Quarterly report pursuant to Section 13 or 15(d)

Acquisition

v3.21.1
Acquisition
3 Months Ended
Mar. 31, 2021
Acquisition [Abstract]  
Acquisition

2.    Acquisition



Acquisition of Colonial Elegance



On October 22, 2020, Renin acquired substantially all of the assets and assumed certain of the liabilities of Colonial Elegance. Headquartered in Montreal, Canada, Colonial Elegance is a supplier and distributor of building products, including barn doors, closet doors, and stair parts, and its customers include various big box retailers in the United States and Canada.    The base purchase price for the acquisition was $38.8 million, substantially all of which was paid in cash by Renin at closing. In addition to the base purchase price, Renin acquired excess working capital held by Colonial Elegance for $4.3 million, which resulted in total purchase consideration of $43.1 million. BBX Capital made a $5.0 million capital contribution to Renin to partially fund the acquisition of Colonial Elegance, while the remainder of the acquisition was funded by Renin under its amended and restated credit facility with TD Bank. 





As of December 31, 2020, the Company reported a provisional purchase price allocation based on the Company’s preliminary estimates of the fair values of the assets acquired and liabilities assumed at the acquisition date. During the three months ended March 31, 2021, additional information was obtained related to the assets and liabilities associated with Colonial Elegance, and the Company updated its provisional purchase price allocation based on its updated preliminary valuation. The following table summarizes the provisional purchase price allocation based on the Company’s current preliminary valuation, including the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): 



 

 

 



 

 

 

Cash

 

$

557 

Trade accounts receivable

 

 

10,278 

Trade inventory

 

 

12,149 

Property and equipment

 

 

1,007 

Identifiable intangible assets (1)

 

 

19,680 

Operating lease asset (2)

 

 

3,188 

Other assets

 

 

650 

Total assets acquired

 

 

47,509 

Accounts payable

 

 

(5,619)

Other liabilities

 

 

(3,524)

Operating lease liability

 

 

(2,213)

Total liabilities assumed

 

 

(11,356)

Fair value of identifiable net assets

 

 

36,153 

Goodwill

 

 

6,936 

Purchase consideration

 

 

43,089 

Less: cash acquired

 

 

(557)

Less: consideration payable

 

 

(194)

Cash paid for acquisition less cash acquired

 

$

42,338 



(1)

Identifiable intangible assets were comprised of $3.7 million, $15.8 million and $0.2 million associated with Colonial Elegance’s trademark, customer relationships, and noncompetition agreements, respectively. The identifiable intangible assets are amortized over their expected useful lives of 5 years for noncompetition agreements and 13 years for trademarks and customer relationships.

(2)

Includes an intangible asset of $1.0 million related to below market rents associated with an office lease that is expected to be recognized over the lease term of approximately seven years.



The provisional fair values reported in the above table were estimated by the Company using available market information and applicable valuation methods. As considerable judgment is involved in estimates of fair value, the provisional fair values presented above are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methods could have a material effect on the estimated fair value amounts.



As management is still in the process of completing its valuation analysis, the Company’s accounting for the acquisition is not complete as of the date of this report. As a result, the amounts reported in the above table are provisional amounts that may be updated in subsequent periods to reflect the completion of the Company’s valuation analysis and any additional information obtained during the measurement period.