9. Acquisitions

Dealerships and Consumer Shows

During the six months ended June 30, 2017 and 2016, subsidiaries of the Company acquired the assets of multiple dealership locations and consumer shows. The Company used a combination of cash, floor plan financing, and additional borrowing on the Existing Term Loan Facility in March 2017 (see Note 4 — Long-term Debt) to complete the acquisitions. The acquired businesses were recorded at their estimated fair values under the acquisition method of accounting. The balance of the purchase prices in excess of the fair values of net assets acquired were recorded as goodwill.

For the six months ended June 30, 2017, concurrent with the acquisition of dealership businesses, the Company purchased real properties for $11.1 million from related parties of the sellers and sold a real property to a third party in a sale-leaseback transaction for $6.0 million. For the six months ended June 30, 2016, concurrent with the acquisition of dealership businesses, the Company purchased real properties for $10.4 million from related parties of the sellers. For the six months ended June 30, 2016, the Company sold other real properties to a third party in sale-leaseback transactions for $2.8 million.

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions of dealerships and consumer shows consist of the following:


	Six Months Ended June 30,				Estimated
($ in thousands)	2017		2016		Life
Tangible assets (liabilities) acquired (assumed):
Accounts receivable	$	1,522	$	944
Inventory		84,211		25,663
Property and equipment		792		635
Other assets		46		142
Accrued liabilities		(2,872)		(2,277)
Total tangible net assets acquired		83,699		25,107
Intangible assets acquired:
Membership and customer lists		793		1,349	4-7 years
Total intangible assets acquired		793		1,349
Goodwill		132,119		33,795
Purchase price		216,611		60,251
Inventory purchases financed via floor plan		(71,124)		(22,265)
Cash payment net of floor plan financing	$	145,487	$	37,986

The fair values above are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date. All of the acquired goodwill was deductible for tax purposes for the six months ended June 30, 2017 and 2016. Included in the six months ended June 30, 2017 and 2016 consolidated financial results were $117.7 million and $48.0 million of revenue, respectively, and $7.8 million and $1.3 million of pre-tax income, respectively, of the acquired dealerships from the applicable acquisition dates.

Gander Mountain and Overton’s

On May 26, 2017, CWI, Inc. (“CWI”), an indirect subsidiary of the Company, completed the acquisition of certain assets of the Gander Mountain Company (“Gander Mountain”) and its Overton’s, Inc. (“Overton’s”) boating business through a bankruptcy auction that took place in April 2017 for $35.4 million in cash and $1.0 million of contingent consideration. Prior to the acquisition, Gander Mountain operated 160 retail locations and an ecommerce business that serviced the hunting, camping, fishing, shooting sports, and outdoor markets. Overton’s operates two retail locations and an ecommerce business that services the marine and watersports markets. The Company believes these businesses are complementary to its existing businesses and will allow for cross marketing of the Company’s consumer services and plans to a wider customer base.

The assets acquired include the right to designate any real estate leases for assignment to CWI or other third parties (the “Designation Rights”), other agreements CWI elects to assume, intellectual property rights, operating systems and platforms, certain distribution center equipment, the Gander Mountain and Overton’s ecommerce businesses and fixtures and equipment for Overton’s two retail locations and corporate operations. Furthermore, CWI has committed to exercise Designation Rights and take an assignment of no fewer than 15 Gander Mountain retail leases on or before October 6, 2017, in addition to the two Overton’s retail leases assumed at the closing of the acquisition. The Designation Rights expire on October 6, 2017. CWI also assumed certain liabilities, such as cure costs for leases and other agreements it elects to assume, accrued time off for employees retained by CWI and retention bonuses payable to certain key Gander Mountain employees retained by CWI. The cure costs for the minimum 15 Gander Mountain leases to be assumed under the Designation Rights after the acquisition date, but no later than October 6, 2017, have been estimated at $1.0 million and recorded as contingent consideration.

The estimated fair values of the assets acquired and liabilities assumed for the acquisition of Gander Mountain and Overton’s consist of the following:


	Estimated		Estimated
($ in thousands)	Fair Value		Life
Tangible assets (liabilities) acquired (assumed):
Inventory	$	9,965
Prepaid expenses and other assets		42
Property and equipment		3,780
Accrued liabilities		(373)
Total tangible net assets acquired		13,414
Intangible assets acquired:
Trademarks and trade names		17,900	15 years
Membership and customer lists		500	6 years
Total intangible assets acquired		18,400
Goodwill		4,660
Purchase price		36,474
Contingent consideration unpaid at June 30, 2017		(1,025)
Cash paid for acquisition	$	35,449

The fair values above are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date. The amount of acquired goodwill that was deductible for tax purposes was $4.7 million. Included in the six months ended June 30, 2017 consolidated financial results were $8.4 million of revenue and $1.6 million of pre-tax loss of Gander Mountain and Overton’s from the applicable acquisition dates.