3.	Acquisitions

Acquisition of Selmec

June 1, 2018,

the Company acquired Selmec for a purchase price of

$79,972,

net of cash acquired and inclusive of estimated earnout payments of

$14,902.

To date, the acquisition purchase price was funded solely through cash on hand.

The Company recorded a preliminary purchase price allocation during

2018

based upon its estimates of the fair value of the acquired assets and assumed liabilities. As a result, the Company recorded approximately

$80,418

of intangible assets, including approximately

$46,788

of goodwill recorded in the International segment, as of the acquisition date. The goodwill ascribed to the acquisition is

not

deductible for tax purposes. The accompanying consolidated financial statements include the results of Selmec from the date of acquisition through

December 31, 2018.

Acquisition of Pramac

March 1, 2016,

the Company acquired a

65%

ownership interest in Pramac for a purchase price, net of cash acquired, of

$60,250.

The acquisition purchase price was funded solely through cash on hand. The

35%

noncontrolling interest in Pramac had an acquisition date fair value of

$34,253,

and was recorded as a redeemable noncontrolling interest in the consolidated balance sheet, as the noncontrolling interest holder had within its control the right to require the Company to redeem its interest in Pramac. The noncontrolling interest holder had a put option to sell his interest to the Company any time within

five

years from the date of acquisition. Within the

first

two

years from the date of acquisition, the put option price was based on a fixed amount if voluntarily exercised. Subsequently, the put option price is based on the greater of the fixed amount or a multiple of earnings, subject to the terms of the acquisition. Additionally, the Company held a call option that it

may

redeem commencing

five

years from the date of acquisition, or earlier upon the occurrence of certain circumstances. The call option price is based on a multiple of earnings that is subject to the terms of the acquisition.

The redeemable noncontrolling interest is recorded at the greater of the initial fair value, increased or decreased for the noncontrolling interests’ share of comprehensive net income (loss), or the estimated redemption value, with any adjustment to the redemption value impacting retained earnings, but

not

net income. However, the redemption value adjustments are reflected in the earnings per share calculation, as detailed in Note

12,

“Earnings Per Share,” to the consolidated financial statements. The following table presents the changes in the redeemable noncontrolling interest:

	Year Ended December 31,
	2018			2017			2016
Balance at beginning of period	$	43,929		$	33,138		$	-
Noncontrolling interest of Pramac		-			1,540	(1)		34,253
Net income		2,214			1,631			100
Foreign currency translation		(3,109	)		8,529			(2,124	)
Redemption value adjustment		17,970			(909	)		909
Balance at end of period	$	61,004		$	43,929		$	33,138

(

)

Represents the additional noncontrolling interest of Pramac resulting from a common control transaction between the Generac Mobile Products S.r.l. and Pramac UK Limited legal entities.

February 7, 2019,

the Company amended its Quotaholders’ Agreement with the noncontrolling interest holder of Pramac. As of the date of signing, the noncontrolling interest holder

longer holds the right to put its shares to the Company until

April 1, 2021.

As a result, the noncontrolling interest will

longer be considered redeemable until the put option right returns on

April 1, 2021.

Additionally, the Company still holds a call option right that it

may

redeem; however, it

may

only call a portion of the remaining

35%

interest each year from

2021

through

2026.

The Company finalized the Pramac purchase price allocation during the

first

quarter of

2017.

The final purchase price allocation as of the

March 1, 2016

opening balance sheet date was as follows:

	March 1, 2016
Accounts receivable	$	50,716
Inventories		39,889
Property and equipment		19,138
Intangible assets		34,471
Goodwill		46,775
Other assets		7,698
Total assets acquired		198,687

Short-term borrowings		21,741
Accounts payable		40,270
Long-term debt and capital lease obligations (including current portion)		18,599
Other liabilities		23,521
Redeemable noncontrolling interest		34,253
Noncontrolling interest		53
Net assets acquired	$	60,250

The goodwill ascribed to this acquisition is

not

deductible for tax purposes. The accompanying consolidated financial statements include the results of Pramac from the date of acquisition through

December 31, 2018.

Pro Forma Information

The following unaudited pro forma information of the Company gives effect to all acquisitions as though the transactions had occurred on

January 1, 2016.

	Year Ended December 31,
	2018		2017		2016
Net Sales:
As reported	$	2,023,464	$	1,679,373	$	1,447,743
Pro forma		2,038,739		1,742,453		1,581,699

Net income attributable to Generac Holdings Inc.:
As reported	$	238,257	$	157,808	$	97,154
Pro forma		238,362		161,854		103,193

Net income attributable to Generac Holdings Inc. per common share - diluted
As reported	$	3.54	$	2.53	$	1.47
Pro forma		3.54		2.60		1.56

This unaudited pro forma information is presented for informational purposes only and is

not

necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated on

January 1, 2016.