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Business Combinations
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Business Combinations Business Combinations
Acquisition of Nissens Automotive
On November 1, 2024, we acquired all the issued and outstanding shares of European automotive aftermarket parts supplier, AX V Nissens III ApS (now known as SMP Nissens III ApS) and its direct and indirect subsidiaries (“Nissens Automotive”) for €366.8 million (approximately $397.1 million), the purchase price consideration, from Nordic private equity firm, Axcel V K/S, and the Nissen family. The acquired Nissens Automotive business was paid for with cash funded by borrowing from our revolving credit facility and term loans, under the 2024 Credit Agreement. The acquisition of Nissens Automotive, a leading European supplier of thermal management and engine efficiency products for the automotive aftermarket, aligns with our strategy to become an aftermarket leader in North America and Europe across our key product categories. Through this acquisition, we will take advantage of collaboration for growth through cross-selling
opportunities as well as bi-directional synergies with significant savings potential. The Nissens Automotive operating segment was created in the fourth quarter as a result of the acquisition.
As of February 27, 2025, the purchase price allocation is considered preliminary and was based upon a preliminary valuation. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of identifiable intangible assets acquired.
We determined the fair value of acquired intangible assets using the multi-period excess earnings method and the relief-from-royalty method under the income approach for customer relationships and trade names, respectively. These methods generally forecast expected future net cash flows discretely associated with each of the identified intangible assets and adjust the forecasts to present value by applying a discount rate intended to reflect risk factors associated with the cash flows and the time value of money.
In addition to the consideration transferred to complete the transaction, we incurred closing and other acquisition related costs of $8 million recorded as selling, general and administrative costs within the statement of operations during the year ended December 31, 2024.
The following table summarizes the allocation of the acquisition purchase consideration to the identifiable assets acquired and liabilities assumed based on their fair values (in thousands):

Total purchase consideration(a)
$397,111 
Cash and cash equivalents24,620 
Accounts receivable48,460 
Inventories88,337 
Unreturned customer inventories1,820 
Prepaid expenses and other current assets1,033 
Property, plant and equipment29,048 
Operating lease right-of-use assets8,625 
Customer relationships intangibles(c)
150,400 
Other intangibles(c)
78,871 
Other assets407 
Total assets acquired431,621 
Current portion of term loan and other debt1,749 
Accounts payable34,568 
Sundry payables and accrued expenses19,836 
Accrued customer returns3,360 
Accrued rebates24,732 
Payroll and commissions3,294 
Long-term debt14,423 
Noncurrent operating lease liabilities5,501 
Other accrued liabilities1,371 
Deferred tax liabilities37,870 
Total liabilities assumed146,704 
Net assets acquired284,917 
Goodwill(b)
$112,194 
(a) Total purchase consideration is the cash paid of $397.1 million for the acquisition.
(b) Goodwill is deductible for tax purposes
(c) Intangible assets comprise of capitalized computer software of $2.2 million and the following preliminary valuation of identifiable intangible assets (in thousands):
Gross Carrying AmountWeighted-Average Useful Life (in Years)
Customer relationships$150,400 16
Trade names - Nissens & AVA75,600 Indefinite
Trade names - Highway1,100 15
Other intangibles$227,100 

Unaudited Supplemental Pro Forma Financial Information

The following unaudited supplemental pro forma information presents the combined results of operations for the years ended December 31, 2024 and 2023, respectively, as if the Nissens Automotive acquisition was completed on January 1, 2023. The pro forma financial information presented below is for illustrative purposes and is not indicative of the operating results that would have been realized if the acquisition had been completed on January 1, 2023, nor is it indicative of future operating results (in thousands):

Year Ended December 31,
20242023
Net sales$1,704,858 $1,615,110 
Net earnings attributable to SMP39,907 18,870 

The unaudited supplemental pro forma financial information includes adjustments for (i) amortization and depreciation totaling $3.4 million and $4.1 million for the years ended December 31, 2024 and 2023, respectively, that would have been recognized for the acquired intangible assets and the fair value adjustment of property, plant and equipment; (ii) amortization expense for deferred financing costs of $14.5 million and $18.2 million for the years ended December 31, 2024 and 2023, respectively and (iii) the estimated income tax benefit on the unaudited pro forma financial adjustments.

The unaudited supplemental pro forma financial information assumes that the following were incurred during the year ended December 31, 2023: (i) $9.4 million for amortization of the inventory fair-value adjustment, (ii) $1.6 million for acquisition related transaction costs, (iii) $1.8 million for employee retention bonus expense and (iv) the related estimated income tax benefits. The pro forma financial information does not reflect any expected revenue or cost synergies.

Increase in Equity Investment - Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. (2023)
In July 2023, we acquired an additional 15% equity interest in our 65% owned joint venture, Foshan GWO YNG SMP Vehicle Climate Control & Cooling Products Co. Ltd. (“Gwo Yng”), for Chinese renminbi ("RMB") 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  
Inventories5,945  
Other current assets 528  
Property, plant and equipment2,924  
Operating lease right-of-use assets4,372  
Intangible assets(b) 532  
Goodwill 2,208  
Long term investments and other assets7,257  
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 that will be amortized on a straight-line basis over the estimated useful life of 10 years and capitalized software of $0.1 million.
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.