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ACQUISITIONS | 3 Months Ended
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Mar. 31, 2025
ACQUISITIONS |
ACQUISITIONS | NOTE 2. ACQUISITIONS RockyMounts On December 5, 2024, Clarus and its wholly-owned subsidiary, Rhino-Rack USA LLC, entered into an Asset Purchase Agreement (the “RockyMounts Purchase Agreement”) with RockyMounts, Inc. (the “Seller” or “RockyMounts”) and Robert C. Noyes, pursuant to which the Company agreed to (i) acquire certain assets and liabilities of the Seller constituting the RockyMounts business, including equipment, inventory, intellectual property (including exclusive use of the brand name ROCKYMOUNTS and the tradename ROCKY MOUNTS INC.), software, domain names and social media accounts, and (ii) assume certain liabilities related to the RockyMounts assets, including all liabilities and obligations of the Seller under the Assigned Contracts (as defined in the RockyMounts Purchase Agreement), arising or to be performed after the closing of the RockyMounts Purchase Agreement. Pursuant to the RockyMounts Purchase Agreement, the purchase price to be paid for the RockyMounts assets is up to $8,000, which includes (i) $4,000 paid in cash at closing, subject to adjustment as set forth in the RockyMounts Purchase Agreement, (ii) the issuance of a promissory note by Rhino-Rack USA LLC in favor of the Seller in the original principal amount of $2,000, payable on the one-year anniversary of the closing of the RockyMounts Purchase Agreement, and (iii) the payment of additional contingent consideration of up to $2,000 in cash upon the satisfaction of certain net sales targets (the “RockyMounts Contingent Consideration”). The Company estimated the initial fair value of the RockyMounts Contingent Consideration to be $609 and recorded this liability within accrued liabilities. See Note 11 for discussion regarding the valuation of the RockyMounts Contingent Consideration as of March 31, 2025. The acquisition was accounted for as a business combination. The Company believes the acquisition of RockyMounts will provide the Company with a greater combined global revenue base, increased gross margins, profitability and free cash flows, and access to increased liquidity to further acquire and grow businesses. The following table is a reconciliation to the fair value of the purchase consideration and how the purchase consideration is allocated to assets acquired and liabilities assumed which have been estimated at their fair values. The fair value estimates for the purchase price allocation for RockyMounts are based on the Company’s best estimates and assumptions as of the reporting date and are considered preliminary. The fair value measurements of identifiable assets and liabilities, and the resulting goodwill related to the RockyMounts Acquisition are subject to change and the final purchase price allocations could be different from the amounts presented below. We expect to finalize the valuations as soon as practicable, but not later than one year from the date of the acquisition. The excess of purchase consideration over the assets acquired and liabilities assumed is recorded as goodwill. Goodwill for RockyMounts is included in the Adventure segment. The goodwill consists largely of the growth and profitability expected from these acquisitions. ​
​ | ​ | ​
​ | RockyMounts
​ | December 5, 2024
​ | Estimated Fair Value
​ | ​ | ​
Cash paid | $ | 3,840
​ | ​ | ​
Seller Note | ​ | 1,878
​ | ​ | ​
Contingent consideration | ​ | 609
​ | ​ | ​
Total purchase consideration | $ | 6,327
​ | ​ | ​
Assets acquired and liabilities assumed | ​ | ​
Assets | ​ | ​
Accounts receivable | $ | 160
Inventories | ​ | 928
Prepaid and other current assets | ​ | 85
Property and equipment | ​ | 97
Other intangible assets | ​ | 2,366
Goodwill | ​ | 2,741
Total assets | ​ | 6,377
​ | ​ | ​
Liabilities | ​ | ​
Accounts payable and accrued liabilities | $ | 50
Total liabilities | ​ | 50
​ | ​ | ​
Net Book Value Acquired | $ | 6,327
​ The estimated fair value of inventory was recorded at expected sales price less cost to sell plus a reasonable profit margin for selling efforts. ​ In connection with the acquisition, the Company acquired exclusive rights to RockyMounts’ trademarks, customer relationships, product technologies, and tradenames. The amounts assigned to each class of intangible asset, other than goodwill acquired, and the related average useful lives are as follows: ​
​ | ​ | ​ | ​ | ​
​ | RockyMounts
​ | ​ | ​ | Average
​ | Gross | Useful Life
​ | ​ | ​ | ​ | ​
Intangibles subject to amortization | ​ | ​ | ​ | ​
Customer relationships | $ | 1,138 | ​ | 3.0 years
Product technologies | ​ | 374 | ​ | 3.0 years
Tradenames | ​ | 622 | ​ | 3.0 years
Non-compete agreements | ​ | 232 | ​ | 5.0 years
​ | $ | 2,366 | ​ | 3.2 years
​ The full amount of goodwill of $2,741 at RockyMounts is expected to be deductible for tax purposes. No pre-existing relationships existed between the Company and RockyMounts or their sellers prior to the acquisition. RockyMounts revenue and operating income are included in the Adventure segment. Total revenue and net income of RockyMounts from the date of acquisition to December 31, 2024 were not material to the Company’s consolidated financial statements.

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