XML 28 R11.htm IDEA: XBRL DOCUMENT
v3.22.4

Business Acquisitions and Investments | 12 Months Ended
--- | ---
Dec. 31, 2022
Business Acquisitions and Investments [Abstract] |
Business Acquisitions and Investments | 2. Business Acquisitions and Investments 2022 Increase in Equity Investment Investment in Foshan Che Yijia New Energy Technology Co., Ltd. In August 2019, we acquired an approximate 29% minority interest in Foshan Che Yijia New Energy Technology Co., Ltd. (“CYJ”) for approximately $5.1 million. CYJ is a manufacturer of automotive electric air conditioning compressors and is located in China. We determined, at that time, that due to a lack of a voting majority and other qualitative factors, we do not control the operations of CYJ and accordingly, our investment in CYJ would be accounted for under the equity method of accounting. In October 2022, we acquired an additional 3.55% equity interest in CYJ for RMB 1.7 million (approximately $242,000), increasing our minority ownership interest in CYJ from an approximate interest of 29% to 33%. The additional acquired ownership interest in CYJ was paid for in cash funded by borrowings under our Credit Agreement with JPMorgan Chase Bank, N.A., as agent. We will continue to account for our minority interest in CYJ using the equity method of accounting. 2022 Business Acquisitions Acquisition of Capital Stock of Kade Trading GmbH (“Kade”) In October 2022, we acquired 100% of the capital stock of Kade Trading GmbH (“Kade”) headquartered in Glinde, Germany for Euros 2.7 million (approximately $2.7 million), inclusive of closing balance sheet adjustments, plus a Euros 0.5 million (approximately $0.5 million) earn-out based upon Kade’s performance in 2024 and 2025. Kade is a supplier across Europe of mobile temperature control components to commercial vehicle, passenger car and specialty equipment markets and has been a distributor of CYJ products including electric compressors, hose assemblies and receiver dryers, with annual sales of approximately $6 million. The acquired Kade business, to be reported as part of our Temperature Control segment, was paid for with cash. The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values (in thousands):
Purchase price |  |  |  |  | $ | 3,176 |
Assets acquired and liabilities assumed: |  |  |  |  |  |  |
Receivables |  | $ | 790 |  |  |  |  |
Inventory |  |  | 829 |  |  |  |  |
Other current assets (1) |  |  | 1,003 |  |  |  |  |
Property, plant and equipment, net |  |  | 63 |  |  |  |  |
Operating lease right-of-use assets |  |  | 401 |  |  |  |  |
Intangible assets |  |  | 2,395 |  |  |  |  |
Goodwill |  |  | 766 |  |  |  |  |
Current liabilities |  |  | (1,977 | ) |  |  |  |
Noncurrent operating lease liabilities |  |  | (328 | ) |  |  |  |
Deferred income taxes |  |  | (766 | ) |  |  |  |
Net assets acquired |  |  |  |  |  | $ | 3,176 |
| (1) | The other current assets balance includes $1 million of cash acquired.
Intangible assets acquired of $2.4 million consist of customer relationships that will be amortized on a straight-line basis over the estimated useful life of 15 years. Incremental revenues from the acquired Kade business included in our consolidated statement of operations from the acquisition date through December 31, 2022 were $1.3 million. 2021 Business Acquisitions Acquisition of Capital Stock of Stabil Operative Group GmbH (“Stabil”) In September 2021, we acquired 100% of the capital stock of Stabil Operative Group GmbH, a German company (“Stabil”), for Euros 13.7 million, or $16.3 million. Stabil is a manufacturer and distributor of a variety of components, including electronic sensors, control units, and clamping devices to the European Original Equipment (“OE”) market, serving both commercial and light vehicle applications. The acquired Stabil business was paid for with cash funded by borrowings under our revolving credit facility with JPMorgan Chase Bank, N.A., as agent, and is headquartered on the outskirts of Stuttgart, Germany with facilities in Germany and Hungary. The acquisition, reported as part of our Engine Management Segment, aligns with our strategy of expansion beyond our core aftermarket business into complementary areas, and gives us exposure to a diversified group of blue chip European commercial and light vehicle OE customers. The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values (in thousands):
Purchase price |  |  |  |  | $ | 16,290 |
Assets acquired and liabilities assumed: |  |  |  |  |  |  |
Receivables |  | $ | 2,852 |  |  |  |  |
Inventory |  |  | 5,126 |  |  |  |  |
Other current assets (1) |  |  | 1,628 |  |  |  |  |
Property, plant and equipment, net |  |  | 1,810 |  |  |  |  |
Operating lease right-of-use assets |  |  | 4,971 |  |  |  |  |
Intangible assets |  |  | 5,471 |  |  |  |  |
Goodwill |  |  | 4,827 |  |  |  |  |
Current liabilities |  |  | (4,190 | ) |  |  |  |
Noncurrent operating lease liabilities |  |  | (4,454 | ) |  |  |  |
Deferred income taxes |  |  | (1,751 | ) |  |  |  |
Net assets acquired |  |  |  |  |  | $ | 16,290 |
| (1) | The other current assets balance includes $0.9 million of cash acquired.
Intangible assets acquired of $5.5 million consist of customer relationships that will be amortized on a straight-line basis over the estimated useful life of 20 years. Goodwill of $4.8 million was allocated to the Engine Management Segment. The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce associated with personal reputations. The intangible assets and goodwill are not deductible for tax purposes. Incremental revenues from the acquired Stabil business included in our consolidated statement of operations for the year ended December 31, 2022 were $14.9 million. Acquisition of Capital Stock of Trumpet Holdings, Inc. (“Trombetta”) In May 2021, we acquired 100% of the capital stock of Trumpet Holdings, Inc., a Delaware corporation, (more commonly known as “Trombetta”), for $111.7 million. Trombetta is a leading provider of power switching and power management products to Original Equipment (“OE”) customers in various markets. The acquired Trombetta business was paid for in cash funded by borrowings under our revolving credit facility with JPMorgan Chase Bank, N.A., as agent, and has manufacturing facilities in Milwaukee, Wisconsin, Sheboygan Falls, Wisconsin, Tijuana, Mexico, as well as a 70% ownership in a joint venture in Hong Kong, with operations in Shanghai and Wuxi, China (“Trombetta Asia, Ltd.”). The acquisition, to be reported as part of our Engine Management Segment, aligns with our strategy of expansion into non-aftermarket parts. The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values, (in thousands):
Purchase price |  |  |  |  | $ | 111,711 |
Assets acquired and liabilities assumed: |  |  |  |  |  |  |
Receivables |  | $ | 9,173 |  |  |  |  |
Inventory |  |  | 12,460 |  |  |  |  |
Other current assets (1) |  |  | 5,193 |  |  |  |  |
Property, plant and equipment, net |  |  | 4,939 |  |  |  |  |
Operating lease right-of-use assets |  |  | 3,847 |  |  |  |  |
Intangible assets |  |  | 54,700 |  |  |  |  |
Goodwill |  |  | 49,250 |  |  |  |  |
Current liabilities |  |  | (5,072 | ) |  |  |  |
Noncurrent operating lease liabilities |  |  | (3,065 | ) |  |  |  |
Deferred income taxes |  |  | (8,210 | ) |  |  |  |
Subtotal |  |  |  |  |  |  | 123,215 |
Fair value of acquired noncontrolling interest |  |  |  |  |  |  | (11,504 | )
Net assets acquired |  |  |  |  |  | $ | 111,711 |
| (1) | The other current assets balance includes $4.6 million of cash acquired.
Intangible assets acquired of $54.7 million consist of customer relationships of $39.4 million that will be amortized on a straight-line basis over the estimated useful life of 20 years; developed technology of $13.4 million that will be amortized on a straight-line basis over the estimated useful life of 15 years; and a trade name of $1.9 million that will be amortized on a straight-line basis over the estimated useful life of 10 years. Goodwill of $49.3 million was allocated to the Engine Management Segment. The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce associated with personal reputations. The intangible assets and goodwill are not deductible for tax purposes. Incremental revenues from the acquired Trombetta business included in our consolidated statement of operations for the year ended December 31, 2022 were $27.4 million. Acquisition of Particulate Matter Sensor Business of Stoneridge, Inc. (“Soot Sensor”) In March 2021 and November 2021, we agreed to acquire certain Soot Sensor product lines from Stoneridge, Inc for $2.9 million. The acquired product lines were paid for with cash funded by borrowings under our revolving credit facility with JPMorgan Chase Bank, N.A. The assets acquired include inventory, machinery, and equipment and certain intangible assets. The product lines acquired are used to manufacture sensors used in the exhaust and emission systems of diesel engines. The product lines acquired were located in Stoneridge’s facilities in Lexington, Ohio and Tallinn, Estonia. We did not acquire these facilities, nor any of Stoneridge’s employees, and have substantially completed the relocation of the acquired inventory, machinery and equipment related to the production lines to our engine management plants in Independence, Kansas and Bialystok, Poland, respectively. The acquisition, reported as part of our Engine Management Segment, aligns with our strategy of expansion into the OE heavy duty market. Customer relationships to be acquired include Volvo, CNHi and Hino. The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values (in thousands):
Purchase Price |  |  |  |  | $ | 2,924 |
Assets acquired and liabilities assumed: |  |  |  |  |  |  |
Inventory |  | $ | 1,032 |  |  |  |  |
Machinery and equipment, net |  |  | 1,137 |  |  |  |  |
Intangible assets |  |  | 755 |  |  |  |  |
Net assets acquired |  |  |  |  |  | $ | 2,924 |
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. Incremental revenues from the acquired Soot Sensor business included in our consolidated statement of operations for the year ended December 31, 2022 were $2.3 million.

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration