Business Acquisitions (Tables)

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [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:

	S&S Automotive
(in thousands)	May 1, 2024 Acquisition Date
Accounts receivable	$	4,100
Inventory	7,100
Other current assets	306
Property, plant and equipment	2,351
Right of use assets	7,581
Other intangible assets:
Customer relationships	30,200
Trade names	12,200
Other assets	35
Accounts payable	(1,120)
Lease liabilities	(7,604)
Accrued expenses and other liabilities	(1,989)
Goodwill	26,892
Total purchase consideration exchanged, net of cash acquired	$	80,052
Cash consideration	$	78,659
Deferred consideration(1)	1,393
Total purchase consideration exchanged, net of cash acquired	$	80,052

(1)    The Company paid $0.7 million of the S&S Automotive deferred consideration during the three and six months ended June 30, 2024.

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		Measurement Period Adjustments		Adjusted Total
Accounts receivable	$	1,363	$	—	$	1,363
Inventory	1,399		—		1,399
Other current assets	10		—		10
Property, plant and equipment	228		—		228
Right of use assets	550		—		550
Other intangible assets:
Customer relationships	2,700		100		2,800
Trade names	1,400		—		1,400
Other assets	11		—		11
Accounts payable	(205)		—		(205)
Lease liabilities	(550)		—		(550)
Accrued expenses and other liabilities	(25)		—		(25)
Goodwill	2,973		(100)		2,873
Total purchase consideration exchanged, net of cash acquired	$	9,854	$	—	$	9,854
Cash consideration	$	8,904	$	—	$	8,904
Deferred consideration	950		—		950
Total purchase consideration exchanged, net of cash acquired	$	9,854	$	—	$	9,854

The following table summarizes the 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		122		49,840
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,269)	$	267,156
Cash consideration	$	252,007	$	—	$	252,007
Deferred consideration(2)	12,418		2,631		15,049
Contingent consideration	6,000		(5,900)		100
Total purchase consideration exchanged, net of cash acquired	$	270,425	$	(3,269)	$	267,156

(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 $3.0 million and $7.2 million of the Hisco deferred consideration during the three and six months ended June 30, 2024, respectively and $7.8 million during 2023. As of June 30, 2024, there is no deferred consideration remaining.

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 acquisitions completed during 2024 and January 1, 2022 for the acquisition 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 June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue	$	443,067	$	469,269	$	869,217	$	935,205
Net income	$	191	$	4,233	$	(5,476)	$	6,606

The following table presents actual results attributable to our acquisitions that were included in the unaudited condensed consolidated financial statements for the second quarter and first six 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,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Revenue	$	10,112	$	28,001	$	12,401	$	28,001
Net Income	$	(467)	$	(865)	$	(411)	$	(865)