What was the amount of goodwill recognized in the Rooterman acquisition by 360 Painting?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The purchase price was allocated as follows:
| Current assets | $ 24,145 |
|---|---|
| Property and equipment | 112,624 |
| Other assets | 2,500 |
| Assets acquired | 139,269 |
| Liabilities assumed | (139,268) |
| Purchase price | $ 1 |
Rooterman
In January 2022, the Company entered into an asset purchase agreement to acquire substantially all of the assets of A Corp, Inc. for an aggregate net purchase price of $3,900,000. The transaction was funded by $3,950,000 in draws on the existing term loan facility and $42,267 in cash on hand. Rooterman is a sewer and drain maintenance and repair franchising company and has been acquired to allow for the expansion of the Company's presence within its home service
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, 360 Painting acquired Rooterman in January 2022 through an asset purchase agreement. The net purchase price for substantially all of the assets of A Corp, Inc. (Rooterman) was $3,900,000. This transaction was financed by drawing $3,950,000 from an existing term loan facility, along with $42,267 in cash. The purpose of acquiring Rooterman, a sewer and drain maintenance and repair franchising company, was to broaden 360 Painting's presence in the home services franchising sector.
The FDD specifies that all goodwill recognized during the acquisition was related to intangible assets that did not qualify for separate recognition. This goodwill is expected to be deductible for tax purposes. Additionally, 360 Painting incurred transaction costs of $33,017 because of the acquisition, which were expensed and included in the consolidated statements of operations.
For a prospective 360 Painting franchisee, this acquisition indicates the franchisor's strategy of expanding its portfolio within the home services industry. The recognition of goodwill and its tax-deductible status are accounting details that reflect the financial structuring of the acquisition. The transaction costs associated with such acquisitions are also a factor in the company's overall financial performance, which franchisees may want to consider as part of their investment decision.