Acquisitions

12 Months Ended

Dec. 31, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions

NOTE 3. ACQUISITIONS

The Company has completed a number of acquisitions that have been accounted for as a business combination and resulted in the recognition of goodwill in its financial statements. This goodwill arises because the purchase price for each acquired business reflects a number of factors including the complementary fit, the acceleration of its strategy, the synergies the business brings to existing operations, the future earnings and cash flow potential of the business, the potential to add other strategically complementary acquisitions to the acquired business, the scarce or unique nature of the business in its markets, the competition to acquire the business, the valuation of similar businesses in the marketplace (as reflected in a multiple of revenues, earnings or cash flows) and the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing offerings to key target markets and develop new and profitable businesses.

A preliminary purchase price allocation is made at the date of acquisition based on an initial understanding of the fair value of the consideration transferred, acquired assets and assumed liabilities. As additional information about these assets and liabilities is obtained, the estimates of fair value are refined and the preliminary purchase price allocation is adjusted during the applicable measurement period for items identified as of the acquisition date.

To determine the fair value of the acquired intangible assets, management utilized significant unobservable inputs (Level 3 in the fair value hierarchy) and was required to make judgments and estimates about future results such as revenues, margin, net working capital and other valuation assumptions such as useful lives, royalty rates, technology obsolescence, attrition rates and discount rates. Intangible assets consisting of technology and trade names were valued using a relief from royalty method or using a multi-period excess earnings method while customer relationships were valued using a multi-period excess earnings method. These assumptions are forward-looking and could be affected by future economic and market conditions.

The Company records contingent consideration liabilities related to potential payments to previous owners of acquired companies contingent on the achievement of certain revenue targets. The Company records a liability for contingent consideration in the purchase price for acquisitions at fair value on the acquisition date, and remeasures the liability at each reporting date, based on the Company’s estimate of the expected probability of achievement of the contingency targets.

Acquisition-related costs are included in Selling, general and administrative expenses in the Consolidated Statements of Earnings and Comprehensive Income.

The following describes the Company’s acquisition activity during the year ended December 31, 2025. The Company did not make any acquisitions during the years ended December 31, 2024 and 2023.

2025 Acquisition

On June 9, 2025, the Company acquired substantially all of the assets of Sergeant Sudz LLC (“Sergeant Sudz”), a provider of next-generation tunnel automation and smart motor control center technology for tunnel car wash operators in the United States, for $13.1 million. The preliminary purchase price allocation includes contingent consideration initially measured at $2.3 million, which can reach up to $3.0 million based on achieving certain revenue targets.

Acquisition-related costs related to the Sergeant Sudz acquisition were not material. The Company has not disclosed post-acquisition or pro forma revenue and earnings attributable to Sergeant Sudz as it did not have a material effect on the Company’s results. Sergeant Sudz is presented in the Company’s Mobility Technologies segment.