What was the total purchase price allocation methodology used by Best Western for the AutoClerk acquisition?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
venue growth, royalty rate, and discount rate. No impairment was recorded for the years ended November 30, 2024 and 2023.
AutoClerk
On July 31, 2019, the Company entered into and closed a definitive Share Sale and Purchase Agreement with the shareholders of AutoClerk, Inc. ("AC"), to purchase 100% of the outstanding shares of AC. The AC acquisition was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations.
The total purchase price was allocated based upon: (i) the amounts reported in the AC historical financial statements for any assets that were reported at fair value in accordance with AC's historical accounting policies, and (
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, the methodology used to allocate the total purchase price for the AutoClerk acquisition involved two key components. First, Best Western considered the amounts reported in AutoClerk's historical financial statements for any assets already reported at fair value, adhering to AutoClerk's historical accounting policies. Second, Best Western's management estimated the fair value of the remaining assets.
To determine the estimated fair value of other intangible assets, Best Western engaged third-party specialists to conduct valuations. Specifically, the other intangible assets of developed technology and acquired customers were valued at $1.9 million and $1.5 million, respectively.
Finally, if the total purchase price exceeded the fair value of the net assets acquired in the transaction, the excess amount was assigned to goodwill. This approach ensures that the acquisition is accounted for in accordance with accounting standards for business combinations.