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Business Combinations
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Business Combinations BUSINESS COMBINATIONS
As part of our ongoing strategy to expand geographically and increase market share in certain markets, as well as diversify our products and end markets, we completed nine business combinations during the year ended December 31, 2024 and eight business combinations during each of the years ended December 31, 2023 and 2022, respectively. We also completed two insignificant tuck-in acquisitions which merged into existing operations during the year ended December 31, 2024 and one tuck-in acquisition during the year ended December 31, 2023. Acquisition-related costs amounted to $2.2 million, $1.9 million and $3.0 million for the years ended December 31, 2024, 2023 and 2022, respectively, and are included in administrative expenses on the Consolidated Statements of Operations and Comprehensive Income. In addition, we recognized gains on acquisition earnouts on the Consolidated Statements of Operations and Comprehensive Income of $16.1 million for the year ended December 31, 2022, due to probability assessments and the cancellations of acquisition-related earnouts. We did not recognize any gains on acquisition earnouts during the years ended December 31, 2024 and 2023. The gain recorded during the year ended December 31, 2022 is primarily comprised of a $15.1 million gain for the Central Aluminum Supply ("CAS") acquisition recorded as a result of revised earnout target expectations.
Below is a summary of each significant acquisition by year, including revenue and net income (loss) since date of acquisition, shown for the year of acquisition. The largest of our 2024 acquisitions were Euroview Enterprises, LLC and Contract Mirror and Supply, LLC (collectively, "Euroview") in July 2024, Wholesale Insulation Supply, Inc. ("Insulation Supplies") in October 2024 and Tatum Insulation III, LLC ("Tatum") in November 2024. Insulation Supplies sells various insulation products and equipment to customers so it was assigned to our Distribution operating segment. The largest of our 2023 acquisitions was Anchor Insulation Co., Inc. ("Anchor") in March 2023. In each table, “Other” represents acquisitions that were individually immaterial in that year. Net income (loss), as noted below, includes intangible asset amortization, taxes and interest allocations when appropriate.
For the year ended December 31, 2024 (in millions):
2024 AcquisitionsDateAcquisition TypeCash PaidSeller ObligationsTotal Purchase PriceRevenueNet Income
Euroview7/29/2024Asset$19.2 $1.6 $20.8 $7.3 $0.6 
Insulation Supplies10/7/2024Asset17.4 0.1 17.5 5.7 0.7 
Tatum11/12/2024Share20.4 0.6 21.0 1.7 — 
OtherVariousAsset31.6 2.8 34.4 21.3 0.7 
Total$88.6 $5.1 $93.7 $36.0 $2.0 
For the year ended December 31, 2023 (in millions):
2023 AcquisitionsDateAcquisition TypeCash PaidSeller ObligationsTotal Purchase PriceRevenueNet Income
Anchor3/12/2023Share$35.9 $2.7 $38.6 $30.4 $1.6 
OtherVariousAsset23.7 1.6 25.3 9.0 0.2 
Total$59.6 $4.3 $63.9 $39.4 $1.8 
For the year ended December 31, 2022 (in millions):
2022 AcquisitionsDateAcquisition TypeCash PaidSeller ObligationsTotal Purchase PriceRevenueNet (Loss) Income
CAS04/11/2022Share$55.1 $27.3 $82.4 $37.8 $(1.0)
ABS12/19/2022Share23.1 0.5 23.6 0.7 (0.1)
OtherVariousAsset/Share35.8 3.7 39.5 22.6 0.8 
Total$114.0 $31.5 $145.5 $61.1 $(0.3)
Purchase Price Allocations
The estimated fair values of the assets acquired and liabilities assumed for the acquisitions, as well as total purchase prices and cash paid, approximated the following (in millions):
2024
EuroviewInsulation SuppliesTatumOtherTotal
Estimated fair values:
Accounts receivable$— $2.3 $1.6 $2.0 $5.9 
Inventories1.7 1.4 0.8 1.6 5.5 
Other current assets— — — — — 
Property and equipment0.7 0.2 0.7 3.0 4.6 
Operating lease right-of-use asset0.7 1.2 — 0.2 2.1 
Intangibles9.8 8.7 11.5 19.0 49.0 
Goodwill9.0 6.5 7.1 10.5 33.1 
Other non-current assets— 0.1 — 0.2 0.3 
Accounts payable and other current liabilities(0.7)(1.8)(0.7)(2.0)(5.2)
Other long-term liabilities(0.4)(1.1)— (0.1)(1.6)
Fair value of assets acquired and purchase price20.8 17.5 21.0 34.4 93.7 
Less seller obligations1.6 0.1 0.6 2.8 5.1 
Cash paid$19.2 $17.4 $20.4 $31.6 $88.6 
2023
AnchorOtherTotal
Estimated fair values:
Accounts receivable$5.0 $2.1 $7.1 
Inventories1.6 1.4 3.0 
Other current assets1.9 — 1.9 
Property and equipment2.3 1.9 4.2 
Operating lease right-of-use asset — 0.2 0.2 
Intangibles16.4 13.3 29.7 
Goodwill13.3 7.5 20.8 
Other non-current assets0.2 0.1 0.3 
Accounts payable and other current liabilities(2.1)(1.1)(3.2)
Other long-term liabilities— (0.1)(0.1)
Fair value of assets acquired and purchase price38.6 25.3 63.9 
Less seller obligations2.7 1.6 4.3 
Cash paid$35.9 $23.7 $59.6 
2022
CASABSOtherTotal
Estimated fair values:
Cash$0.2 $0.2 $0.1 $0.5 
Accounts receivable3.5 2.8 5.8 12.1 
Inventories13.4 0.9 2.5 16.8 
Other current assets0.1 0.3 0.1 0.5 
Property and equipment2.6 1.4 4.5 8.5 
Operating lease right of-use-asset0.8 — — 0.8 
Intangibles34.9 12.8 17.4 65.1 
Goodwill32.9 9.7 11.1 53.7 
Other non-current assets— — 0.1 0.1 
Accounts payable and other current liabilities(5.4)(3.4)(2.1)(10.9)
Deferred income tax liabilities— (1.1)— (1.1)
Other long-term liabilities(0.6)— — (0.6)
Fair value of assets acquired and purchase price82.4 23.6 39.5 145.5 
Less seller obligations27.3 0.5 3.7 31.5 
Cash paid$55.1 $23.1 $35.8 $114.0 
The goodwill recognized in conjunction with these business combinations represents the excess cost of the acquired entity over the net amount assigned to assets acquired and liabilities assumed (including the identifiable intangible assets). The goodwill recognized for Euroview and Tatum represents the advantage of their respective product lines, human capital, geographic presence and other benefits that are expected to be achieved from the acquisitions. The goodwill recognized for Insulation Supplies reflects the benefits derived from the expansion of our Distribution operating segment, further diversification of revenue streams and other efficiencies we anticipate to accomplish from the acquisition. The goodwill recognized for Anchor reflects the value of its location, revenue enhancements, assembled workforce and other synergies that are expected to be realized from the acquisition. We expect to deduct $32.9 million of goodwill for tax purposes as a result of 2024 acquisitions.
Contingent consideration, non-compete agreements and/or amounts based on working capital calculations are included as “seller obligations” in the above table or within “fair value of assets acquired” if subsequently paid during the period presented. Contingent consideration payments consist primarily of earnouts based on performance that are recorded at fair value at the time of acquisition. When these payments are expected to be made over one year from the acquisition date, the contingent consideration is discounted to net present value of future payments based on a weighted average of various future forecast scenarios.
Further adjustments to the allocation for each acquisition still under its measurement period are expected as third-party or internal valuations are finalized, certain tax aspects of the transaction are completed and customary post-closing reviews are concluded during the measurement period attributable to each individual business combination. As a result, adjustments to the fair value of assets acquired, and in some cases total purchase price, have been made to certain business combinations since the date of acquisition and future adjustments may be made through the end of each measurement period. Any acquisition acquired after December 31, 2023 is deemed to be within the measurement period and its purchase price considered preliminary. During the year ended December 31, 2023, we increased the purchase price for CAS by $4.4 million primarily due to measurement period adjustments associated with a tax election.
The provisional amounts for one of our 2022 acquisitions originally reported in our Consolidated Balance Sheets included in our Annual Report on Form 10-K for the period ended December 31, 2022 were adjusted due to adjustments to pre-acquisition financial information and a tax-related adjustment. As a result, we decreased goodwill and deferred tax liabilities by approximately $0.8 million and $1.3 million, respectively, and increased accounts payable and other current liabilities by $0.5 million during the year ended December 31, 2023. These adjustments were within applicable measurement period guidelines and did not impact earnings.
Goodwill and intangibles per the above table may not agree to the total gross increases of these assets as shown in Note 7, Goodwill and Intangibles, during the years ended December 31, 2024, 2023 and 2022 due to minor adjustments to goodwill for the allocation of certain acquisitions still under measurement as well as other immaterial intangible assets added during the
ordinary course of business. All of the goodwill for CAS and Insulation Supplies was assigned to our Distribution operating segment. All other acquisitions during the years ended December 31, 2024, 2023 and 2022 other than one immaterial acquisition in 2024 had their respective goodwill assigned to our Installation operating segment.
Estimates of acquired intangible assets related to the acquisitions are as follows (in millions):
202420232022
Acquired intangibles assets:Estimated Fair ValueWeighted Average Estimated Useful Life (yrs)Estimated Fair ValueWeighted Average Estimated Useful Life (yrs)Estimated Fair ValueWeighted Average Estimated Useful Life (yrs)
Customer relationships$33.1 12$19.4 12$45.3 12
Trademarks and trade names13.4 158.4 1516.8 15
Non-competition agreements2.5 51.1 52.6 5
Backlog— 00.8 10.4 1
Pro Forma Information (unaudited)
The unaudited pro forma information has been prepared as if the 2024 acquisitions had taken place on January 1, 2023, the 2023 acquisitions had taken place on January 1, 2022 and the 2022 acquisitions had taken place on January 1, 2021. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transactions actually taken place on January 1, 2023, 2022 and 2021 and the unaudited pro forma information does not purport to be indicative of future financial operating results (in millions, except per share data):
December 31,
202420232022
Net revenue$3,006.4 $2,912.8 $2,807.2 
Net income261.0 253.0 231.0 
Basic net income per share9.31 8.98 8.05 
Diluted net income per share9.26 8.94 8.00 
Unaudited pro forma net income reflects additional intangible asset amortization expense of $2.7 million, $5.3 million and $5.8 million for the years ended December 31, 2024, 2023 and 2022, respectively, as well as additional income tax expense of $1.5 million, $3.1 million and $2.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.