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Business Combinations
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, 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 acquired Nissens Automotive business is a reportable operating segment.
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 $0.5 million and $8 million recorded as selling, general and administrative costs within the statement of operations during the years ended December 31, 2025 and 2024, respectively.
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 consists of cash only.
(b) Goodwill is deductible for tax purposes
(c) Intangible assets comprise of capitalized computer software of $2.2 million and the following (in thousands):
Gross Carrying AmountWeighted-Average Useful Life (in Years)
Customer relationships$150,400 16
Trade names - Nissens and AVA75,600 Indefinite
Trade names - Highway1,100 15
$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.