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Acquisitions, Divestitures and Discontinued Operations
 12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Acquisitions, Divestitures and Discontinued Operations Acquisitions, Divestitures and Discontinued Operations
Acquisitions
For each acquisition, the Company allocates the purchase price to the assets acquired and the liabilities assumed based on their fair values as of their respective acquisition dates. The results of operations for acquired businesses are included in the Company’s consolidated statements of income beginning on their respective acquisition dates.
2020
The Company acquired several businesses for approximately $86,384, net of cash acquired, during the year ended December 31, 2020. The Company has not recognized any significant measurement period adjustments related to finalizing acquisition accounting during the year ended December 31, 2020.
2019
The Company's cash used in acquisitions of businesses totaled $732,142, net of cash acquired, during the year ended December 31, 2019. In the Automotive Parts Group, the acquired businesses included all of its equity interests in Hennig Fahrzeugteile Group ("Hennig") in January 2019 and of PartsPoint Group in June 2019, which together generate estimated annual revenues of approximately $520,000, as well as several bolt-on acquisitions.
In the Industrial Parts Group, the Company acquired all of the equity interests in Axis New England and Axis New York ("Axis") in March 2019, which generate estimated annual revenue of approximately $55,000, and the remaining 65% equity investment in Inenco Group Pty Ltd (now referred to as Motion Asia Pacific) in July 2019. Motion Asia Pacific is one of Australasia's leading industrial distributors of key product categories such as bearings, power transmission and seals and it generates estimated annual revenues of approximately $400,000. Prior to the 65% acquisition, the Company accounted for its 35% investment in Motion Asia Pacific under the equity method of accounting. Upon acquisition the Company recognized the
35% investment at its acquisition-date fair value of $123,385. The difference between the acquisition-date fair value and the carrying amount of the equity method investment resulted in the recognition of a gain of $38,663 on the acquisition date. The acquisition-date fair value was determined using a market and income approach with the assistance of a third party valuation firm. The gain is included in the line item "other" within non-operating expenses (income) on the consolidated statement of income for the year ended December 31, 2019.
The total acquisition date fair value of the consideration transferred for the businesses and of any previously held equity interests was $860,712, net of cash acquired of $16,591, and it consisted of the following:
December 31, 2019
Cash
$732,142 
Fair value of 35% investment in Motion Asia Pacific held prior to business combination
123,385 
Fair value of other investments held prior to business combination
5,185 
Total
$860,712 
The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition dates for the aggregate of these businesses.
As of Acquisition Dates
Trade accounts receivable
$148,543 
Merchandise inventories
319,579 
Prepaid expenses and other current assets
788 
Intangible assets
340,799 
Deferred tax assets
1,480 
Property, plant and equipment
70,958 
Operating lease assets
127,470 
Other assets
20,318 
Total identifiable assets acquired
1,029,935 
Current liabilities
122,307 
Long-term debt
164,662 
Operating lease liabilities
61,626 
Deferred tax liabilities
67,081 
Other long-term liabilities
132,187 
Total liabilities assumed
547,863 
Net identifiable assets acquired
482,072 
Noncontrolling interests in a subsidiary
(1,600)
Goodwill
380,240 
Net assets acquired
$860,712 
The acquired intangible assets of approximately $340,799 were assigned to customer relationships of $304,302, trademarks of $32,907, and other intangibles of $3,590 with weighted average amortization lives of 16.6, 21.7, and 5.0 years, respectively, for a total weighted average amortization life of 17.0 years.
The goodwill recognized as part of the acquisitions is generally not tax deductible. The goodwill is attributable primarily to the expected synergies and assembled workforces of the acquired businesses.
2018
For the year ended December 31, 2018, the Company acquired several businesses for approximately $262,510, net of cash acquired. The Company recorded approximately $167,000 of goodwill and other intangible assets associated with the 2018 acquisitions. Other intangible assets acquired consisted of customer relationships of $76,000 with weighted average amortization lives of 15 years.
Divestitures
2020
The Company received proceeds from divestitures of businesses totaling $387,379 during the year ended December 31, 2020. Refer to the discontinued operations section below for additional information.
2019
The Company received proceeds from divestitures of businesses totaling $434,609 during the year ended December 31, 2019. The divestitures are not considered strategic shifts that will have a major effect on the Company’s operations or financial results; therefore, they are not reported as discontinued operations. The Company recognized realized currency losses of $34,701 during the year ended December 31, 2019. These losses are included in the line item "other" within non-operating expenses (income) on the consolidated statement of income for the year ended December 31, 2019.
Grupo Auto Todo
On March 7, 2019, the Company sold all of its equity in Grupo Auto Todo, a Mexican subsidiary within the Automotive Parts Group. Grupo Auto Todo contributed revenues of $15,900 for the year ended December 31, 2019 and $93,000 for the year ended December 31, 2018.
EIS
During the third quarter of 2019, the Company approved a transaction to sell EIS, a wholly owned subsidiary within the Industrial Parts Group. The transaction closed on September 30, 2019. EIS contributed revenues of $588,031 for the year ended December 31, 2019 and $817,249 for the year ended December 31, 2018.
Discontinued Operations
Business Products Group
Effective June 30, 2020, the Company completed the divestiture of its Business Products Group by selling Supply Source Enterprises, Inc. ("SSE") and S.P. Richards Company ("SPR") in separate transactions. These divestitures are part of the Company's long-term strategic initiative to streamline its operations and optimize its portfolio so that it can drive shareholder value by focusing on its global Automotive and Industrial Parts Groups. The Business Products Group was previously a reportable segment of the Company. These divestitures, together with prior period divestitures of Garland C. Norris (effective December 13, 2019), SPR Canada (effective January 1, 2020) and Safety Zone Canada (effective March 2, 2020), represent a single plan to exit the Business Products Group segment and are considered a strategic shift that will have a major effect on the Company’s operations and financial results. Therefore, the results of operations, financial position and cash flows for the Business Products Group are reported as discontinued operations for all periods presented.
The Company maintains an investment in SPR with a carrying value of $67,601, which is included within other assets on the consolidated balance sheet, as of December 31, 2020. During the three months ended December 31, 2020, the Company recognized an allowance on the investment and corresponding charge of $17,000 equal to the current expected credit losses based on a consideration of historical experience, current market conditions and reasonable and supportable forecasts related to this investment. This charge is included within non-operating expenses (income) on the consolidated statement of income for the year ended December 31, 2020.
The Company also remains involved with SPR for a limited period of time through various lease, sublease, freight distribution and transition service agreements. The Company has concluded that SPR is a variable interest entity, but the Company is not the primary beneficiary and therefore the entity is not consolidated. Among other things, the Company does not have any voting rights and does not have the power to direct the activities that most significantly affect SPR's economic performance. For a limited period of time as SPR completes its transition away from the Company’s shared services platform, the Company
continues to pay certain payables on SPR’s behalf and at SPR’s direction with full, weekly reimbursement from SPR under the terms of a transition services agreement.
The Company’s results of operations for discontinued operations were:
Year Ended December 31,
202020192018
Net sales$846,944 $1,870,071 $1,903,468 
Cost of goods sold632,007 1,413,485 1,439,436 
Gross profit214,937 456,586 464,032 
Operating and non-operating expenses179,461 476,521 383,058 
Loss on disposal223,928 9,048 — 
(Loss) income before income taxes(188,452)(28,983)80,974 
Income taxes4,045 (3,593)20,034 
Net (loss) income from discontinued operations$(192,497)$(25,390)$60,940 

The Company’s assets and liabilities for discontinued operations, by major class, were:
December 31, 2019
Assets
Trade accounts receivable, net$194,903 
Merchandise inventories, net387,307 
Prepaid expenses and other current assets132,041 
Other intangible assets, net76,829 
Operating lease assets80,302 
Other assets91,640 
Total assets of discontinued operations$963,022 
Liabilities
Trade accounts payable$158,163 
Other current liabilities59,954 
Long-term liabilities68,906 
Total liabilities of discontinued operations$287,023