Loss on Deconsolidation and Recognition of Equity Method Investment

12 Months Ended

Dec. 31, 2025

Equity Method Investments and Joint Ventures [Abstract]

Loss on Deconsolidation and Recognition of Equity Method Investment

Note 4. Loss on Deconsolidation and Recognition of Equity Method Investment

On June 21, 2025, the Company, through its wholly owned subsidiary SYNETIQ Ltd., entered into an agreement with LKQ Europe to establish a new joint venture, LKQ SYNETIQ, focused on vehicle parts dismantling and distribution services. To prepare for the transaction, the Company transferred the net assets to be used in the operations of the joint venture to a newly created entity. Pursuant to the agreement, the Company retained a 40% equity interest in the new entity, and LKQ Europe acquired a 60% equity interest for proceeds of £8.0 million (approximately $11.0 million), to be paid in equal installments on the third, fourth, and fifth anniversaries of the closing date.

The Company determined that it no longer controlled and therefore deconsolidated the entity at closing and recorded the fair value of its 40% equity interest within other non-current assets, by applying the equity method of accounting. The fair value of the initial carrying amount of the investment was determined based on the value implied by the transaction.

The loss on deconsolidation including within loss on divestiture and deconsolidation, net was determined as follows:

Fair value of consideration receivable	$	8.7
Initial carrying amount of the equity method investment	5.8
Carrying amount of net assets derecognized on deconsolidation	(30.0)
Loss on deconsolidation	$	(15.5)

The carrying amount of the net assets derecognized includes an allocation of goodwill, which was determined based on the relative fair value of the business in relation to the fair value of its associated reporting unit. The Company recognized a $1.7 million inventory write down in connection with the transaction, recognized within cost of inventory sold, and incurred $2.5 million in related transaction costs recognized within selling, general and administrative expenses in the year ended December 31, 2025.

LKQ Europe has an option to purchase the Company's remaining 40% equity interest in LKQ SYNETIQ during the six-month period following the fifth anniversary of the closing date at a price based on the trailing gross profit of LKQ SYNETIQ for specified periods. If LKQ Europe does not exercise its option, the Company will have the right to initiate a sale of LKQ SYNETIQ's assets or shares or require LKQ Europe to sell its shares to the Company at a price based on the trailing gross profit of LKQ SYNETIQ for specified periods.

Equity income (loss) for the period since deconsolidation, presented within other income (loss), net was not material for the year ended December 31, 2025.