Acquisitions	9 Months Ended
Sep. 30, 2020
Business Combinations [Abstract]
Acquisitions	NOTE 4. ACQUISITIONS We account for acquisitions under the acquisition method and the results of operations of acquired operations are included in the condensed consolidated financial statements from the acquisition date. Acquisition related costs are expensed as incurred. We allocate total consideration to the assets acquired and liabilities assumed based on their estimated fair values, with the remaining unallocated amount recorded as goodwill. The fair value of acquired intangible assets is estimated by applying discounted cash flow models based on significant level 3 inputs not observable in the market. Key assumptions are developed based on each acquirees’ historical experience, future projections and comparable market data including future cash flows, long-term growth rates, implied royalty rates, attrition rates and discount rates. MOZ On August 24, 2020, we acquired the business and assets of Moz for a purchase price of $4.2 million and additional contingent consideration payable in 2022 not to exceed $4.7 million. The total fair value of liabilities assumed, less tangible assets acquired, was $0.5 million. The total fair value of identifiable intangible assets acquired was $3.2 million, comprised of non-amortizable tradenames of $1.7 million and amortizable customer relationships of $1.5 million, resulting in $4.0 million of goodwill. All of the acquired goodwill is deductible for tax purposes. The fair value of liabilities assumed included $2.5 million for contingent consideration. Valuations for assets acquired and liabilities assumed are based on preliminary estimates that are subject to revisions and may result in adjustments to preliminary values as valuations are finalized. The contingent consideration is payable upon achievement of certain future performance objectives through 2021. The fair value of contingent consideration will be remeasured at each reporting period, and any future adjustments will be recorded as a component of selling, general and administrative (“SG&A”) expenses in our Condensed Consolidated Statements of Operations and Comprehensive Income. TURF On July 27, 2020, we acquired all the issued and outstanding capital stock of Turf for a purchase price of $70.0 million and additional contingent consideration payable in 2022 and 2023 not to exceed $48.0 million. The total fair value of tangible assets acquired, less liabilities assumed, was $4.8 million. The total fair value of identifiable intangible assets acquired was $27.9 million, mostly comprised of non-amortizable tradenames of $9.6 million in addition to amortizable customer relationships of $7.7 million, patents of $5.8 million and a non-compete agreement of $3.3 million, resulting in $50.7 million of goodwill. All of the acquired goodwill is deductible for tax purposes. The fair value of liabilities assumed included $13.4 million for contingent consideration. Valuations for assets acquired and liabilities assumed are based on preliminary estimates that are subject to revisions and may result in adjustments to preliminary values as valuations are finalized. The contingent consideration is payable upon achievement of certain future performance objectives through 2022. The contingent consideration includes up to $24.0 million in additional cash consideration for performance at certain revenue and EBITDA growth targets. Full payout for target performance requires compounded annual growth rates in excess of 23% through 2022. The contingent consideration also includes up to $24.0 million in additional cash consideration for performance over revenue and EBITDA growth targets. Full payout for achievement over target performance requires compounded annual growth rates in excess of 38% through 2022. The fair value of contingent consideration will be remeasured at each reporting period, and any future adjustments will be recorded as a component of SG&A expenses in our Condensed Consolidated Statements of Operations and Comprehensive Income. MRK On November 25, 2019, we acquired the business and assets of MRK for a purchase price of $13.3 million. The total fair value of tangible assets acquired, less liabilities assumed, was $2.9 million, resulting in $10.4 million of goodwill. All of the acquired goodwill is deductible for tax purposes. ACGI On March 4, 2019, we acquired the business and assets of ACGI for a purchase price of $42.9 million. The total fair value of tangible assets acquired, less liabilities assumed, was $7.3 million. The total fair value of identifiable intangible assets acquired was $12.0 million, mostly comprised of amortizable customer relationships of $7.4 million and amortizable tradenames of $2.8 million, resulting in $23.6 million of goodwill. All of the acquired goodwill is deductible for tax purposes. The 2020 and 2019 acquisitions, both individually and in the aggregate, did not have a material impact on reported net sales or operating income for the three and nine months ended September 30, 2020 and 2019.

Acquisitions

9 Months Ended

Sep. 30, 2020

NOTE 4. ACQUISITIONS

We account for acquisitions under the acquisition method and the results of operations of acquired operations are included in the condensed consolidated financial statements from the acquisition date. Acquisition related costs are expensed as incurred. We allocate total consideration to the assets acquired and liabilities assumed based on their estimated fair values, with the remaining unallocated amount recorded as goodwill. The fair value of acquired intangible assets is estimated by applying discounted cash flow models based on significant level 3 inputs not observable in the market. Key assumptions are developed based on each acquirees’ historical experience, future projections and comparable market data including future cash flows, long-term growth rates, implied royalty rates, attrition rates and discount rates.

MOZ

On August 24, 2020, we acquired the business and assets of Moz for a purchase price of $4.2 million and additional contingent consideration payable in 2022 not to exceed $4.7 million. The total fair value of liabilities assumed, less tangible assets acquired, was $0.5 million. The total fair value of identifiable intangible assets acquired was $3.2 million, comprised of non-amortizable tradenames of $1.7 million and amortizable customer relationships of $1.5 million, resulting in $4.0 million of goodwill. All of the acquired goodwill is deductible for tax purposes. The fair value of liabilities assumed included $2.5 million for contingent consideration. Valuations for assets acquired and liabilities assumed are based on preliminary estimates that are subject to revisions and may result in adjustments to preliminary values as valuations are finalized.

The contingent consideration is payable upon achievement of certain future performance objectives through 2021. The fair value of contingent consideration will be remeasured at each reporting period, and any future adjustments will be recorded as a component of

selling, general and administrative (“SG&A”) expenses in our Condensed Consolidated Statements of Operations and Comprehensive Income.

TURF

On July 27, 2020, we acquired all the issued and outstanding capital stock of Turf for a purchase price of $70.0 million and additional contingent consideration payable in 2022 and 2023 not to exceed $48.0 million. The total fair value of tangible assets acquired, less liabilities assumed, was $4.8 million. The total fair value of identifiable intangible assets acquired was $27.9 million, mostly comprised of non-amortizable tradenames of $9.6 million in addition to amortizable customer relationships of $7.7 million, patents of $5.8 million and a non-compete agreement of $3.3 million, resulting in $50.7 million of goodwill. All of the acquired goodwill is deductible for tax purposes. The fair value of liabilities assumed included $13.4 million for contingent consideration. Valuations for assets acquired and liabilities assumed are based on preliminary estimates that are subject to revisions and may result in adjustments to preliminary values as valuations are finalized.

The contingent consideration is payable upon achievement of certain future performance objectives through 2022. The contingent consideration includes up to $24.0 million in additional cash consideration for performance at certain revenue and EBITDA growth targets. Full payout for target performance requires compounded annual growth rates in excess of 23% through 2022. The contingent consideration also includes up to $24.0 million in additional cash consideration for performance over revenue and EBITDA growth targets. Full payout for achievement over target performance requires compounded annual growth rates in excess of 38% through 2022. The fair value of contingent consideration will be remeasured at each reporting period, and any future adjustments will be recorded as a component of SG&A expenses in our Condensed Consolidated Statements of Operations and Comprehensive Income.

MRK

On November 25, 2019, we acquired the business and assets of MRK for a purchase price of $13.3 million. The total fair value of tangible assets acquired, less liabilities assumed, was $2.9 million, resulting in $10.4 million of goodwill. All of the acquired goodwill is deductible for tax purposes.

ACGI

On March 4, 2019, we acquired the business and assets of ACGI for a purchase price of $42.9 million. The total fair value of tangible assets acquired, less liabilities assumed, was $7.3 million. The total fair value of identifiable intangible assets acquired was $12.0 million, mostly comprised of amortizable customer relationships of $7.4 million and amortizable tradenames of $2.8 million, resulting in $23.6 million of goodwill. All of the acquired goodwill is deductible for tax purposes.

The 2020 and 2019 acquisitions, both individually and in the aggregate, did not have a material impact on reported net sales or operating income for the three and nine months ended September 30, 2020 and 2019.