|9 Months Ended|
Sep. 30, 2021
Acquisition of Colonial Elegance
On October 22, 2020, Renin acquired substantially all of the assets and assumed certain of the liabilities of Colonial Elegance, Inc (“Colonial Elegance”), a supplier and distributor of building products that was headquartered in Montreal, Canada. Colonial Elegance’s products included barn doors, closet doors, and stair parts, and its customers included various big box retailers in the United States and Canada.
The base purchase price for the acquisition was $38.8 million. 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. Renin paid substantially all of the purchase consideration in cash at closing, which was funded by Renin with proceeds from its amended and restated credit facility with TD Bank and a $5.0 million capital contribution from BBX Capital.
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 nine months ended September 30, 2021, the Company finalized its valuation associated with Colonial Elegance and updated its purchase price allocation based on the final valuation. The following table summarizes the purchase price allocation based on the Company’s valuation, including fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
(1)Identifiable intangible assets were comprised of $2.9 million, $18.7 million, and $0.2 million associated with Colonial Elegance’s trademark, customer relationships, and noncompetition agreements, respectively. The identifiable intangible assets are being 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 $1.7 million related to below market rents associated with the lease for a distribution facility that is expected to be recognized over the lease term of approximately seven years.
The 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 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 would have a material effect on the estimated fair value amounts.
The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef