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ACQUISITION | 9 Months Ended
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Oct. 01, 2022
ACQUISITION |
ACQUISITION | 3. ACQUISITION Trojan Leisure Products, LLC d/b/a Radiant Pools On November 24, 2021, Latham Pool Products acquired Trojan Leisure Products, LLC d/b/a Radiant Pools (“Radiant”) for a total purchase price of $90.7 million (the “Radiant Acquisition”). The results of Radiant’s operations have been included in the consolidated financial statements since that date. Radiant specializes in manufacturing proprietary vinyl liner aluminum swimming pools which can be built completely in-ground, semi-inground, or above ground. As a result, this acquisition expanded the Company’s product offerings. In connection with the Radiant Acquisition, consideration paid was $90.7 million in cash, or $90.5 million net of cash acquired of $0.2 million. The cash consideration was funded, in part, through long-term debt proceeds of $50.0 million. The Company incurred $2.9 million in transaction costs. Subsequent to the acquisition date, there was an additional amount due to the seller of $0.4 million related to the finalization of the net working capital adjustment, which was accounted for as a measurement period adjustment. The measurement period adjustment resulted in an increase in the total consideration transferred of $0.4 million and an increase to goodwill of $0.4 million. The net working capital adjustment was paid during the fiscal quarter ended July 2, 2022. The Company accounted for the Radiant Acquisition using the acquisition method of accounting in accordance with ASC 805. This requires that the assets acquired and liabilities assumed be measured at fair value. The Company estimated, using Level 3 inputs, the fair value of certain fixed assets using a combination of the cost approach and the market approach. Inventories were valued using the comparative sales method, less the cost of disposal. Specific to intangible assets, customer relationships and backlog were valued using the multi-period excess earnings method, whereas trade names, technology and pool designs were valued using the relief from royalty method. The Company recorded the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. The following summarizes the purchase price allocation for the Radiant Acquisition: ​
​ | ​ | ​ | ​
(in thousands) |  | November 24, 2021
Total consideration | ​ | $ | 91,109
Allocation of purchase price: | ​ |  |
Cash | ​ |  | 217
Trade receivables | ​ |  | 2,805
Inventories | ​ |  | 5,528
Prepaid expenses and other current assets | ​ |  | 396
Property and equipment | ​ |  | 1,263
Intangible assets | ​ |  | 72,500
Total assets acquired | ​ |  | 82,709
Accounts payable | ​ |  | 1,744
Accrued expenses and other current liabilities | ​ |  | 1,038
Other long-term liabilities | ​ |  | 2,920
Total liabilities assumed | ​ |  | 5,702
Total fair value of net assets acquired, excluding goodwill: | ​ |  | 77,007
Goodwill | ​ | $ | 14,102
​ The excess of the purchase price over the fair value of the identifiable assets acquired and the liabilities assumed in the Radiant Acquisition was allocated to goodwill in the amount of $14.1 million. Goodwill resulting from the Radiant Acquisition was attributable to the expanded market share and product offerings. Goodwill resulting from the Radiant Acquisition is deductible for tax purposes. ​ The Company allocated a portion of the purchase price to specific intangible asset categories as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value | ​ | Amortization
Definite-lived intangible assets: |  | (in thousands) |  | Period
Dealer relationships | ​ | $ | 37,000 |  | 13 years
Trade names | ​ |  | 13,000 |  | 25 years
Technology | ​ | ​ | 13,000 | ​ | 15 years
Pool designs | ​ | ​ | 7,900 | ​ | 15 years
Backlog | ​ | ​ | 1,600 | ​ | 10 months
​ | ​ | $ | 72,500 | ​ | ​
​

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