Acquisitions

6 Months Ended

Jun. 30, 2023

Acquisitions

Acquisitions

12. Acquisitions

During the six months ended June 30, 2023 and 2022, subsidiaries of the Company acquired the assets of multiple RV dealerships, as well as an outdoor publication during the three months ended June 30, 2022, that constituted businesses under GAAP. The Company used cash and borrowings under its Floor Plan Facility to complete the acquisitions. The Company considers acquisitions of independent dealerships to be a fast and capital efficient alternative to opening new RV dealership locations to expand its business and grow its customer base. Additionally, the Company considered the 2022 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 six months ended June 30, 2023, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of eight locations for an aggregate purchase price of approximately $74.4 million. Separate from these acquisitions, during the six months ended June 30, 2023, the Company purchased real property of $42.2 million, of which $5.2 million was paid through the assumption of the related promissory note (see Note 7 — Long-Term Debt — Other Long-Term Debt).

During the six months ended June 30, 2022, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of two locations for an aggregate purchase price of approximately $34.8 million. Also, during the six months ended June 30, 2022, the Good Sam Services and Plans segment acquired the assets of the outdoor publication for $3.4 million. Separate from these acquisitions, during the six months ended June 30, 2022, the Company purchased real property for $28.0 million.

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

	Six Months Ended June 30,
($ in thousands)	2023		2022
Tangible assets (liabilities) acquired (assumed):
Accounts receivable, net	$	—	$	(68)
Inventories, net		40,391		11,775
Prepaid expenses and other assets		144		13
Property and equipment, net		746		70
Operating lease assets		916		—
Accrued liabilities		—		67
Current portion of operating lease liabilities		(208)		—
Other current liabilities		(188)		49
Operating lease liabilities, net of current portion		(708)		—
Total tangible net assets acquired		41,093		11,906
Total intangible assets acquired		—		2,632
Goodwill		33,321		23,650
Cash paid for acquisitions, net of cash acquired		74,414		38,188
Inventory purchases financed via floor plan		(31,188)		(5,876)
Cash payment net of floor plan financing	$	43,226	$	32,312

For the six months ended June 30, 2023, the fair values above include measurement period adjustments for valuation of acquired inventories relating to dealership acquisitions during the year ended December 31, 2022. The measurement period relating to dealership acquisitions is typically open for twelve months from the acquisition date, primarily for refining the estimate of the fair value of acquired vehicle inventories.

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 six months ended June 30, 2023 and 2022, acquired goodwill of $33.3 million and $23.7 million, respectively, was expected to be deductible for tax purposes. For the six months ended June 30, 2022, the Good Sam Services and Plans segment acquisition of the outdoor publication resulted in the recognition of intangible assets for trademarks and trade names of $2.1 million and other intangible assets of $0.5 million with estimated useful lives of 15 years and 3 years, respectively.

Included in the condensed consolidated financial statements for the six months ended June 30, 2023 and 2022 were revenue of $12.8 million and $21.7 million, respectively, and pre-tax loss of $1.1 million and pre-tax income of $1.4 million, respectively, from 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.