Acquisition

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition

18. Acquisition:

In October 2023, we completed the acquisition of AES, a company dedicated to service and sustainability in the light commercial market. The total purchase price consideration, net of cash acquired, for the acquisition of AES was $94.9 million, which was primarily funded by cash and borrowings under our financing arrangements.

The purchase price was allocated to the assets acquired and liabilities assumed based on management’s estimate of the respective fair values at the date of acquisition. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were the assembled workforce, high-value service delivery capabilities and strategic benefits that are expected to be realized from the acquisition.

Under the terms of the purchase agreement, a final working capital adjustment is due in the first quarter of 2024. The preliminary allocation of the purchase price as of the acquisition date was as follows:

(Amounts in millions)	Amount
Total consideration paid	$	94.9
Net tangibles assets acquired	17.6
Intangible assets acquired	36.9
Total net assets acquired	54.5
Goodwill as of acquisition date	$	40.4

The purchase price allocation includes $36.9 million of acquired identifiable intangible assets, all of which have finite lives. The fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis. The determination of the useful lives is based upon various industry studies, historical acquisition experience, and economic factors.

The amounts allocated to intangible assets are as follows:

(Amounts in millions)	Gross Carrying Amount		Useful Life	Amortization Method
Customer relationships	$	27.9	10 to 15 years	Straight-line
Non-compete agreement	5.8		5 years	Straight-line
Trade names	1.8		5 to 10 years	Straight-line
Backlog	1.4		1 to 2 years	Straight-line
Total	$	36.9

Subsequent to the purchase of AES, we recognized net sales of approximately $13 million and the acquired business contributed approximately $1 million to the Building Climate Solutions segment profit from the date of acquisition through December 31, 2023.