What were the transaction costs incurred and expensed by 360 Painting as a result of the Rooterman transaction?
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 services franchising platform. All goodwill that has been recognized in the acquisition related to intangible assets that do not qualify for separate recognition. Identified goodwill is expected to be deductible for tax purposes.
As a result of
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 FDD, 360 Painting entered into an asset purchase agreement in January 2022 to acquire substantially all of the assets of A Corp, Inc., also known as Rooterman, for a net purchase price of $3,900,000. The acquisition of Rooterman, a sewer and drain maintenance and repair franchising company, was intended to expand 360 Painting's presence within its home services franchising platform. The transaction was funded by $3,950,000 in draws on an existing term loan facility and $42,267 in cash on hand.
As a result of this transaction, 360 Painting incurred and expensed transaction costs amounting to $33,017. These costs are included in the transaction costs reported on the consolidated statements of operations. The purchase price was allocated to the acquired assets and assumed liabilities based on their estimated fair values, following the guidance issued by the FASB for business combinations.
For a prospective franchisee, this indicates that 360 Painting is actively expanding its business through acquisitions, which could lead to increased brand recognition and potentially more comprehensive service offerings. However, it's also important to note that acquisitions involve transaction costs that can impact the company's financial performance. While $33,017 may seem small relative to the $3,900,000 purchase price, these costs can accumulate and should be considered when evaluating the overall financial health and strategic direction of 360 Painting.