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ACQUISITION | 9 Months Ended
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Jun. 30, 2022
ACQUISITION |
ACQUISITION | 2. ACQUISITION ​ The Company and Chas. M. Sledd Company (“Sledd”), a West Virginia wholesale distributor serving the convenience store industry, jointly own and operate Team Sledd, LLC (“Team Sledd”), a limited liability company which owns and operates Sledd’s wholesale distribution business. ​ Pursuant to an operating agreement between the Company and Sledd, certain membership interests in Team Sledd may be redeemed over a period of years, with such redemptions being funded from the operations of Team Sledd. Any such redemptions would result in a corresponding increase in AMCON’s ownership percentage in Team Sledd. In May 2022 (the “Control Date”), Team Sledd redeemed additional membership interests from certain members. Prior to May 2022, the Company had a minority interest in Team Sledd, which had been accounted for under the equity method. As a result of the May 2022 redemption, the Company became the majority owner of Team Sledd with a controlling interest of approximately 56%. The Company provided no additional consideration to acquire control of Team Sledd. The costs incurred to effectuate the acquisition were not significant and were expensed as incurred. The acquisition expands the Company’s footprint and enhances our ability to service customers in the Mid-Atlantic region of the United States. ​ The transaction has been accounted for in accordance with Accounting Standards Codification (“ASC”) 805 – Business Combinations and the Company has measured the fair value of its previously held equity interest and the related non-controlling interest using the discounted cash flow methodology with the assistance of independent valuation consultants. The preliminary total fair value of Team Sledd was approximately $23.3 million, which resulted in a gain of approximately $2.4 million related to the fair value remeasurement of the Company’s ownership interest in Team Sledd. The gain was recorded as a component of other income in the Company’s Condensed Consolidated Unaudited Statement of Operations for Q3 2022. In connection with the transaction, the Company recorded a deferred tax liability of approximately $0.6 million which will be recognized in future periods when the associated taxes become due. Inputs used to measure the acquisition-date fair value of the Company’s previously held equity interest and the related non-controlling interest in the entity included sales growth, gross profit estimates, economic and industry conditions, working capital requirements and the contractual requirements of the operating agreement. Team Sledd is being reported as a component of the Company’s Wholesale Segment. ​ The following tables summarize the acquisition-date fair value of Team Sledd, the preliminary fair value of Team Sledd’s assets and liabilities at the Control Date, and the resulting goodwill. The fair values are based on preliminary estimates and are subject to change as the Company obtains additional information during the measurement period (up to one year from the acquisition date). ​
​ | ​ | ​ | ​
Acquisition-date fair value of non-controlling interest |  | $ | 10,419,138
Acquisition-date fair value of previously held interest | ​ | ​ | 12,897,444
Fair value of Team Sledd at the Control Date | ​ | $ | 23,316,582
​ | ​ | ​ | ​
Preliminary amounts of identifiable assets and liabilities at fair value: | ​ | ​ | ​
​ | ​ | ​ | ​
Cash | ​ | $ | 7,958
Accounts receivable | ​ | ​ | 29,524,181
Inventories | ​ | ​ | 42,896,135
Prepaid and other current assets | ​ | ​ | 2,533,205
Property and equipment | ​ | ​ | 21,002,604
Operating lease right-of use assets | ​ | ​ | 1,501,996
Other intangible assets | ​ | ​ | 1,664,000
Other assets | ​ | ​ | 1,685,945
Liabilities assumed | ​ | ​ | (78,340,442)
Total identifiable net assets | ​ | $ | 22,475,582
​ | ​ | ​ | ​
Goodwill | ​ | ​ | 841,000
​ | ​ | $ | 23,316,582
​ Accounts receivable were recorded at their fair value representing the amount we expect to collect. Gross contractual amounts receivable were approximately $1.7 million more than their acquisition-date fair value. ​ Goodwill totaling approximately $0.8 million arose from the acquisition and primarily represents synergies and economies of scale generated through reductions in selling, general, and administrative expenses. This goodwill has been assigned to the Company’s Wholesale Segment and is deductible for tax purposes. ​ Other intangible assets acquired consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Acquisition-Date | ​ | ​ | Useful Life
Other Intangible Asset |  | Fair Value |  |  | (Years)
Customer list | ​ | $ | 1,442,000 | ​ | ​ | 15
Non-competition agreement | ​ | ​ | 222,000 | ​ | ​ | 3
​ | ​ | $ | 1,664,000 | ​ | ​ | ​
​

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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 http://asc.fasb.org/topic&trid=2303972 + Details
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