Asset Acquisition

12 Months Ended

Dec. 31, 2020

On October 30, 2020, the Company acquired certain assets including land, building and improvements, manufacturing equipment, and assembled workforce from one of its former co-manufacturers (the “Seller”). The Company did not assume any liabilities of the Seller. The Company is using this manufacturing facility primarily for the production of its finished goods. Acquisition of these assets is expected to allow the Company to reduce manufacturing and packaging costs through vertical integration and provide opportunities for the Company to test new processes and scale new products more quickly.

The total purchase consideration of $15.5 million was comprised of cash consideration of $14.5 million, subject to adjustment for customary prorations, transfer taxes, escrow holdbacks and other adjustments, and $1.0 million in acquisition-related expenses. As part of this transaction, the Company hired approximately 180 employees who were previously employed by the Seller. The Company accounted for this transaction as an asset acquisition and recorded the acquired tangible and intangible assets based on each asset’s relative fair value at the acquisition date to the total purchase price plus capitalized acquisition costs. Fair value of building and land were determined by a real estate appraisal prepared by an independent real estate appraiser. Fair value of assembled workforce was based on estimated replacement costs that utilize available market information and discount and/or capitalization rates as appropriate.

The following table details the purchase price allocation of the acquired assets based on their relative fair values as of the acquisition date:


(in thousands)
Manufacturing equipment	$	1,273
Building	9,576
Land	2,774
Assembled workforce(1)	1,859
Total	$	15,482

_____________

(1) Assembled workforce is recorded in Other non-current assets, net in the consolidated balance sheet and will be amortized over an estimated useful life of approximately 2.0 years.