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Goodwill Other Intangible Assets and Other Long Term Assets | 12 Months Ended
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Sep. 30, 2023
Goodwill Intangible Assets And Other Long Term Assets Disclosure [Abstract] |
Goodwill Other Intangible Assets and Other Long Term Assets | 9. GOODWILL, OTHER INTANGIBLE ASSETS, AND OTHER LONG-TERM ASSETS: In June 2023, we acquired C&C Boat Works, a full-service boat dealer in Crosslake, Minnesota. In January 2023, we acquired Boatzon, a boat and marine digital retail platform, through our recently formed technology entity, New Wave Innovations. In December 2022, we acquired Midcoast Marine Group, a leading full-service marine construction Company based on Central Florida's Gulf Coast. These acquisitions were purchased for an aggregate consideration of approximately $49.0 million (net of cash acquired of $0.1 million), including estimated contingent consideration of $9.7 million. Tangible assets acquired, net of liabilities assumed and cash acquired, totaled approximately $20.3 million; intangible assets acquired totaled $1.9 million; and total goodwill recognized was approximately $26.8 million. The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisitions. Approximately $13.6 million of goodwill related to these acquisitions is deductible for tax purposes. In October 2022, we purchased all of the outstanding equity of IGY Marinas for an aggregate purchase price of $480 million subject to certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks. In addition, the former equity owners of IGY Marinas (“IGY Sellers”) have the opportunity to earn additional consideration as part of a contingent consideration arrangement subject to the achievement of certain performance metrics. The maximum amount of consideration that can be paid under the contingent consideration arrangement is $100.0 million. The fair value of $67.7 million of the contingent consideration arrangement was estimated with the assistance of a third-party valuation expert by applying an income valuation approach and is included in other long-term liabilities. The earnout was estimated based on certain performance metrics as a base scenario (among other assumptions) subject to a Monte Carlo simulation. The IGY Sellers are subject to certain customary post-closing covenants and indemnities. The acquisition of IGY Marinas expands the Company’s marina footprint and superyacht services offerings and strengthens its position as the global leader in superyacht and luxury marina destinations in the Americas, the Caribbean, Europe, and Asia. The following table summarizes the consideration paid for IGY Marinas and the allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.
|  | (Amounts in thousands) |
Consideration: |  |  |
Cash purchase price and net working capital adjustments, net of cash acquired of $28,075 |  | $ | 482,997 |
Contingent consideration arrangement |  |  | 67,700 |
Noncontrolling interests in consolidated subsidiaries |  |  | 2,208 |
Fair value of total consideration transferred |  | $ | 552,905 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |
Net working capital, net of cash acquired of $28,075 |  |  | (22,880 | )
Property and equipment |  |  | 240,190 |
Operating lease right-of-use assets |  |  | 39,720 |
Intangible assets |  |  | 30,446 |
Equity method investments |  |  | 14,098 |
Other long-term assets |  |  | 6,973 |
Operating lease liabilities |  |  | (29,416 | )
Other liabilities |  |  | (1,301 | )
Deferred tax liabilities, net |  |  | (18,467 | )
Total identifiable net assets acquired: |  |  | 259,363 |
Goodwill |  | $ | 293,542 |
Total |  | $ | 552,905 |
The fair value of current assets acquired includes accounts receivable and other current assets of approximately $4.5 million and $4.1 million, respectively. The fair value of current liabilities assumed includes contract liabilities of approximately $13.3 million, tax contingency reserves of approximately $8.5 million and accrued expenses of approximately $6.4 million. We recorded approximately $293.5 million in goodwill and approximately $30.4 million of other identifiable intangibles, composed of indefinite-lived trade names and customer relationships, in connection with the IGY Marinas acquisition. The goodwill represents the assembled workforce, our enhanced geographic reach, and global brand infrastructure. Goodwill of approximately $193.3 million is expected to be deductible for tax purposes. As of the acquisition date, the customer relationships have a weighted average useful life of approximately 4.5 years and the trade name has an indefinite useful life. For the fiscal years ended 2022 and 2023, IGY Marinas revenue was approximately $96.8 and $112.4 million, respectively. For the fiscal year ended 2022, IGY Marinas loss before taxes was approximately $5.6 million. For the fiscal year ended 2023, IGY Marinas income before taxes was approximately $18.1 million. Income before taxes does not include parent level corporate costs. Through one of the subsidiaries that it acquired in the IGY Marinas acquisition, the Company has an investment in certain entities that own a marina asset in Cannes, France, which is accounted for under the equity method, as well as a series of notes receivable due from these entities, with a total notes receivable balance of approximately $6.3 million as of September 30, 2023. In August 2022, we expanded our presence in Texas by acquiring Endeavour Marina in Seabrook. In April 2022, through Northrop & Johnson, we acquired Superyacht Management, S.A.R.L., better known as SYM, a superyacht management company based in Golfe-Juan, France. In November 2021, we completed acquisitions for Intrepid Powerboats, a premier manufacturer of powerboats, and Texas MasterCraft, a watersports dealer in Northern Texas, for aggregate consideration of approximately $67.2 million (net of cash acquired of $9.4 million), including estimated contingent consideration of $6.0 million. Tangible assets acquired, net of liabilities assumed and cash acquired, totaled approximately $20.3 million; intangible assets acquired totaled $7.3 million; and total goodwill recognized was approximately $39.6 million. The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisitions. Approximately $10.7 million of goodwill related to the acquisitions, wholly attributable to Texas MasterCraft, is deductible for tax purposes. In July 2021, we purchased Nisswa Marine, Inc. a full-service dealer located in Nisswa, Minnesota. Goodwill and other intangible assets associated with the Nisswa Marine acquisition was approximately $15.3 million. In May 2021, we purchased all of the outstanding equity of KCS International Holdings, Inc., and certain affiliates (“Cruisers Yachts”) for an aggregate purchase price of $62.7 million, subject to certain customary closing and post-closing adjustments, and net working capital adjustments including certain holdbacks. The former owners of Cruisers Yachts are subject to certain customary post-closing covenants and indemnities. The following table summarizes the consideration paid for Cruisers Yachts and the allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.
|  | (Amounts in thousands) |
Consideration: |  |  |
Cash purchase price and net working capital adjustments, net of cash acquired of $5,993 |  | $ | 61,448 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |
Current assets, net of cash acquired of $5,993 |  | $ | 29,869 |
Property and equipment |  |  | 12,126 |
Intangible assets |  |  | 4,602 |
Current liabilities |  |  | (25,283 | )
Total identifiable net assets acquired: |  |  | 21,314 |
Goodwill |  | $ | 40,134 |
Total |  | $ | 61,448 |
The fair value of current assets acquired includes accounts receivable and inventory of approximately $3.1 million and $26.2 million, respectively. The fair value of current liabilities assumed includes short-term borrowings of approximately $11.7 million, accrued expenses of approximately $10.3 million, and accounts payable of approximately $3.0 million. The intangible assets acquired include the trade name and customer relationships. The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition. The majority of the goodwill is expected to be deductible for tax purposes. The customer relationships have a weighted average useful life of approximately 2.0 years. The trade name has an indefinite life. Our results for fiscal 2021 include results from Cruisers Yachts between May 2, 2021 and September 30, 2021. Refer to Note 21 for disclosure of the revenues and income from operations. We have not disclosed the pro forma effect of Cruisers Yachts’ financial information for fiscal 2020 and prior to acquisition on May 2, 2021, because Cruisers Yachts’ historical monthly internal accounting and reporting processes and practices would not provide complete information sufficient for the purposes of this pro forma disclosure. In total, goodwill and other intangible assets increased, primarily due to acquisitions, by $45.3 million and $353.1 million, for the fiscal years ended September 30, 2022 and 2023, respectively. These acquisitions have resulted in the recording of goodwill for tax purposes of $10.5 million and $216.0 million, for the fiscal years ended September 30, 2022 and 2023, respectively. Current and previous acquisitions have resulted in the recording of $235.6 million and $559.8 million in goodwill and $10.9 million and $39.7 million in other intangible assets as of September 30, 2022 and 2023, respectively. Effective May 2, 2021, our reportable segments changed as a result of the Company’s acquisition of Cruisers Yachts, which changed management’s reporting structure and operating activities. We now report our operations through two new reportable segments: Retail Operations and Product Manufacturing. As a result, the Company allocated goodwill to its reporting units within the Company’s two reportable segments. The following table sets forth the changes in carrying amount of goodwill by reportable segment for the fiscal years ended September 30, 2022 and 2023:
|  | Retail Operations |  |  | Product Manufacturing |  |  | Total |
|  | (Amounts in thousands) |
Balance as of September 30, 2021 |  | $ | 155,429 |  |  | $ | 40,134 |  |  | $ | 195,563 |
Goodwill acquired |  |  | 14,035 |  |  |  | 28,900 |  |  |  | 42,935 |
Foreign currency translation |  |  | (2,913 | ) |  |  | — |  |  |  | (2,913 | )
Balance as of September 30, 2022 |  | $ | 166,551 |  |  | $ | 69,034 |  |  | $ | 235,585 |
Goodwill acquired |  |  | 321,166 |  |  |  | — |  |  |  | 321,166 |
Foreign currency translation |  |  | 3,069 |  |  |  | — |  |  |  | 3,069 |
Balance as of September 30, 2023 |  | $ | 490,786 |  |  | $ | 69,034 |  |  | $ | 559,820 |
Other intangible assets, net, at September 30, consisted of the following:
|  | 2022 |  |  | 2023 |
|  | (Amounts in thousands) |
Trade names — indefinite-lived |  | $ | 7,736 |  |  | $ | 17,712 |
Other intangible assets, primarily customer relationships |  |  | 5,948 |  |  |  | 25,929 |
|  |  | 13,684 |  |  |  | 43,641 |
Less: accumulated amortization |  |  | (2,798 | ) |  |  | (3,928 | )
Intangible assets, net |  | $ | 10,886 |  |  | $ | 39,713 |
The following table sets forth the aggregate amortization expense for each of the five succeeding fiscal years:
|  | (Amounts in thousands) |
2024 |  | $ | 7,708 |
2025 |  |  | 7,261 |
2026 |  |  | 5,083 |
2027 |  |  | 3,698 |
2028 |  |  | 15 |
Total |  | $ | 23,765 |

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