Acquisitions

9 Months Ended

Sep. 30, 2022

Acquisitions

Acquisitions

11. Acquisitions

During the nine months ended September 30, 2022 and 2021, subsidiaries of the Company acquired the assets of multiple RV dealerships, as well as an outdoor publication during the nine months ended September 30, 2022, that constituted businesses under accounting rules. The Company used cash to complete the acquisitions. The Company considers acquisitions of independent dealerships to be a fast and capital efficient alternative to opening new retail locations to expand its business and grow its customer base. Additionally, the Company considers the acquisition of the outdoor publication as a furtherance of its strategy to target a younger demographic of RV enthusiasts. 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.

During the nine months ended September 30, 2022, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of five locations for an aggregate purchase price of approximately $79.8 million. Additionally, during the nine months ended September 30, 2022, the Company purchased real estate property for $41.7 million, of which $19.7 million related to the sellers of the acquired businesses. Also, during the nine months ended September 30, 2022, the Good Sam Services and Plans segment acquired the assets of the outdoor publication for $3.4 million.

During the nine months ended September 30, 2021, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of twelve locations for an aggregate purchase price of approximately $99.7 million. Additionally, during the nine months ended September 30, 2021, the Company purchased real estate property for $61.1 million, of which $31.4 million related to the sellers of the acquired businesses.

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions discussed above consist of the following, net of measurement period adjustments relating to acquisitions from the respective previous year:

	Nine Months Ended September 30,
($ in thousands)	2022		2021
Tangible assets (liabilities) acquired (assumed):
Accounts receivable, net	$	(68)	$	615
Inventories, net		30,828		27,386
Prepaid expenses and other assets		48		126
Property and equipment, net		206		1,348
Operating lease assets		739		1,222
Customer deposits		(77)		(1,437)
Accrued liabilities		75		1,281
Current portion of operating lease liabilities		(235)		(195)
Operating lease liabilities, net of current portion		(504)		(1,027)
Total tangible net assets acquired		31,012		29,319
Total intangible assets acquired		2,632		—
Goodwill		49,583		70,430
Cash paid for acquisitions, net of cash acquired		83,227		99,749
Inventory purchases financed via floor plan		(19,971)		(19,537)
Cash payment net of floor plan financing	$	63,256	$	80,212

The fair values above for the nine months ended September 30, 2022 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 relating to the valuation of the acquired assets, primarily the acquired inventories. For the nine months ended September 30, 2022, the fair values above include measurement period adjustments for valuation of acquired inventories, accounts receivable, accrued liabilities, and other current liabilities relating to dealership acquisitions during the year ended December 31, 2021. For the nine months ended September 30, 2021, the fair values above include measurement period adjustments for valuation of acquired inventories, property and equipment, and accrued liabilities relating to dealership acquisitions during the year ended December 31, 2020.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, 2022 and 2021, acquired goodwill of $49.6 million and $70.4 million, respectively, is expected to be deductible for tax purposes. Included in the condensed consolidated financial statements for the nine months ended September 30, 2022 were $39.4 million of revenue, and $1.4 million of pre-tax income, respectively from the acquisitions as of their applicable acquisition dates. Included in the condensed consolidated financial statements for the nine months ended September 30, 2021 were $100.6 million of revenue, and $10.8 million of pre-tax income, 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.

In October 2022, the RV and Outdoor Retail segment acquired the assets of a consortium of five RV dealerships and one RV service center. The reasons for this acquisition and the primary items generating the goodwill are consistent with the previous RV dealership acquisitions discussed above.