ACQUISITIONS

9 Months Ended

Sep. 30, 2023

ACQUISITIONS

ACQUISITIONS

2. ACQUISITIONS

On July 31, 2023, a subsidiary of the Company, Blast Asset Acquisition LLC, completed its acquisition of substantially all of the assets of Vital Pharmaceuticals, Inc. and its debtor affiliates (collectively, “Bang Energy”) (the “Bang Transaction”). The acquired assets primarily include Bang Energy® drinks and a beverage production facility in Phoenix, AZ.

The Company accounted for the Bang Transaction in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations”. Under the acquisition method of accounting, the Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. During the three-months ended September 30, 2023, in connection with the Bang Transaction, the Company recorded a gain of $45.4 million in interest and other income (expense), net within the condensed consolidated statements of income and reported within the Corporate and Unallocated segment (the "Bang Transaction Gain"). During the three-and nine-months ended September 30, 2023, the Company incurred approximately $8.0 million and $15.1 million, respectively, of acquisition costs related to the Bang Transaction.

The following table summarizes the preliminary fair value allocations of the Bang Transaction:

	Identifiable
	Assets Acquired
	and (Liabilities)		Consideration
	Assumed		Transferred
Intangibles - trademarks (non-amortizing)	$	209,000	$	—
Intangibles - customer relationships (amortizing)		23,000		—
Property and equipment, net		143,200		—
Inventory		30,496		—
Right-of -use assets		12,523		—
Operating lease liabilities		(12,523)		—
Working capital (excluding inventory)		2,871		—
Other		200		—
Cash		—		363,385
Bang Transaction Gain		—		45,382
Total	$	408,767	$	408,767

The fair value analysis has yet to progress to a stage where there is sufficient information for a definitive measurement of the respective fair values. Accordingly, the respective fair value allocations are preliminary and are based on valuations derived from estimated fair value assumptions used by management. The Company expects to complete its fair value analysis at a level of detail necessary to finalize the underlying fair value allocations as soon as practicable, but no later than twelve months from the closing of the Bang Transaction. Any differences between the final respective fair value allocations and the preliminary management estimates may have an impact on the Company’s financial position and results of operations.

The Company determined the fair values as follows:

● Trademarks – relief-from-royalty method of the income approach

● Customer relationships – multi-period excess earnings method of the income approach

● Property and equipment – cost approach and market approach

● Inventory – comparative sales method and replacement cost method

● Bang Transaction Gain - residual of net assets acquired less cash consideration transferred

The book value of the working capital (excluding inventory) approximates fair value due to the short-term nature of the accounts.

For tax purposes, the Bang Transaction was recorded as an asset purchase.

In accordance with Regulation S-X, pro forma unaudited condensed financial information for the Bang Transaction has not been provided as the impact of the transaction on the Company’s financial position, results of operations and liquidity was not material.