In January 2022, the Company acquired a business that provides pickling
inhibitor technologies, drawing lubricants and stamping
oil, and various other lubrication, rust preventative, and cleaner applications,
which is part of the Americas reportable segment for
approximately $
8.0
million.
This business broadens the Company’s
product offerings within its existing metals and metalworking
business in the Americas region.
The Company allocated $
5.6
million of the purchase price to intangible assets, comprised of $
5.1
million of customer relationships to be amortized over
14
0.5
million of existing product technologies to be amortized
over
14
years.
In addition, the Company recorded $
1.8
million of goodwill related to expected value not allocated to other acquired
assets, all of which is expected to be tax deductible in various jurisdictions in which
the Company operates.
During the third quarter
of 2022 the Company finalized post-closing adjustments that resulted in
the Company paying less than $
0.1
purchase consideration.
Factors contributing to the purchase price that resulted in goodwill included
the acquisition of business
processes and personnel that will allow Quaker Houghton to better serve
its customers.
In January 2022, the Company acquired a business related to the sealing
and impregnation of metal castings for the automotive
sector, as well as impregnation resin and
impregnation systems for metal parts, which is part of the Global Specialty Businesses
reportable segment for approximately
1.2
million EUR or approximately $
1.4
million.
This business expands the Company's
geographic presence in Germany as well as broadens its product offerings
and service capabilities within its existing impregnation
business.
The results of operations of the January 2022 acquisitions subsequent to
the respective acquisition dates are included in the
unaudited Condensed Consolidated Statements of Income for the nine month
period ended September 30, 2022.
Applicable
transaction expenses associated with these acquisitions are included
in Combination, integration and other acquisition-related
expenses in the Company’s unaudited
Condensed Consolidated Statements of Income.
Certain pro forma and other information is not
presented, as the operations of the acquisitions are not considered material
to the overall operations of the Company for the periods
presented.
The results of operations of the October acquisition is not included in the Consolidated Statements of
Operations because
the date of closing was subsequent to September 30, 2022.
Preliminary purchase price allocation of assets acquired and liabilities
assumed for this business acquired has not been presented as that information
is not available as of the date of these Condensed
Consolidated Financial Statements.
Previous Acquisitions
In November 2021, the Company acquired Baron Industries (“Baron”),
a privately held company that provides vacuum
impregnation services of castings, powder metals and electrical components
for its Global Specialty Businesses reportable segment for
$
11.0
million, including an initial cash payment of $
7.1
million, subject to post-closing adjustments as well as certain earn-out
provisions that are payable at various times from 2022 through 2025.
The earn-out provisions could total a maximum of $
4.5
In September 2022, the Company paid $
2.5
million related to certain of these earnout provisions.
The Company recorded an
incremental earn-out expense of $
0.1
million during the three and nine months ended September 30, 2022 related to
these earnout
provisions, recorded within the financial
statement caption “Combination, integration and other acquisition-related
expenses” on the
Company’s Condensed Consolidated
Statements of Income.
As of September 30, 2022, the Company has remaining earnout liabilities
recorded on its Condensed Consolidated Balance Sheet of $
1.6
million.
The Company allocated $
8.0
million of the purchase price to
intangible assets, $
1.1
million of property, plant
and equipment and $
1.5
million of other assets acquired net of liabilities assumed,
which includes $
0.3
million of cash acquired.
In addition, the Company recorded $
0.4
million of goodwill, all of which is expected to
be tax deductible.
Intangible assets comprised $
7.2
million of customer relationships to be amortized over
15 years
; and $
0.8
of existing product technology to be amortized over
13 years
.
Factors contributing to the purchase price that resulted in goodwill
included the acquisition of business processes and personnel that will allow Quaker
Houghton to better serve its customers.
During
the third quarter of 2022 the Company finalized post-closing adjustments
that resulted in the Company receiving less than $
0.1
million.
In November 2021, the Company acquired a business that provides hydraulic
fluids, coolants, cleaners, and rust preventative oils
in Türkiye for its EMEA reportable segment for
3.2
million EUR or approximately $
3.7
In September 2021, the Company acquired the remaining interest in Grindaix
GmbH (“Grindaix”), a Germany-based, high-tech
provider of coolant control and delivery systems for its Global Specialty Businesses reportable
segment for
2.4
approximately $
2.9
million, which is gross of approximately $
0.3
million of cash acquired.
Previously, in February
2021, the
Company acquired a
38
% ownership interest in Grindaix for
1.4
million EUR or approximately $
1.7
million.
The Company recorded
its initial investment as an equity method investment within the Condensed
Consolidated Financial Statements and accounted for the
purchase of the remaining interest as a step acquisition whereby the Company
remeasured the previously held equity method
investment to its fair value.
In June 2021, the Company acquired certain assets for its chemical milling
maskants product line in the Global Specialty
Businesses reportable segment for
2.3
million EUR or approximately $
2.8