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Acquisitions, Goodwill And Other Intangible Assets

9 Months Ended

Sep. 30, 2019

Acquisitions, Goodwill And Other Intangible Assets [Abstract]

ACQUISITIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

Subsequent Event

SureShade

In October 2019, the Company acquired substantially all of the business assets (collectively referred to under the business name “SureShade”) of Rodan Enterprises, LLC, a designer and manufacturer of sunshade systems for the outdoor recreation industry in North America and Europe headquartered in Philadelphia, Pennsylvania. The purchase price was $14.0 million, which includes holdback payments of $1.4 million. The results of the acquired business will be included primarily in the Company’s OEM Segment. The Company is in the process of determining the fair value of the assets acquired and liabilities assumed for the opening balance sheet.

Acquisitions Completed During the Nine Months Ended September 30, 2019

Ciesse Holdings S.r.l.

In August 2019, the Company acquired 100 percent of the equity interests of Ciesse Holding S.r.l. and related entities (collectively, “Ciesse”), a supplier of railway interior products and systems, headquartered in Rignano sull’Arno, Italy. The purchase price was $5.4 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 Consolidated Statements of Income since the acquisition date.

The accounting for the Ciesse business combination is incomplete. The estimated fair value of assets acquired and liabilities assumed is based on a preliminary allocation and will be finalized during the measurement period which will not exceed 12 months from the acquisition date. As the acquisition of Ciesse is not considered to have a material impact on the Company’s financial statements, proforma results of operations, and other disclosures are not presented.

Lewmar Marine Ltd.

In August 2019, the Company acquired 100 percent of the equity interests of Lewmar Marine Ltd. and related entities (collectively, “Lewmar”), a supplier of leisure marine equipment, headquartered in Havant, United Kingdom. The purchase price was $40.5 million, net of cash acquired, 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 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	$	40,453

Customer relationship and other identifiable intangible assets	$	15,000
Net tangible assets	3,348
Total fair value of net assets acquired	$	18,348

Goodwill (not tax deductible)	$	22,105

The customer relationship 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. As the acquisition of Lewmar is not considered to have a material impact on the Company’s financial statements, proforma results of operations and other disclosures are not presented.

Lavet S.r.l.

In June 2019, the Company acquired 100 percent of the equity interests of Lavet S.r.l. (“Lavet”), a manufacturer of window blind systems for European leisure vehicles, headquartered in Siena, Italy. The purchase price was $2.4 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 Consolidated Statements of Income since the acquisition date.

The accounting for the Lavet business combination is incomplete. The estimated fair value of assets acquired and liabilities assumed is based on a preliminary allocation and will be finalized during the measurement period which will not exceed 12 months from the acquisition date. As the acquisition of Lavet is not considered to have a material impact on the Company’s financial statements, proforma results of operations, and other disclosures are not presented.

Femto Engineering S.r.l.

In June 2019, the Company acquired 100 percent of the equity interests of Femto Engineering S.r.l. and related entities (collectively, “Femto”), an engineering company with focus on designing and manufacturing of plastic moldings, headquartered in San Casciano, Italy. The purchase price was $5.7 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 Consolidated Statements of Income since the acquisition date.

The accounting for the Femto business combination is incomplete. The purchase price was preliminarily recorded in goodwill with allocations to the acquired real estate and assumed debt on the real estate at September 30, 2019. The estimated fair value of other assets acquired and liabilities assumed is based on a preliminary allocation and will be finalized during the measurement period which will not exceed 12 months from the acquisition date. As the acquisition of Femto is not considered to have a material impact on the Company’s financial statements, proforma results of operations, and other disclosures are not presented.

Acquisitions Completed During the Year Ended December 31, 2018

Smoker Craft Furniture

In November 2018, the Company acquired the business and certain assets of the furniture manufacturing operation of Smoker Craft Inc., a leading pontoon, aluminum fishing, and fiberglass boat manufacturer located in New Paris, Indiana. The purchase price was $28.1 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 Company is validating account balances and finalizing the valuation for the acquisition. The acquisition of this business was recorded on the acquisition date as follows (in thousands):


Cash consideration	$	28,091

Customer relationship and other identifiable intangible assets	$	16,730
Net tangible assets	1,357
Total fair value of net assets acquired	$	18,087

Goodwill (tax deductible)	$	10,004

ST.LA. S.r.l.

In June 2018, the Company acquired 100 percent of the equity interests of ST.LA. S.r.l., a manufacturer of bed lifts and other RV components for the European caravan market, headquartered in Pontedera, Italy. The purchase price was $14.8 million, net of cash acquired, 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 as of the acquisition date as follows (in thousands):


Cash consideration, net of cash acquired	$	14,845

Customer relationships and other identifiable intangible assets	$	6,354
Net tangible assets	4,099
Total fair value of net assets acquired	$	10,453

Goodwill (not tax deductible)	$	4,392

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.

Goodwill

Goodwill by reportable segment was as follows:


(In thousands)	OEM Segment		Aftermarket Segment		Total
Net balance – December 31, 2018	$	160,257	$	19,911	$	180,168
Acquisitions – 2019	18,204		8,842		27,046
Other	(3,609)		(100)		(3,709)
Net balance – September 30, 2019	$	174,852	$	28,653	$	203,505

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, 2019:


(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	200,497	$	64,747	$	135,750	6	to	16
Patents	61,546		43,247		18,299		3	to	19
Trade names (finite life)	15,209		6,652		8,557		3	to	15
Trade names (indefinite life)	7,600		—		7,600		Indefinite
Non-compete agreements	7,193		4,919		2,274		3	to	6
Other	308		165		143		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	297,040	$	119,730	$	177,310

Other intangible assets consisted of the following at December 31, 2018:


(In thousands)	Gross Cost		Accumulated Amortization		Net Balance		Estimated Useful Life in Years
Customer relationships	$	191,919	$	54,889	$	137,030	6	to	16
Patents	58,787		40,079		18,708		3	to	19
Trade names (finite life)	10,885		5,507		5,378		3	to	15
Trade names (indefinite life)	7,600		—		7,600		Indefinite
Non-compete agreements	6,919		4,148		2,771		3	to	6
Other	309		141		168		2	to	12
Purchased research and development	4,687		—		4,687		Indefinite
Other intangible assets	$	281,106	$	104,764	$	176,342

Acquisitions