Business Combinations (Tables)

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

Summary of Purchase Price

The purchase price has been determined to be as follows:

(in $000s, except share and per share data)
Common stock issued	20,100,000
Common stock per share price as of April 1, 2021	$	9.35
Fair value of common stock issued	$	187,935
Cash consideration paid to equity interest holders	790,324
Repayment of debt obligations	552,600
Total purchase price	$	1,530,859

Summary of Assets Acquired and Liabilities Assumed

The following table summarizes the April 1, 2021 fair values of the assets acquired and liabilities assumed. During the year ended December 31, 2021, the Company identified and recorded certain measurement period adjustments to the preliminary purchase price allocation, which are reflected in the table below. These adjustments were not significant and related primarily to rental equipment and current liabilities. The measurement period adjustments, coupled with the additional cash consideration discussed above, increased goodwill by approximately $15.6 million during the year ended December 31, 2021. Measurement period adjustments impacting the Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2021 were not significant. The final assessment of the fair value of the Custom Truck LP assets acquired and liabilities assumed, specifically estimates of deferred income taxes, and the final assignment of goodwill to reporting units, was not complete as of December 31, 2021. The estimated values of deferred income taxes is preliminary pending the Company’s completion of the evaluation of income tax net operating loss carryforwards for U.S. federal and state income tax purposes, which carryforwards are subject to limitations. In general, under Section 382 of the U.S. Internal Revenue Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change carryforwards to offset future taxable income.

(in $000s)
Accounts and financing receivables (a)	$	115,325
Inventory	431,648
Other current assets	13,201
Property and equipment (b)	104,721
Rental equipment	556,569
Intangible assets (c)	301,018
Operating lease assets	23,793
Other assets	18,223
Total identifiable assets acquired	1,564,498
Current liabilities	(410,276)
Long-term debt	(28,607)
Operating lease liabilities-noncurrent	(21,308)
Deferred tax and other liabilities	(31,261)
Total identifiable liabilities assumed	(491,452)
Total net assets	1,073,046
Goodwill (d)	457,813
Net assets acquired (purchase price)	$	1,530,859

a.The estimated fair value of accounts and financing receivables is $115.3 million, with the gross contractual amount being $122.4 million. The Company estimates approximately $7.0 million to be uncollectible.

b.Acquired property and equipment is primarily comprised of land, buildings and improvements with an estimated fair value of $67.9 million, and machinery, equipment and vehicles, with an estimated fair value of $31.1 million, as well as other property with an estimated fair value of $5.7 million.

c.The acquired identified intangible assets are comprised of trade names, with an estimated fair value of $151.0 million, and customer relationships, with an estimated fair value of $150.0 million. The weighted average useful lives of the trade names and the customer relationships are estimated to be 15 years and 12 years, respectively.

d.The goodwill recognized is attributable primarily to synergies and economies of scale provided by the acquired rental and new equipment sales businesses, as well as the assembled workforce of Custom Truck LP. A portion of the goodwill is expected to be deductible for income tax purposes.

Summary of Pro Forma Information

The pro forma information does not reflect any cost savings from operating efficiencies, synergies, or revenue opportunities that could result from the Acquisition.

	Year Ended December 31,
(in $000s)	2021		2020
Revenue	$	1,483,625	$	1,356,481
Net income (loss)	$	(90,521)	$	(96,415)

Summary of Pro Forma Adjustments

The following presents a summary of the pro forma adjustments that are directly attributable to the business combination:

		Year Ended December 31,
(in $000s)		2021		2020
Increase (decrease) net income/loss:
Impact of fair value mark-ups on inventory	a	$	19,186	$	(14,775)
Impact of fair value mark-ups on rental fleet depreciation	b	(3,817)		(8,643)
Intangible asset amortization and other depreciation expense	c	(3,376)		(12,964)
Transaction expenses	d	40,277		(40,277)
Interest expense and amortization of debt issuance costs	e	3,919		26,232
Loss on extinguishment of debt refinanced	f	61,695		(61,695)
Income tax expense	g	(29,471)		28,031

a.Represents adjustments to cost of revenue for the run-off of the mark-up in fair value of inventory acquired and applied to the year ended December 31, 2020.

b.Represents the adjustment for depreciation of rental fleet relating to the estimated increase in the value of the rental fleet to its fair value.

c.Represents the differential in amortization and depreciation of non-rental equipment related to the respective fair values of the assets.

d.Represents adjustments for transaction expenses that are applied to the year ended December 31, 2020.

e.Reflects the differential in interest expense, inclusive of amortization of capitalized debt issuance costs, related to our debt structure after the Acquisition as though the following had occurred on January 1, 2020: (i) borrowings under the ABL Facility; (ii) repayment of the 2019 Credit Facility; (iii) repayment of the Senior Secured Notes due 2024; (iv) repayment of the Custom Truck LP Credit Facility; and (v) the issuance of the 2029 Secured Notes.

f.Represents the adjustment of the loss on extinguishment of debt applied to the year ended December 31, 2020 as though the repayment of the 2019 Credit Facility and Senior Secured Notes due 2024 had occurred on January 1, 2020.

g.Reflects the adjustment to recognize the tax impacts of the pro forma adjustments for which a tax expense is recognized using a statutory tax rate of 25%. This rate may vary from the actual effective rate of the historical and combined businesses.