Business Acquisitions (Tables)

3 Months Ended

Mar. 31, 2024

Business Combination and Asset Acquisition [Abstract]

Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed, including the allocation to other intangible assets acquired:

	Emergent Safety Supply
(in thousands)	January 19, 2024 Acquisition Date
Accounts receivable(1)	$	1,363
Inventory	1,399
Other current assets	10
Property, plant and equipment	228
Right of use assets	550
Other intangible assets:
Customer relationships	2,700
Trade names	1,400
Other assets	11
Accounts payable	(205)
Lease liabilities	(550)
Accrued expenses and other liabilities	(25)
Goodwill	2,973
Total purchase consideration exchanged, net of cash acquired	$	9,854
Cash consideration	$	8,904
Deferred consideration	950
Total purchase consideration exchanged, net of cash acquired	$	9,854

(1)    Accounts receivable had an estimated fair value of $1.4 million and a gross contractual value of $1.4 million. The difference represents the Company’s best estimate of the contractual cash flows that will not be collected.

The following table summarizes the preliminary allocation of consideration exchanged to the estimated fair values of assets acquired and liabilities assumed, including the allocation to other intangible assets acquired:

	Hisco
(in thousands)	June 8, 2023 Acquisition Date		Measurement Period Adjustments		Adjusted Total
Accounts receivable(1)	$	66,792	$	(2,269)	$	64,523
Inventory	61,300		(645)		60,655
Other current assets	3,858		350		4,208
Property, plant and equipment	48,326		—		48,326
Right of use assets	21,102		1,188		22,290
Other intangible assets:
Customer relationships	41,800		(1,800)		40,000
Trade names	25,600		(300)		25,300
Deferred tax liability, net of deferred tax asset	(2,544)		81		(2,463)
Other assets	2,495		—		2,495
Accounts payable	(16,689)		—		(16,689)
Lease liabilities	(22,372)		293		(22,079)
Accrued expenses and other liabilities	(8,961)		(289)		(9,250)
Goodwill	49,718		232		49,950
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,159)	$	267,266
Cash consideration	$	252,007	$	—	$	252,007
Deferred consideration(2)	12,418		2,741		15,159
Contingent consideration	6,000		(5,900)		100
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,159)	$	267,266

(1)    Accounts receivable had an estimated fair value of $64.5 million and a gross contractual value of $66.8 million. The difference represents the Company’s best estimate of the contractual cash flows that will not be collected.

(2)    The Company paid $4.2 million of the Hisco deferred consideration during the three months ended March 31, 2024.

Schedule of Unaudited Pro Forma Information and Actual Results of Business Acquisitions

The following table presents estimated unaudited pro forma consolidated financial information for DSG as if the acquisitions disclosed above occurred on January 1, 2023 for the acquisition completed during 2024 and January 1, 2022 for the acquisitions completed during 2023. The unaudited pro forma information reflects adjustments including amortization on acquired intangible assets, interest expense, and the related tax effects. This information is presented for informational purposes only and is not necessarily indicative of future results or the results that would have occurred had the acquisitions been completed on the date indicated.

	Three Months Ended March 31,
(in thousands)	2024		2023
Revenue	$	416,527	$	456,045
Net income	$	(5,131)	$	13,868

The following table presents actual results attributable to our acquisitions that were included in the unaudited condensed consolidated financial statements for the first three months of 2024 and 2023. The results for these acquisitions are only included subsequent to their respective acquisition dates provided above.

	Three Months Ended March 31,
(in thousands)	2024		2023
Revenue	$	2,288	$	—
Net Income	$	67	$	—