Acquisition (Notes)

6 Months Ended

Jun. 30, 2020

Acquisition

On January 4, 2019, we completed the acquisition of Hefei Gaomei Cleaning Machines Co., Ltd. and Anhui Rongen Environmental Protection Technology Co., Ltd. (collectively "Gaomei"), privately held designers and manufacturers of commercial cleaning solutions based in China. The financial results for Gaomei have been included in the consolidated financial results since the date of closing.

The fair value measurements were final as of December 31, 2019.

The total purchase price includes the following:


•	$11.3 million was paid during the first quarter of 2019 upon close of the transaction;


•	$11.3 million which was paid in the fourth quarter of 2019;

•

$4.7 million which represents the estimated fair value of contingent consideration at the acquisition date. In April 2020, the earnout agreement was modified. The final payment is based on a fixed payment plus variable payments contingent on achieving certain levels of gross profit and achieving integration milestones. Consideration of $1.4 million to $3.1 million will be paid in March 2021 if the targets are met. As of June 30, 2020, the contingent consideration had a fair value of $1.8 million based on a probability-weighted analysis of achieving targets; and


•	$(0.2) million which represents a working capital purchase price adjustment.

None of the goodwill is expected to be deductible for income tax purposes. The expected lives of the acquired amortizable intangible assets range from 10 years to 15 years and are being amortized on a straight-line basis.