ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisitions in 2017

SessaKlein S.p.A.

In February 2017, the Company acquired 100 percent of the outstanding shares of Sessa Klein S.p.A. (“SessaKlein”), a manufacturer of highly engineered side window systems for both high speed and commuter trains, located near Varese, Italy. The purchase price was $8.5 million paid at closing, plus contingent consideration based on future sales by this operation. The Company is unable to make all the disclosures required by ASC 805-10-50-2 at this time as the initial accounting and pro forma analysis for this business combination is incomplete.

Acquisitions in 2016

Camping Connection

In November 2016, the Company acquired the service centers and related business of Camping Connection, Inc., an RV repair and service provider located in Myrtle Beach, South Carolina and Kissimmee, Florida. The purchase price was $2.0 million paid at closing.

Atwood Seating and Chassis Components

In November 2016, the Company acquired the business, manufacturing facility and certain assets of the seating and chassis components business of Atwood Mobile Products, LLC (“Atwood”), a subsidiary of Dometic Group, located in Elkhart, Indiana. The purchase price was $12.5 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The Company is validating account balances and finalizing the valuation for the acquisition. The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):



Cash consideration	$	12,463

Customer relationships	$	2,116
Net other assets	10,347
Total fair value of net assets acquired	$	12,463

The customer relationships intangible asset is being amortized over its preliminary estimated useful life of 15 years.

Project 2000 S.r.l.

In May 2016, the Company acquired 100 percent of the equity interest of Project 2000 S.r.l. (“Project 2000”), a manufacturer of innovative, space-saving bed lifts and retractable steps, located near Florence, Italy. The purchase price was $18.8 million paid at closing, plus contingent consideration based on future sales by this operation. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The Company is validating account balances and finalizing the valuation for the acquisition.

The acquisition of this business was preliminarily recorded on the acquisition date as follows (in thousands):



Cash consideration net of cash acquired	$	16,137
Contingent consideration	1,322
Total fair value of consideration given	$	17,459

Customer relationships	$	9,694
Other identifiable intangible assets	5,193
Net other assets	128
Total fair value of net assets acquired	$	15,015

Goodwill (not tax deductible)	$	2,444

The customer relationships intangible asset is being amortized over its preliminary estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Flair Interiors

In February 2016, the Company acquired the business and certain assets of Flair Interiors, Inc. (“Flair”), a manufacturer of RV furniture located in Goshen, Indiana. The purchase price was $8.1 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	8,100

Customer relationships	$	3,700
Net other assets	2,378
Total fair value of net assets acquired	$	6,078

Goodwill (tax deductible)	$	2,022

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Highwater Marine Furniture

In January 2016, the Company acquired the business and certain assets of the pontoon furniture manufacturing operation of Highwater Marine, LLC (“Highwater”), a leading manufacturer of pontoon and other recreational boats located in Elkhart, Indiana. The purchase price was $10.0 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	10,000

Customer relationships	$	8,100
Net tangible assets	1,307
Total fair value of net assets acquired	$	9,407

Goodwill (tax deductible)	$	593

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and manufacturing capacity with respect to these product lines.

Acquisitions in 2015

Signature Seating

In August 2015, the Company acquired the business and certain assets of Roehm Marine, LLC, also known as Signature Seating (“Signature”), a manufacturer of furniture solutions for fresh water boat manufacturers, primarily pontoon boats. The purchase price was $16.0 million paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	16,000
Contingent consideration	3,556
Total fair value of consideration given	$	19,556

Customer relationships	$	7,500
Net other assets	4,023
Total fair value of net assets acquired	$	11,523

Goodwill (tax deductible)	$	8,033

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and manufacturing capacity with respect to these product lines, and also believes the diversified customer base will further its expansion into adjacent industries.

Spectal Industries

In April 2015, the Company acquired the business and certain assets of Industries Spectal, Inc. (“Spectal”), a Quebec, Canada-based manufacturer of windows and doors primarily for school buses, as well as commercial buses, emergency vehicles, trucks, agricultural equipment and RVs. The purchase price was $22.3 million paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	22,335
Contingent consideration	1,211
Total fair value of consideration given	$	23,546

Customer relationships	$	10,100
Net other assets	4,381
Total fair value of net assets acquired	$	14,481

Goodwill (tax deductible)	$	9,065

The customer relationships intangible asset is being amortized over its estimated useful life of 15 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and manufacturing capacity with respect to these product lines, and also believes the diversified customer base will further its expansion into adjacent industries.

EA Technologies

In January 2015, the Company acquired the business and certain assets of EA Technologies, LLC (“EA Technologies”), a manufacturer of custom steel and aluminum parts and provider of electro-deposition (‘e-coat’) and powder coating services for RV, bus, medium-duty truck, automotive, recreational marine, specialty and utility trailer, and military applications. The purchase price was $9.2 million, of which $6.6 million was paid in the fourth quarter of 2014, with the balance paid at closing. The results of the acquired business have been included in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	9,248

Identifiable intangible assets	$	480
Net tangible assets	8,868
Total fair value of net assets acquired	$	9,348

Gain on bargain purchase	$	100

Acquisitions in 2014

Duncan Systems

In August 2014, the Company acquired the business and certain assets of Duncan Systems, Inc. (“Duncan Systems”), an aftermarket distributor of replacement motorhome windshields, awnings, and RV, heavy truck and specialty vehicle glass and windows, primarily to fulfill insurance claims. The purchase price was $18.0 million paid at closing, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included in the Company’s Aftermarket Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	18,000
Contingent consideration	1,914
Total fair value of consideration given	$	19,914

Customer relationships	$	10,500
Net other assets	5,000
Total fair value of net assets acquired	$	15,500

Goodwill (tax deductible)	$	4,414

The customer relationships intangible asset is being amortized over its estimated useful life of 14 years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in market share for the distributed products.

Power Gear and Kwikee Brands

In June 2014, the Company acquired the RV business of Actuant Corporation, which manufactures leveling systems, slide-out mechanisms and steps, primarily for motorhome RVs, under the Power Gear and Kwikee brands. The purchase price was $35.5 million, paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date.

The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	35,500

Customer relationships	$	12,300
Patents	5,300
Other identifiable intangible assets	2,130
Net tangible assets	2,227
Total fair value of net assets acquired	$	21,957

Goodwill (tax deductible)	$	13,543

The customer relationships intangible asset is being amortized over its estimated useful life of 14 years and the patents are being amortized over their estimated useful life of eight years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates the attainment of synergies and an increase in the markets for the acquired products.

Star Design

In March 2014, the Company acquired the business and certain assets of Star Design, LLC (“Star Design”).The purchase price was $12.2 million paid at closing. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date. The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	12,232

Customer relationships	$	4,400
Net other assets	2,718
Total fair value of net assets acquired	$	7,118

Goodwill (tax deductible)	$	5,114

The customer relationships intangible asset is being amortized over its estimated useful life of 14 years. The consideration given was greater than the fair value of the net assets acquired, resulting in goodwill, because the Company anticipates leveraging its existing experience and manufacturing capacity with respect to these product lines, and also believes the diversified customer base will further its expansion into adjacent industries.

Innovative Design Solutions

In February 2014, the Company acquired Innovative Design Solutions, Inc. (“IDS”), a designer, developer and manufacturer of electronic systems encompassing a wide variety of RV applications. IDS also manufactures electronic systems for automotive, medical and industrial applications. The purchase price was $35.9 million, of which $34.2 million was paid at closing, with the balance to be paid out annually over the subsequent three years, plus contingent consideration based on future sales of this operation. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Consolidated Statements of Income since the acquisition date.

The acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration	$	34,175
Present value of future payments	1,739
Contingent consideration	710
Total fair value of consideration given	$	36,624

Patents	$	6,000
Customer relationships	4,000
Other identifiable intangible assets	3,180
Net tangible assets	1,894
Total fair value of net assets acquired	$	15,074

Goodwill (tax deductible)	$	21,550

The patents are being amortized over their estimated useful life of 10 years and the customer relationships intangible asset is being amortized over its estimated useful life of 12 years. The consideration given was greater than the fair value of the assets acquired, resulting in goodwill, because the Company anticipates an increase in the markets for the acquired products, market share growth in both existing and new markets, as well as attainment of synergies.

Goodwill

Goodwill by reportable segment was as follows:



(In thousands)	OEM Segment			Aftermarket Segment		Total
Net balance – December 31, 2014	$	52,815		$	13,706	$	66,521
Acquisitions – 2015	17,007			91		17,098
Net balance – December 31, 2015	69,822			13,797		83,619
Acquisitions – 2016	5,059			738		5,797
Other	(218		)	—		(218		)
Net balance – December 31, 2016	$	74,663		$	14,535	$	89,198

The Company performed its annual goodwill impairment procedures for all of its reporting units as of November 30, 2016, 2015 and 2014, and concluded no goodwill impairment existed at that time. The Company plans to update its review as of November 30, 2017, or sooner if events occur or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. In conjunction with the Company’s change in reportable segments during the second quarter of 2016 (see Note 14), goodwill was reassigned to reporting units using a relative fair value allocation. In addition, the Company completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed. The goodwill balance includes $50.5 million of accumulated impairment, which occurred prior to December 31, 2014.

Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the above table.

Other Intangible Assets

Other intangible assets, by segment, consisted of the following at December 31:



(In thousands)	2016		2015
OEM Segment	$	97,689	$	84,752
Aftermarket Segment	15,254		16,183
Other intangible assets	$	112,943	$	100,935

Other intangible assets consisted of the following at December 31, 2016:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	110,784	$	32,414	$	78,370	6	to	16
Patents	56,468		34,066		22,402		3	to	19
Tradenames	10,041		5,667		4,374		3	to	15
Non-compete agreements	5,852		2,975		2,877		3	to	6
Other	309		76		233		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	188,141	$	75,198	$	112,943

Other intangible assets consisted of the following at December 31, 2015:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	94,560	$	30,514	$	64,046	6	to	16
Patents	54,293		28,255		26,038		3	to	19
Tradenames	8,935		4,751		4,184		3	to	15
Non-compete agreements	4,493		2,800		1,693		3	to	6
Other	594		307		287		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	167,562	$	66,627	$	100,935

Amortization expense related to other intangible assets was as follows for the years ended December 31:



(In thousands)	2016		2015		2014
Cost of sales	$	5,967	$	6,017	$	5,092
Selling, general and administrative	11,791		10,038		7,612
Amortization expense	$	17,758	$	16,055	$	12,704

Estimated amortization expense for other intangible assets for the next five years is as follows:



(In thousands)	2017		2018		2019		2020		2021
Cost of sales	$	5,809	$	4,973	$	4,330	$	3,283	$	2,743
Selling, general and administrative	10,989		10,405		9,362		8,060		7,466
Amortization expense	$	16,798	$	15,378	$	13,692	$	11,343	$	10,209