Torgau Acquisition

3 Months Ended

Mar. 31, 2023

Note 2. Torgau Acquisition

On September 30, 2022, the Company acquired all of the issued and outstanding shares of Wood Holdco GmbH, which is the parent company of Torgau for consideration of €270.0 million ($263,196) cash. The acquisition results in 100% ownership of a timber processing and value-add pallet production facility in Torgau, Germany and a wood processing facility in Dahlen, Germany that produces garden products. The acquisition of Torgau expands the Company’s solid wood business and further diversifies the Company’s product offerings.

Note 2. Torgau Acquisition (continued)

The following table summarizes the Company’s preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed on the acquisition date:


	Purchase Price Allocation
Cash	$	6,592
Accounts receivable		13,202
Inventories		50,900
Other current assets		2,548
Property, plant and equipment		205,450
Amortizable intangible assets (a)		25,141
Goodwill (b)		31,213
Other long-term assets		3,934
Total assets acquired		338,980
Accounts payable and other current liabilities		(43,905	)
Deferred income tax		(29,390	)
Other long-term liabilities		(2,489	)
Total liabilities assumed		(75,784	)
Net assets acquired	$	263,196

(a)

Amortizable intangible assets include an order backlog, which has an estimated fair value of $15,243 and is being amortized on a straight-line basis over six months and an energy sales agreement, which has an estimated fair value of $9,898 and is being amortized on a straight-line basis over 12 years.

(b)

The goodwill is primarily for expected synergies from combining the operations of Torgau with the Company’s existing German operations. The goodwill is not deductible for tax purposes.

The purchase price allocation was based on a preliminary valuation and may be revised as a result of additional information obtained regarding the assets acquired and liabilities assumed, and revisions of provisional estimates of fair value, including, but not limited to, the completion of valuations related to property, plant, and equipment and the identification of intangible assets. During the three month period ended March 31, 2023, immaterial adjustments were made to the purchase price allocation to reflect the most current calculation of the deferred tax liabilities. The purchase price will be finalized during the 12-month measurement period following the acquisition date.