Acquisitions

6 Months Ended

Jun. 30, 2023

3. Acquisitions

Mohawk

On May 31, 2022, the Company acquired the assets of Mohawk, a leading auto aftermarket distributor, which is included in the Distribution Segment. The Mohawk acquisition aligns with the Company's long-term objective to optimize and grow its Distribution business. Cash consideration was $27.8 million, net of $1.1 million of cash acquired. Total cash consideration also includes a $3.5 million working capital adjustment, of which $3.3 million was settled in November 2022 and $0.2 million was settled in February 2023. The Company funded the acquisition with proceeds from the Loan Agreement described in Note 11.

The acquisition of Mohawk was accounted for using the acquisition method, whereby all of the assets acquired and liabilities assumed were recognized at their fair value on the acquisition date, with any excess of the purchase price over the estimated fair value recorded as goodwill. The following table summarizes the allocation of the purchase price based on the estimated fair value of assets acquired and liabilities assumed, including measurement period adjustments.


	Initial Allocation of Consideration		Measurement Period Adjustments(1)			Final Allocation
Assets acquired:
Accounts receivable	$	10,137	$	458		$	10,595
Inventories		8,209		(16	)		8,193
Prepaid expenses		104		—			104
Other assets - long term		30		—			30
Property, plant and equipment		1,432		(261	)		1,171
Right of use asset - operating leases		1,367		—			1,367
Intangible assets		7,720		90			7,810
Goodwill		7,485		(403	)		7,082
Assets acquired	$	36,484	$	(132	)	$	36,352

Liabilities assumed:
Accounts payable	$	5,996	$	(191	)	$	5,805
Accrued expenses		1,414		(70	)		1,344
Operating lease liability - short term		399		—			399
Operating lease liability - long term		968		—			968
Total liabilities assumed		8,777		(261	)		8,516

Net acquisition cost	$	27,707	$	129		$	27,836

(1) The Company's preliminary purchase price allocation changed due to additional information and further analysis.

The goodwill represents the future economic benefits arising from other assets acquired that could not be individually and separately recognized, and the Company expects that the goodwill recognized for the acquisition will be deductible for tax purposes.

The intangible assets included above consist of the following:


	Fair Value		Weighted Average Estimated Useful Life
Customer relationships	$	5,500	12.0 years
Trade name		2,000	5.0 years
Non-competition agreements		310	5.0 years
Total amortizable intangible assets	$	7,810