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Business Acquisitions and Investments | 3 Months Ended
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Mar. 31, 2024
Business Acquisitions and Investments [Abstract] |
Business Acquisitions and Investments | Note 3. Business Acquisitions and Investments 2023 Increase in Equity Investment Investment in Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. In April 2014, we formed Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. (“Gwo Yng”), a 50/50 joint venture with Gwo Yng Enterprise Co., Ltd., a China-based manufacturer of air conditioner accumulators, filter driers, hose assemblies and switches. We acquired our 50% interest in the joint venture for approximately $14 million. In March 2018, we acquired an additional 15% equity interest in the joint venture for Chinese yuan renminbi 26,475,583 (approximately $4.2 million), thereby increasing our equity interest in the joint venture to 65%. While we increased our equity interest in the joint venture to 65%, the minority shareholder maintained substantive participating rights that allowed it to participate in certain significant financial and operating decisions that occur in the ordinary course of business. As a result, we continued to account for our investment in the joint venture under the equity method of accounting. In July 2023, we acquired an additional 15% equity interest in the joint venture for Chinese yuan renminbi 27,378,290 (approximately $4 million), thereby increasing our equity interest in Gwo Yng to 80%. In connection with the transaction, we amended and restated the charter documents of Gwo Yng to remove all minority shareholder substantive participating rights, giving SMP control of Gwo Yng. As a result, as of the closing date of the transaction, Gwo Yng was accounted for as a business combination achieved in stages (“a step acquisition”). Accordingly, commencing on the closing of the transaction, we reported the results of Gwo Yng on a consolidated basis with the minority ownership interest reported as a noncontrolling interest. The following table summarizes the allocation of the total step acquisition purchase consideration to the identifiable assets acquired and liabilities assumed based on their fair values (in thousands):
Total purchase consideration (a) |  |  |  |  | $ | 21,725 |
Assets acquired and liabilities assumed: |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 6,779 |  |  |  |  |
Receivables |  |  | 5,912 |  |  |  |  |
Inventory |  |  | 5,945 |  |  |  |  |
Other current assets |  |  | 528 |  |  |  |  |
Property, plant and equipment, net |  |  | 2,924 |  |  |  |  |
Operating lease right-of-use assets |  |  | 4,372 |  |  |  |  |
Intangible assets (b) |  |  | 532 |  |  |  |  |
Goodwill |  |  | 2,208 |  |  |  |  |
Long term investments and other assets |  |  | 7,257 |  |  |  |  |
Current liabilities |  |  | (6,004 | ) |  |  |  |
Noncurrent operating lease liabilities |  |  | (3,455 | ) |  |  |  |
Subtotal |  |  |  |  |  |  | 26,998 |
Fair value of acquired noncontrolling interest |  |  |  |  |  |  | (5,273 | )
Total purchase consideration allocated to net assets acquired |  |  |  |  |  | $ | 21,725 |
| (a) | Total purchase consideration is the sum of the fair value of the previously held equity investment interest in Gwo Yng of $17.7 million and the cash paid of $4 million for the acquisition of the additional 15% equity ownership interest.
| (b) | Intangible assets consists of customer relationships of $0.4 million and capitalized software of $0.1 million.
Intangible assets of $0.4 million consisting of customer relationships is amortized on a straight-line basis over the estimated useful life of 10 years. Goodwill of $2.2 million was allocated to the Temperature Control and Engineered Solutions segments in the amounts of $1.2 million and $1 million, respectively. The goodwill reflects relationships, business specific knowledge and the replacement cost of an assembled workforce associated with personal reputations. Incremental revenues from Gwo Yng included in our consolidated statement of operations for the three months ended March 31, 2024 were not material.

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