ACQUISITION

3 Months Ended

Mar. 31, 2023

ACQUISITIONS

S’well

On March 2, 2022, the Company acquired certain assets of Can't Live Without It, LLC. (dba S’well Bottle and which the Company refers to as “S’well”). The Company paid cash consideration of $18.0 million. The transaction also includes up to $5.0 million in contingent consideration, subject to the acquired brand reaching certain milestones.

The purchase price was comprised of the following (in thousands):


Cash paid(1)	$	17,956
Value of contingent consideration	650
Total purchase price	$	18,606

(1) Reflects final working capital adjustment of $21k pursuant to the terms of the Asset Purchase Agreement.

The value of contingent consideration represents the present value of estimated contingent payments of $0.7 million, related to the attainment of certain net sales contribution targets for the year 2024. Acquisition related costs of $0.9 million were recorded within selling, general and administrative expenses in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2022.

The purchase price was allocated based on the Company’s final estimate of the fair values of the assets acquired and liabilities assumed at the acquisition date, as follows (in thousands):


	Purchase Price Allocation
Accounts receivable	$	2,280
Inventory	4,005
Fixed assets	40

Intangible assets	13,000
Goodwill	2,966
Accounts payable and accrued expenses	(3,685)
Total allocated value	$	18,606

The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with FASB ASC Topic 805, Business Combinations (“ASC Topic 805”), which established a new basis of accounting for all identifiable assets acquired and liabilities assumed at fair value.

The goodwill and intangible assets are included in the U.S. segment. The trade name intangible asset is amortized on a straight-line basis over its estimated useful life of 12 years (see NOTE 6 — INTANGIBLE ASSETS). The goodwill recognized results from such factors as assembled workforce and the value of other synergies expected from combining operations with the Company. The associated goodwill is deductible for tax purposes over 15 years.

MPA International, LP

On May 3, 2023, the Company executed an asset purchase agreement to acquire the assets of MPA International, LP (a U.S. based company) and its subsidiary, Compania de Servicios de Manufactura de la Frontera, S. de R.L. de C.V (COSMA). The estimated purchase price is approximately $0.4 million, with the asset purchases and transfers expected to occur in the second and third quarter of 2023. The acquisition will result in the Company having manufacturing operations in Mexico in the form of a maquiladora producing a variety of plastic molded products, primarily for the Company’s kitchenware products.