Business Acquisitions and Investments

3 Months Ended

Mar. 31, 2021

Business Acquisitions and Investments [Abstract]

Note 3. Business Acquisitions and Investments

2021 Business Acquisition

Acquisition of Particulate Matter Sensor Business of Stoneridge, Inc.

In March 2021, we agreed to acquire the soot sensor product lines from Stoneridge, Inc. The product lines to be acquired manufacture sensors used in the exhaust and emission systems of diesel engines. The product lines are located in Stoneridge’s facilities in Lexington, Ohio and Tallin, Estonia. We are not acquiring these facilities, nor any of Stoneridge’s employees, and will be relocating the production lines to our engine management plants in Independence, Kansas and Bialystok, Poland, respectively. The acquisition, to be reported as part of our Engine Management Segment, provides us with advanced emissions control technology used in commercial vehicles and is an excellent fit for our strategy of expansion into the OE heavy duty market. Customer relationships to be acquired include Volvo, CNHi and Hino.

The product lines located in Stoneridge’s facility in Lexington, Ohio were acquired in March 2021 for $2.1 million. The assets acquired include inventory, machinery & equipment and certain intangible assets. The product lines at Stoneridge’s Tallin, Estonia facility will be acquired at a future date for approximately $800,000. Tallin, Estonia assets to be acquired consist solely of machinery & equipment. Anticipated annual revenues from the acquired business approximates $12 million - $14 million.

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed through March 31, 2021, based on their fair values (in thousands):

Purchase Price			$	2,138
Assets acquired and liabilities assumed:
Inventory	$	1,032
Machinery and equipment, net		351
Intangible assets		755
Net assets acquired			$	2,138

Intangible assets acquired of approximately $0.8 million consist of customer relationships that will be amortized on a straight-line basis over the estimated useful life of 10 years.

Revenues from the acquired business included in our consolidated statement of operation from the acquisition date through March 31, 2021 were $0.8 million.