Acquisitions, Goodwill And Other Intangible Assets

9 Months Ended

Sep. 30, 2018

Acquisitions, Goodwill And Other Intangible Assets [Abstract]

ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisitions During the Nine Months Ended September 30, 2018

ST.LA. S.r.l.

In June 2018, the Company acquired 100 percent of the equity interests of ST.LA. S.r.l., (“STLA”), a manufacturer of bed lifts and other RV components for the European caravan market, headquartered in Pontedera, Italy. The preliminary purchase price was $14.8 million, net of cash acquired, paid at closing, and is subject to potential post-closing adjustments related to net working capital. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed 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	$	14,845

Customer relationships and other identifiable intangible assets	$	7,000
Net tangible assets	2,280
Total fair value of net assets acquired	$	9,280

Goodwill (not tax deductible)	$	5,565

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.

Hehr

In February 2018, the Company acquired substantially all of the business assets of Hehr International Inc. (“Hehr”), a manufacturer of windows and tempered and laminated glass for the RV, transit, specialty vehicle and other adjacent industries, headquartered in Los Angeles, California. The purchase price was $51.5 million paid at closing and subsequently for post-closing adjustments related to net working capital. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed 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	$	51,460

Customer relationships and other identifiable intangible assets	$	21,500
Net tangible assets	13,020
Total fair value of net assets acquired	$	34,520

Goodwill (tax deductible)	$	16,940

The customer relationships intangible asset is being amortized over its estimated useful life of 13 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.

Taylor Made

In January 2018, the Company acquired 100 percent of the equity interests of Taylor Made Group, LLC (“Taylor Made”), a marine supplier to boat builders and the aftermarket, as well as a key supplier to a host of other industrial end markets, headquartered in Gloversville, New York. The purchase price was $90.4 million, net of cash acquired, paid at closing and subsequently for post-closing adjustments related to net working capital. The results of the acquired business have been included primarily in the Company’s OEM Segment and in the Condensed 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	$	90,396

Customer relationships	$	25,000
Other identifiable intangible assets	7,000
Net tangible assets	42,133
Total fair value of net assets acquired	$	74,133

Goodwill (tax deductible)	$	16,263

Acquisitions During the Nine Months Ended September 30, 2017

Metallarte S.r.l.

In June 2017, the Company acquired 100 percent of the equity interests of Metallarte S.r.l. (“Metallarte”), a manufacturer of entry and compartment doors for the European caravan market located near Siena, Italy, and its subsidiary, RV Doors, S.r.l., a manufacturer of driver-side doors located near Venice, Italy. The purchase price was $14.1 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 acquisition of this business was recorded on the acquisition date as follows (in thousands):



Cash consideration, net of cash acquired	$	13,501
Contingent consideration	2,366
Total fair value of consideration given	$	15,867

Customer relationships	$	7,311
Other identifiable intangible assets	1,942
Net other liabilities	(327		)
Total fair value of net assets acquired	$	8,926

Goodwill (not tax deductible)	$	6,941

Lexington

In May 2017, the Company acquired the business and certain assets of Lexington LLC (“Lexington”), a manufacturer of high quality seating solutions for the marine, RV, transportation, medical and office furniture industries located in Elkhart, Indiana. The purchase price was $40.1 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	$	40,062

Customer relationships	$	16,900
Other identifiable intangible assets	1,820
Net tangible assets	4,928
Total fair value of net assets acquired	$	23,648

Goodwill (tax deductible)	$	16,414

Sessa Klein S.p.A.

In February 2017, the Company acquired 100 percent of the outstanding shares of Sessa Klein S.p.A. (“Sessa Klein”), a manufacturer of highly engineered side window systems for both high speed and commuter trains, located near Varese, Italy. The purchase price was $6.5 million paid at closing, net of cash acquired, 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 Condensed 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, net of cash acquired	$	6,502
Contingent consideration	3,838
Total fair value of consideration given	$	10,340

Identifiable intangible assets	$	2,286
Net tangible assets	364
Total fair value of net assets acquired	$	2,650

Goodwill (not tax deductible)	$	7,690

Goodwill

Goodwill by reportable segment was as follows:



(In thousands)	OEM Segment		Aftermarket Segment		Total
Net balance – December 31, 2017	$	109,641	$	14,542	$	124,183
Acquisitions – 2018	34,669		4,099		38,768
Other	260		—		260
Net balance – September 30, 2018	$	144,570	$	18,641	$	163,211

Goodwill represents the excess of the total consideration given in an acquisition of a business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested at the reporting unit level for impairment annually in November, or more frequently if certain circumstances indicate a possible impairment may exist.

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 consisted of the following at September 30, 2018:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	187,804	$	52,204	$	135,600	6	to	16
Patents	55,858		38,451		17,407		3	to	19
Trade names	15,922		5,828		10,094		3	to	15
Non-compete agreements	7,650		3,890		3,760		3	to	6
Other	309		133		176		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	272,230	$	100,506	$	171,724

Other intangible assets consisted of the following at September 30, 2017:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	138,941	$	39,792	$	99,149	6	to	16
Patents	57,416		37,277		20,139		3	to	19
Trade names	10,416		4,708		5,708		3	to	15
Non-compete agreements	8,479		3,609		4,870		3	to	6
Other	309		101		208		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	220,248	$	85,487	$	134,761

Other intangible assets consisted of the following at December 31, 2017:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	138,687	$	42,276	$	96,411	6	to	16
Patents	57,576		38,764		18,812		3	to	19
Trade names	10,995		5,381		5,614		3	to	15
Non-compete agreements	8,536		4,128		4,408		3	to	6
Other	309		109		200		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	220,790	$	90,658	$	130,132

Acquisitions

ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Acquisitions During the Nine Months Ended September 30, 2018

ST.LA. S.r.l.



Cash consideration, net of cash acquired	$	14,845

Customer relationships and other identifiable intangible assets	$	7,000
Net tangible assets	2,280
Total fair value of net assets acquired	$	9,280

Goodwill (not tax deductible)	$	5,565

Hehr



Cash consideration	$	51,460

Customer relationships and other identifiable intangible assets	$	21,500
Net tangible assets	13,020
Total fair value of net assets acquired	$	34,520

Goodwill (tax deductible)	$	16,940

Taylor Made



Cash consideration, net of cash acquired	$	90,396

Customer relationships	$	25,000
Other identifiable intangible assets	7,000
Net tangible assets	42,133
Total fair value of net assets acquired	$	74,133

Goodwill (tax deductible)	$	16,263

Acquisitions During the Nine Months Ended September 30, 2017

Metallarte S.r.l.



Cash consideration, net of cash acquired	$	13,501
Contingent consideration	2,366
Total fair value of consideration given	$	15,867

Customer relationships	$	7,311
Other identifiable intangible assets	1,942
Net other liabilities	(327		)
Total fair value of net assets acquired	$	8,926

Goodwill (not tax deductible)	$	6,941

Lexington



Cash consideration	$	40,062

Customer relationships	$	16,900
Other identifiable intangible assets	1,820
Net tangible assets	4,928
Total fair value of net assets acquired	$	23,648

Goodwill (tax deductible)	$	16,414

Sessa Klein S.p.A.



Cash consideration, net of cash acquired	$	6,502
Contingent consideration	3,838
Total fair value of consideration given	$	10,340

Identifiable intangible assets	$	2,286
Net tangible assets	364
Total fair value of net assets acquired	$	2,650

Goodwill (not tax deductible)	$	7,690

Goodwill

Goodwill by reportable segment was as follows:



(In thousands)	OEM Segment		Aftermarket Segment		Total
Net balance – December 31, 2017	$	109,641	$	14,542	$	124,183
Acquisitions – 2018	34,669		4,099		38,768
Other	260		—		260
Net balance – September 30, 2018	$	144,570	$	18,641	$	163,211

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 consisted of the following at September 30, 2018:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	187,804	$	52,204	$	135,600	6	to	16
Patents	55,858		38,451		17,407		3	to	19
Trade names	15,922		5,828		10,094		3	to	15
Non-compete agreements	7,650		3,890		3,760		3	to	6
Other	309		133		176		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	272,230	$	100,506	$	171,724

Other intangible assets consisted of the following at September 30, 2017:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	138,941	$	39,792	$	99,149	6	to	16
Patents	57,416		37,277		20,139		3	to	19
Trade names	10,416		4,708		5,708		3	to	15
Non-compete agreements	8,479		3,609		4,870		3	to	6
Other	309		101		208		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	220,248	$	85,487	$	134,761

Other intangible assets consisted of the following at December 31, 2017:



(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	138,687	$	42,276	$	96,411	6	to	16
Patents	57,576		38,764		18,812		3	to	19
Trade names	10,995		5,381		5,614		3	to	15
Non-compete agreements	8,536		4,128		4,408		3	to	6
Other	309		109		200		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	220,790	$	90,658	$	130,132

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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