Acquisitions

3 Months Ended

Mar. 31, 2024

Acquisitions

Acquisitions

12. Acquisitions

During the three months ended March 31, 2024 and 2023, subsidiaries of the Company acquired the assets of multiple RV dealerships 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 store locations to expand its business and grow its customer base. 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 three months ended March 31, 2024, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of nine locations for an aggregate purchase price of approximately $67.7 million, of which one RV dealerships had not opened by March 31, 2024. Separate from these acquisitions, during the three months ended March 31, 2024, the Company purchased real property for an aggregate purchase price of $1.2 million.

During the three months ended March 31, 2023, the RV and Outdoor Retail segment did not acquire any RV dealerships.

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:

	Three Months Ended March 31,
($ in thousands)	2024		2023
Tangible assets (liabilities) acquired (assumed):
Inventories, net		40,394		(122)
Property and equipment, net		287		—
Operating lease assets		15,328		—
Accrued liabilities		(40)		—
Current portion of operating lease liabilities		(1,112)		—
Other current liabilities		(21)		—
Operating lease liabilities, net of current portion		(14,216)		—
Total tangible net assets acquired		40,620		(122)
Total intangible assets acquired		2,595		—
Goodwill		24,458		122
Purchase price of acquisitions		67,673		—
Application of deposit paid in prior period		(8,873)		—
Cash paid for acquisitions, net of cash acquired		58,800		—
Inventory purchases financed via floor plan		(48,684)		—
Cash payment net of floor plan financing	$	10,116	$	—

The fair values above for the three months ended March 31, 2024 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 three months ended March 31, 2024, the fair values include a measurement period adjustment to record $2.6 million of other intangible assets from a RV dealership acquisition that occurred during the year ended December 31, 2023. These intangible assets had an estimated useful life of 15 years; however, these intangible assets were sold for $2.6 million during the three months ended March 31, 2024. For the three months ended March 31, 2023, the fair values represent measurement period adjustments for valuation of acquired inventories relating to dealership acquisitions during the year ended December 31, 2022.

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 three months ended March 31, 2024 and 2023, acquired goodwill of $24.5 million and $0.1 million, respectively, was expected to be deductible for tax purposes.

Included in the condensed consolidated financial statements for the three months ended March 31, 2024 was revenue of $7.0 million and insignificant pre-tax income from the acquired dealerships from the applicable acquisition dates. Included in the condensed consolidated financial statements for the three months ended March 31, 2023 was no revenue or pre-tax income from acquired dealerships. Pro forma information on these acquisitions has not been included, because the Company has deemed them to not be individually or cumulatively material.