What amount of goodwill did Aplus acquire in connection with the acquisition of Peerless?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
ay 1, 2023, we completed the acquisition of 16 refined product terminals located across the East Coast and Midwest from Zenith Energy for approximately $111 million, including working capital. The purchase price was primarily allocated to property and equipment.
2022 Acquisitions
On November 30, 2022, we completed the acquisition of Peerless for $67 million, net of cash acquired. Peerless is an established terminal operator that distributes fuel products to over 100 locations primarily within Puerto Rico. Management, with the assistance of an independent valuation firm, determined the fair value of assets and liabilities at the date of the acquisition. Goodwill
acquired in connection with the acquisition is deductible for tax purposes.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the company acquired Peerless on November 30, 2022, for $67 million, net of cash acquired. Aplus allocated a portion of the purchase price to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired.
The FDD provides a table summarizing the goodwill related to the Peerless acquisition. The balance of goodwill related to the Peerless acquisition was $13,000 as of December 31, 2022. This amount is specifically attributed to the Fuel Distribution and Marketing All Other segment.
Understanding goodwill is important for prospective Aplus franchisees because it reflects the intangible value Aplus places on acquired businesses like Peerless. Goodwill is subject to impairment testing, and any significant impairment could affect Aplus's financial performance, which indirectly impacts franchisees. Additionally, the FDD states that goodwill acquired in connection with the acquisition is deductible for tax purposes.