Acquisition of Raeburn Assets

3 Months Ended

Mar. 31, 2026

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisition of Raeburn Assets

On February 9, 2026, Pine Ridge entered into a purchase agreement to acquire the Raeburn Assets. The acquisition provides a strategic opportunity for Crimson to expand its portfolio, particularly in the Chardonnay and Pinot Noir categories. The acquisition of the Raeburn Assets was funded with the Company’s cash on hand and borrowings under the Company’s existing revolving credit facility.

The Company follows the guidance as outlined in FASB Accounting Standards Codification (“ASC”) 805-50, Asset Acquisitions, and as amended by ASU No. 2017-01. In accordance with ASC 805, the Company determined this transaction should be accounted for as an acquisition of assets rather than as an acquisition of a business. This accounting distinction resulted in the required capitalization of certain transaction costs in arriving at a total cost basis to then allocate to the acquired assets based on their relative fair values. In addition to the $35.2 million purchase price paid to the seller, the Company capitalized approximately $2.3 million of transaction related costs. Therefore, the total consideration was estimated at $37.5 million under the cost accumulation method to serve as the cost basis for allocation to the acquired assets based on their relative fair values. The Company is in the process of finalizing certain transaction related costs and the measurements are subject to change.

The following table summarizes the initial purchase price allocation of the total cost basis to the identified assets at the acquisition date (in thousands):

Cost basis determination:


Cash transferred at close	$	35,207
Purchase price adjustment (capitalized transaction costs)	2,326
Total cost basis (cost accumulation method)	$	37,533

Cost basis allocation based on relative fair values:


Inventory	$	27,052
Brand (indefinite-lived)	10,481
Total cost basis (cost accumulation method)	$	37,533

The Company’s financial results for the three months ended March 31, 2026 include the results from the Raeburn Assets for the period since the date of acquisition.

While this asset acquisition was accounted for under the cost accumulation method rather than the acquisition method (valuation method used for a business acquisition), the relative fair values were utilized to allocate the total cost basis. The market approach and income approach were utilized in the determination of fair values for inventory and the brand, respectively. The fair value measurements were based on inputs including management estimates and assumptions, terminal growth rate of 2.5%, royalty rate of 5%, and discount rate of 12%, which are significant inputs not observable in the market and thus represent level 3 measurements as defined in ASC 820, Fair Value Measurement.