
Goodwill |  |  | 43,678 |
Assumed liabilities |  |  | (55,994 | )
Deferred tax liabilities |  |  | (21,949 | )
Net assets acquired |  | $ | 164,887 |
The following table summarizes the preliminary allocation of the purchase consideration to the other intangible assets acquired:
|  | Preliminary Fair Value |  |  | Weighted Average Life (in years) |
Definite-lived: |  |  |  |  |  |
Customer related |  | $ | 11,233 |  |  |  | 13 |
Technology |  |  | 11,435 |  |  |  | 9 |
Total |  | $ | 22,668 |  |  |  |
The estimated fair value of the Intangible assets was based on third-party valuations and management’s estimates, generally utilizing income and market approaches. Goodwill recognized in this transaction is primarily attributable to the Company’s expected future economic benefits from combining operations to offer more compelling and high-value solutions across complementary customer relationships as well as expected future synergies. The goodwill is not expected to be deductible for tax purposes. The following unaudited pro forma information represents our product revenues as if the acquisition of Alfmeier had occurred as of January 1, 2021:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Product revenues |  | $ | 352,946 |  |  | $ | 300,520 |  |  | $ | 1,005,337 |  |  | $ | 992,403 |
Jiangmen Dacheng Medical Equipment Co. Ltd On July 13, 2022, the Company acquired 100% of the equity interests of Dacheng and its wholly owned subsidiary, IOB Medical, Inc. (“IOB”). Dacheng, a privately held manufacturer of medical materials and medical equipment, including patient temperature management solutions, for numerous local and international customers. The acquisition provides Gentherm Medical a local presence in China’s high-growth market for patient warming devices and other medical device products, while also expanding overall manufacturing capacity to include a low-cost manufacturing site. The total consideration was $35,048, which is comprised of cash payments, net of cash acquired. The purchase agreement also includes future cash payments of up to $3,000, contingent upon the achievement of certain performance metrics and continued employment of the former majority shareholder through a series of defined dates. These contingent payments will be accounted for as compensation expense and will be recorded as a component of selling, general and administrative. The results of Dacheng's operations are reported within the Medical segment from the date of acquisition. The following table provides product revenues and operating income from Dacheng that are included in our consolidated condensed financial statements:
|  | Three Months Ended September 30, 2022 |  |  | Nine Months Ended September 30, 2022 |
Product re venues |  | $ | 1,234 |  |  | $ | 1,234 |
Operating loss |  |  | (153 | ) |  |  | (153 | )
The acquisition was accounted for as a business combination with the purchase price allocated on a preliminary basis using information available as of September 30, 2022. Assets acquired and liabilities assumed were recorded at estimated fair values based on third-party valuations, management’s estimates, available information, and supportable assumptions that management considered reasonable. The purchase price and related allocation are preliminary and could be revised 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 final valuation of assets acquired and liabilities assumed may be materially different from the estimated values shown below. The following table summarizes the preliminary allocation of the purchase consideration to the estimated fair values of assets acquired and liabilities assumed as of the acquisition date:
Purchase price, cash consideration, net of cash acquired |  | $ | 35,048 |
Accounts receivable |  |  | 746 |
Inventory |  |  | 1,942 |
Prepaid expenses and other assets |  |  | 152 |
Operating lease right-of-use assets |  |  | 841 |
Property and equipment |  |  | 684 |
Other intangible assets |  |  | 19,094 |
Goodwill |  |  | 22,995 |
Assumed liabilities |  |  | (2,799 | )
Deferred tax liabilities |  |  | (8,607 | )
Net assets acquired |  | $ | 35,048 |
The following table summarizes the preliminary allocation of the purchase consideration to the other intangible assets acquired:
|  | Preliminary Fair Value |  |  | Weighted Average Life (in years) |
Definite-lived: |  |  |  |  |  |
Customer related |  | $ | 11,873 |  |  |  | 12 |
Technology |  |  | 4,749 |  |  |  | 12 |
Indefinite-lived: |  |  |  |  |  |
Tradenames |  |  | 2,472 |  |  |  | — |
Total |  | $ | 19,094 |  |  |  |
The estimated fair value of the intangible assets was based on third-party valuations and management’s estimates, generally utilizing income and market approaches. Goodwill recognized in this transaction is primarily attributable to the Company’s expected future economic benefits from the enhanced access to high-growth markets including private label opportunities through Dacheng’s innovative patient temperature management devices. The goodwill is not expected to be deductible for tax purposes. The pro forma effects of this acquisition would not materially impact the Company’s reported results for any period presented, and as a result no pro forma financial statements were presented.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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