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Note 12 - Acquisition of AAT Carriers, Inc. | 3 Months Ended
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Mar. 31, 2022
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
Note 12. | Acquisition of AAT Carriers, Inc.
On February 9, 2022, we acquired 100% of the outstanding stock of AAT Carriers, Inc. ("AAT") headquartered in Chattanooga, TN. AAT specializes in highly regulated, time-sensitive loads for the U.S. government. The total cash consideration at closing was $38.8 million, not considering approximately $1.8 million of cash balances acquired. The Stock Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions. The Stock Purchase Agreement includes an earnout component of up to an aggregate of $20.0 million based on AAT's adjusted earnings before interest, taxes, depreciation, and amortization reported for the first and second years following closing. The total purchase price, including any earnout achieved, is expected to range from $35.0 million to $57.0 million depending on the results achieved by AAT. AAT’s results have been included in the condensed consolidated financial statements since the date of acquisition and are reported within our Expedited reportable operating segment. The allocation of the preliminary purchase price detailed below is subject to change based on finalization of the valuation of long-lived and intangible assets, as well as our ongoing evaluation of AAT’s accounting principles for consistency with ours.
|  | February 9, 2022 |
(in thousands) |  |  |  |
Cash paid pursuant to Stock Purchase Agreement |  | $ | 38,796 |
Cash acquired included in historical book value of AAT's assets and liabilities |  |  | (1,796 | )
Net cash paid |  | $ | 37,000 |
There are no deferred income taxes arising from the acquisition because of our 338(h)(10) election. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date.
|  | February 9, 2022 |
Cash and cash equivalents |  | $ | 1,796 |
Accounts receivable |  |  | 842 |
Prepaid expenses |  |  | 33 |
Other short-term assets |  |  | 69 |
Net property and equipment |  |  | 7,994 |
Total identifiable assets acquired |  |  | 10,734 |
Accounts payable |  |  | (19 | )
Accrued expenses |  |  | (946 | )
Finance lease obligations |  |  | (458 | )
Other long-term liabilities |  |  | (3 | )
Total liabilities assumed |  |  | (1,426 | )
Net identifiable assets acquired |  |  | 9,308 |
Goodwill |  |  | 29,488 |
Net assets acquired |  | $ | 38,796 |
Goodwill and other intangible assets will change upon the completion of the valuation of the contingent consideration liability and intangible asset as part of the purchase accounting for the AAT acquisition. The goodwill recognized is attributable primarily to expected cost synergies in the areas of fuel, purchases of revenue equipment, and recruiting. The amounts of revenue and earnings of AAT included in the Company’s consolidated results of operations from the acquisition date to the period ended March 31, 2022 are as follows:
(in thousands) |  | Three months ended |
|  | March 31, 2022 |
Total revenue |  | $ | 4,166 |
Net income |  | $ | 1,987 |

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- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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