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ACQUISITIONS

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

ACQUISITIONS

13. ACQUISITIONS

Business combinations are accounted for under the acquisition method of accounting in accordance with ASC No. 805, Business Combinations. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values. Goodwill is recorded to the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired less liabilities assumed at the date of acquisition.

Acquisition during 2020

Relec Electronics Ltd

On November 9, 2020, GWW entered into a Stock Purchase Agreement (the “Agreement”) with Tabard Holdings Inc., a Delaware corporation and wholly owned subsidiary of GWW (“Tabard”), the legal and beneficial owners (the “Sellers”) of 100% of the issued shares in the capital of Relec Electronics Ltd., a corporation organized under the laws of England and Wales (“Relec”), and Peter Lappin, in his capacity as the representative of the Sellers (the “Sellers’ Representative”). Relec was established in 1978 and provides specialist power conversion and display products. The acquisition of Relec expands GWW’s product offering and geographic reach. On November 30, 2020, the acquisition of Relec closed for an aggregate cash purchase price of $3,765,084, net of cash acquired, of which $3,627,534 had been paid at December 31, 2020. Pursuant to the Agreement, Tabard may be required to pay the Sellers a maximum of £500,000, or approximately $667,000, during 2021, 2022 and 2023. These earn-out payments are based on a combination of Relec’s gross margin and its minimum earnings before income taxes, depreciation and amortization.

Upon initial measurement, components of the purchase price are as follows:

		Relec
Accounts receivable		$	632,910
Prepaid and other current assets			53,127
Inventories, net			993,968
Property and equipment			94,167
Customer relationships			900,000
Trade name			500,000
Accounts payable and accrued expenses			(556,982	)
Net assets acquired			2,617,190
Goodwill			1,147,894
Purchase price		$	3,765,084

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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

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- References

No definition available.

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