Company: THS
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001320695-25-000099
Chunk: 39

Company: TreeHouse Foods, Inc.
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 1
Chunk 39
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 Goodwill69.7 Customer relationships65.0 Trademarks12.9 Other assets0.6 Assets acquired246.4 Assumed liabilities(38.8)Total purchase price$207.6 The acquired receivables includes gross amounts due of $11.4 million which were determined to be collectible. The operating lease right-of-use assets acquired of $25.7 million includes a $6.5 million off-market lease fair value adjustment. The intangible assets acquired include $65.0 million of customer relationships with an estimated life of 20 years and $12.9 million of trademarks with an estimated life of 10 years. The aforementioned intangible assets will be amortized over their estimated useful lives. The Company increased the cost of acquired inventories by approximately $1.9 million and expensed this amount as a component of Cost of sales during the during the first quarter of 2025, for the amortization of the inventory fair value step up adjustment. The Company recognized $69.7 million of goodwill relating to the acquisition. The primary factors that contributed to the recognition of goodwill are growth opportunities provided by vertical integration and customer synergies from its existing coffee and tea businesses. The goodwill resulting from this acquisition is tax deductible, as it is considered an asset acquisition for tax purposes.

13

TREEHOUSE FOODS, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Personal property fair values were determined using the cost approach, and the real estate lease fair values were determined using the income approach. The fair values for customer relationships at the acquisition date were determined using the excess earnings method under the income approach, while trademark fair values were determined using the relief from royalty method. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates, and royalty rates.The purchase price allocation in the table above is preliminary and subject to the finalization of the Company's valuation analysis.The following unaudited pro forma information shows the results of operations for the Company as if its Harris Tea acquisition had been completed as of January 1, 2024. Adjustments have been made for the pro forma effects of depreciation and amortization of tangible and intangible assets recognized as part of the business combination, the amortization of the inventory fair value step-up, the amortization of off-market