XML 30 R13.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Note 3 - Acquisition | 12 Months Ended
--- | ---
Dec. 31, 2024
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | 3. Acquisition ​ Acquisition of Douglas Stewart Software & Services, LLC ​ On July 31, 2024, Climb Global Solutions DSS, LLC, a wholly-owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) and purchased the entire share capital of Douglas Stewart Software & Services, LLC (“DSS”), a Florida limited liability company, for an aggregate purchase price of approximately $20.3 million (subject to certain adjustments) plus a potential post-closing earnout payment. DSS distributes software to VARs and campus stores across North America in both the K-12 and higher education markets, furthering the Company's reach into these markets. The Purchase Agreement contains customary representations, warranties, covenants and indemnities. The acquisition was funded utilizing cash from the Company’s balance sheet. The financial position and operating results of DSS is included in the Company’s consolidated financial statements from the date of the acquisition. The Company recorded net revenue for DSS of approximately $11.8 million and net income of approximately $0.8 million during the year ended December 31, 2024. ​ The impact of the acquisition’s preliminary purchase price allocations on the Company’s consolidated balance sheet and the acquisition date fair value of the total consideration transferred is depicted in the table below. Due to the timing of the closing of the transaction in the third quarter of 2024, the Company has not yet completed its evaluation and determination of certain assets acquired and liabilities assumed, primarily the final valuation of goodwill and intangible assets; therefore, the final fair value of the assets acquired and liabilities assumed, which will be completed within the measurement period of up to one year from the acquisition date, may vary from the Company’s preliminary estimates.
(in thousands) |  | ​ |
Prepaid expenses and other current assets |  | $ | 773 |
Inventory |  |  | 18 |
Right-of-use asset |  |  | 291 |
Other assets |  |  | 8 |
Accounts payable and accrued expenses |  |  | (636 | )
Lease liability, current portion |  |  | (88 | )
Lease liability, non-current portion |  |  | (249 | )
Intangibles - Vendor Relationships |  |  | 13,627 |
Goodwill |  |  | 8,401 |
Net assets |  | $ | 22,145 |
(in thousands) |  | ​ |
Supplementary information: |  | ​ |
Cash paid to sellers |  | $ | 20,420 |
Contingent earn-out |  |  | 1,725 |
Total purchase consideration |  | $ | 22,145 |
​ |  | ​ |
Intangible assets are comprised of approximately $13.6 million of vendor relationships with a weighted average amortization period of 11 years, representing the expected period of benefits. Goodwill, which was allocated to the Distribution segment, is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce. The DSS transaction was structured as an asset acquisition and as such the goodwill resulting from the transaction will be deductible for income tax purposes. ​ The Company used the income approach to value the intangible assets, representing acquired vendor relationships. The fair value measurements were primarily based on significant inputs that are not observable, which are categorized as a Level 3 measurement in the fair value hierarchy (See Note 14 – Fair Value Measurements). Inputs used to value these intangible assets include the discount rate, projection of all future cash flows, long-term growth rates in revenue and earnings before interest, tax, depreciation and amortization, vendor attrition rates and applicable income tax rates. The excess purchase price recorded to goodwill primarily represents the future economic benefits the Company expects to achieve as a result of combining operations and expanding vendor relationships. ​ The purchase consideration includes approximately $1.7 million fair value for potential earn-out consideration if certain targets are achieved by September 30, 2025, payable in cash. As of December 31, 2024, the Company reassessed the earn-out liability and increased the fair value of the earn out liability to approximately $1.9 million, with $0.1 million adjustment recognized within change in fair value of acquisition contingent consideration during the year ended December 31, 2024. The fair value earn-out measurement was primarily based on inputs that are not observable, which are categorized as a Level 3 measurement in the fair value hierarchy (See Note 14 – Fair Value Measurements), reflecting its assessment of the assumptions market participants would use to value these liabilities. The undiscounted payment of the earn-out can range from zero up to approximately $4.2 million and achievement is based on the post-acquisition results of DSS. Acquisition of Data Solutions Holdings Limited ​ On October 6, 2023, the Company entered into a Share Purchase Agreement and purchased the entire share capital of Data Solutions Holdings Limited (“Data Solutions”) for an aggregate purchase price of approximately €15.0 million (equivalent to $15.9 million USD), subject to certain working capital and other adjustments, paid at closing plus a potential post-closing earn-out. The allocation of the purchase price was based on the estimated fair value of Data Solutions’ net tangible and identifiable intangible assets as of the date of the acquisition. The transaction was accounted for under the purchase method of accounting. The purchase consideration included approximately $2.2 million fair value for potential earn-out consideration if certain targets are achieved, payable in cash. During the year December 31, 2024, the Company reassessed the earn-out liability and increased the fair value of the earn out liability to approximately $3.4 million, with $1.2 million adjustment recognized within change in fair value of acquisition contingent consideration during the year ended December 31, 2024. The earn-out was paid in cash during the year ended December 31, 2024 and no liability remains as of December 31, 2024. The earn-out liability was included in current liabilities as of December 31, 2023. The Company also paid approximately $0.5 million for amounts that had been held back at the closing date of the transaction, which were included in payments for acquisitions, net of cash acquired within the cash flow statement for the year ended December 31, 2024. In connection with the acquisition of Data Solutions on October 6, 2023, the Company acquired an invoice discounting facility (“IDF”) that was with recourse to the Company (See Note 11 – Credit Facilities). The balance outstanding under the IDF at December 31, 2024 was zero, as the Company terminated the IDF during the period, compared to $4.3 million at December 31, 2023, which is included in accounts payable and accrued expenses on the Consolidated Balance Sheets. During the years ended December 31, 2024 and 2023, the Company recognized acquisition related costs of $2.3 million and $0.6 million, respectively. These acquisition related costs are reflected in the accompanying consolidated statements of earnings. The costs incurred during the year ended December 31, 2024 related to our continued acquisition initiatives including the aforementioned DSS acquisition, while the costs incurred during the prior period ended December 31, 2023 related to the Data Solutions acquisition. Pro Forma Results (unaudited) The following unaudited pro forma financial information summarizes the results of operations for the years ended December 31, 2024 and 2023 as if the acquisition of DSS and Data Solutions has been completed as of the beginning of the years ended December 31, 2024 and 2023, respectively. The pro forma results are based upon certain assumptions and estimates, and they give effect to actual operating results prior to the acquisitions and adjustments to reflect income taxes at a rate consistent with the tax rates of the local jurisdictions. As a result, these pro forma results do not necessarily represent results that would have occurred if the acquisitions had taken place on the basis assumed above, nor are they indicative of the results of future combined periods.
|  | Year ended |
|  | December 31, |
|  | 2024 |  |  | 2023 |
Net sales |  | $ | 480,420 |  |  | $ | 392,184 |
Net income |  | $ | 20,735 |  |  | $ | 17,195 |
​

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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + 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_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration