Acquisitions

6 Months Ended

Jun. 29, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Acquisitions Completed during the Current Year

In July 2024, the Company completed the acquisition of Mueller Supply Company, Inc. (“Mueller”) for a purchase price of $497.1 million, including a base purchase price of $475.0 million, as well as closing date cash and working capital. The transaction is subject to certain customary adjustments. Mueller is a leading manufacturer of residential metal roofing and components and steel buildings in Texas and the Southwest. The acquisition was funded through borrowing under the Company’s revolving credit facilities further discussed in Note 7. The business will be integrated into our Shelter Solutions reportable segment.

Acquisition of Harvey Building Products Corp.

In April 2024, the Company completed the acquisition of Harvey Building Products Corp. (“Harvey”) for a purchase price of $460.8 million, subject to certain customary adjustments. Harvey is a manufacturer of high performing windows and doors, and its portfolio of industry leading brands include Harvey, Softlite and Thermo-Tech. Headquartered in Waltham, Massachusetts, Harvey has approximately 1,200 employees at four manufacturing facilities located throughout the Northeast and Midwest. Harvey specializes in premium, custom windows and doors primarily serving the Eastern United States (“U.S.”). This acquisition was funded through issuing long-term debt further discussed in Note 7. Harvey is included in the Company’s Aperture Solutions reportable segment.

The purchase price allocation below is based upon provisional information and is subject to revision during the measurement period (up to one year from the acquisition date) as additional information concerning valuations is obtained. During the measurement period, as the Company obtains new information regarding facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities, the Company will accordingly revise the provisional purchase price allocation, which may include, but are not limited to, adjustments pertaining to intangible assets acquired, property, plant and equipment acquired and tax liabilities assumed.

The following table summarizes the provisional fair value of net assets acquired:


	Fair Value
Cash and cash equivalent	$	10,423
Accounts receivable	26,723
Inventories	20,027
Property, plant and equipment	40,747
Lease right-of-use assets	124,271
Goodwill	271,827
Trade name and customer relationship intangibles	159,300
Other assets	3,829
Total assets acquired	657,147
Accounts payable and other liabilities assumed	55,108
Lease liabilities	106,613
Deferred income tax liabilities	34,587
Total liabilities assumed	196,308
Net assets acquired	$	460,839

The transaction was accounted for using the acquisition method and, as a result, tangible and intangible assets acquired, and liabilities assumed were recorded at their estimated fair values as of the acquisition date in April 2024. Any excess consideration over the fair value of the assets and liabilities assumed was recognized as goodwill and is subject to revision as the purchase price allocation is completed. The Company identified intangible assets for customer relationships, trade names and certain other intangibles. Intangible assets are amortized on a straight-line basis over their expected useful lives. The provisional fair value and expected useful life of identifiable intangible assets consists of the following:


	Fair Value		Useful Life (years)
Customer relationships	$	113,400	19
Trade names and other	45,900		15
Total	$	159,300

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired. The acquisition of Harvey resulted in the recognition of $271.8 million of goodwill. The goodwill recorded is a result of expected synergies and other benefits that we believe will result from the integration of the acquisition with our operations. Goodwill created as a result of the acquisition of Harvey is not expected to be deductible for tax purposes. A net deferred tax liability of $34.6 million was established as a result of the acquisition.

Acquisitions Completed During the Prior Year

In December 2023, the Company completed the acquisition of the Eastern Architectural Systems (“EAS”) business, whose operations are included in the Company’s Aperture Solutions reportable segment. EAS is based in Ft. Myers, Florida and manufactures custom-made aluminum and vinyl impact windows and doors. In August 2023, the Company completed the acquisition of M.A.C. Métal Architectural Inc. (“MAC Metal”), which became an indirect wholly-owned subsidiary of the Company. Headquartered in Saint-Hubert, Quebec, MAC Metal serves the North American residential and commercial markets with high-end steel siding and roofing products. MAC Metal is included in the Company’s Surface Solutions reportable segment.

The total purchase price for these acquisitions was $235.5 million, comprised of upfront cash payments of $217.7 million and earn-out contingent consideration of $16.8 million related to the MAC Metal transaction. The purchase price of these acquisitions was provisionally allocated to the assets acquired and liabilities assumed, which related primarily to inventory of $15.9 million, property, plant and equipment of $21.3 million, goodwill of $88.4 million, intangible assets such as, customer lists and trademarks, of $73.4 million and $34.3 million, contingent consideration of $16.8 million and noncurrent deferred income tax liabilities of $12.3 million. The goodwill recorded is a result of expected synergies and other benefits that we believe will result from the integration of the acquisitions with our operations.

The MAC Metal acquisition earn-out is payable over two consecutive twelve-month periods, with the first period starting in the month following the close of the applicable acquisition and payments are based upon achieving certain adjusted EBITDA-based metrics, as defined in the purchase agreement. There was an increase of $1.4 million in contingent consideration during the six months ended June 29, 2024 to $18.2 million, of which $8.2 million is recognized in other current liabilities and $10.0 million is recognized in other long-term liabilities on our Condensed Consolidated Balance Sheets at June 29, 2024.