BUSINESS COMBINATIONS |
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| BUSINESS COMBINATIONS | 2. BUSINESS COMBINATIONS On December 2, 2025, the Company completed the acquisition of 100% of the outstanding equity interests in Omars – S.p.A. (“Omars”), an Italian company. Omars manufactures towing and recovery equipment in Italy and sells its products and services in Europe and various other regions. The acquisition of Omars provides additional manufacturing capacity and expands the Company’s market footprint outside the United States. The purchase price, totaling approximately $20.2 million, was comprised of cash on hand and by drawing on the Company’s existing revolving credit facility. The preliminary allocation of the consideration for the acquisition of Omars was as follows:
The fair value of the assets acquired includes trade receivables of $4.8 million that are not purchased financial assets with credit deterioration. The Company does not anticipate any markdowns of trade receivables or corresponding credit losses. The Company has engaged a third-party to perform a valuation of Omars, which includes intangible assets and real estate. However, the valuation has not been completed at the time of this filing. As such, any adjustment to the value of assets, such as intangible assets, fixed assets and/or inventory, will be disclosed in future filings. We expect the valuation to be finalized in the third quarter of 2026. Transaction costs incurred in the acquisition were not material and were primarily related to legal, accounting, and consulting services and were expensed as incurred through June 30, 2026 and are included in Selling, General and Administrative expenses in the consolidated statements of operations. The allocations of the fair value of the acquired business were based on preliminary valuations of the estimated net fair value of the assets and liabilities of Omars. The provisional fair value estimates are subject to adjustment during the measurement period (up to one year from the acquisition date). The fair values of the assets acquired are based on management’s estimates and assumptions, as well as other information compiled by management. During the measurement period, preliminary valuations assigned to assets and liabilities will be adjusted if new information is obtained about facts and circumstances that existed as of the acquisition date which, if known, would have resulted in revised values for these items as of that date. The net working capital adjustment related to the acquisition is estimated as of the closing date and will subsequently be adjusted based on that estimate. Net working capital adjustments, if any, will be recorded in other assets on the consolidated balance sheet. The impact of all changes, if any, that do not qualify as measurement period adjustments will be included in current period earnings. The results of operations of Omars for the period from the December 2, 2025 acquisition date through June 30, 2026, are included in the accompanying consolidated statements of operations. Transaction costs associated with the acquisition were not significant. Pro Forma Consolidated Financial Information (Unaudited) The results of operations for Omars, and the estimated fair values of the assets acquired, and liabilities assumed have been included in the Company’s consolidated financial statements since the date Omars acquired 100% of the outstanding equity interests in Omars – S.p.A. For the three months ended June 30, 2026, Omars contributed approximately $8.6 million to the Company’s revenues and decreased pretax income by approximately $0.2 million. For the six months ended June 30, 2026, Omars contributed approximately $16.2 million to the Company’s revenues and decreased pretax income by approximately $0.4 million. Loss for the period includes adjustments made for amortization of estimated intangible assets as well as sales of finished goods recorded at market value as part of the acquisition. The unaudited pro forma financial information in the table below summarizes the combined results of the Company’s operations and those of Omars for the periods as shown as if the acquisition had occurred on January 1, 2025. The pro forma financial information presented below is for informational purposes only, and is subject to a number of estimates, assumptions and other uncertainties. The Company did not have any material, non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.
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