Acquisitions

9 Months Ended

Sep. 30, 2019

Acquisitions

Acquisitions

11. Acquisitions

During the nine months ended September 30, 2019 and 2018, subsidiaries of the Company acquired the assets or stock of multiple RV dealerships that constituted businesses under accounting rules. The Company used a combination of cash and floor plan financing to complete the acquisitions. The Company considers acquisitions of independent dealerships to be a fast and capital efficient alternative to opening new RV and Outdoor Retail locations to expand its business and grow its customer base. Additionally, the Company believes that its experience and scale allow it to operate these acquired dealerships more efficiently. 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 nine months ended September 30, 2019 and 2018, the Company purchased real property of $27.8 million and $100.1 million, respectively, of which $2.9 million and $23.6 million, respectively, was from parties related to the sellers of the businesses.

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

	Nine Months Ended September 30,				Estimated
($ in thousands)	2019		2018		Life
Tangible assets (liabilities) acquired (assumed):
Cash and cash equivalents	$	—	$	2,648
Contracts in transit		—		103
Accounts receivable, net		—		103
Inventory, net		19,871		40,856
Prepaid expenses and other assets		95		155
Property and equipment, net		360		818
Other assets		—		48
Accounts payable		(2)		(64)
Accounts payable and accrued liabilities		(113)		(1,440)
Other liabilities		—		(168)
Total tangible net assets acquired		20,211		43,059
Intangible assets acquired:
Trademarks and trade names		—		318		15 years
Membership and customer lists		—		766	4-7 years
Total intangible assets acquired		—		1,084
Goodwill		28,198		40,725
Purchase price		48,409		84,868
Cash and cash equivalents acquired		—		(2,648)
Cash paid for acquisitions, net of cash acquired		48,409		82,220
Inventory purchases financed via floor plan		(13,854)		(29,365)
Cash payment net of floor plan financing	$	34,555	$	52,855

The fair values above are preliminary relating to the nine months ended September 30, 2019 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 relating to the valuation of the acquired assets. The primary items that generated the goodwill are the value of the expected synergies between the acquired businesses and the Company and the acquired assembled workforce, neither of which qualify for recognition as a separately identified intangible asset. For the nine months ended September 30, 2019 and 2018, $28.2 million and $24.3 million, respectively, of the acquired goodwill is expected to be deductible for tax purposes. Included in the nine months ended September 30, 2019 and 2018 consolidated financial results were $34.2 million and $65.5 million of revenue, respectively, and $1.3 million and $3.9 million of pre-tax loss, respectively, of the acquired dealerships from the applicable acquisition dates. Pro forma information on these acquisitions has not been included, because the Company has deemed them to not be individually or cumulatively material.