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12. BUSINESS COMBINATIONS

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Acquiring businesses is a key part of our ongoing strategy to grow our company and expand our offerings. Each acquisition has been accounted for as a business combination under ASC 805, “Business Combinations.” Acquisition related costs were $0.5 million and $27.2 million in the three and nine months ended September 30, 2024, respectively, which includes $23.0 million paid in the second quarter in connection with the mutual termination of our previous agreement to acquire SPI. Acquisition related costs were $6.2 million and $9.0 million for the three and nine months ended September 30, 2023, respectively. Acquisition related costs are included in selling, general, and administrative expense in our condensed consolidated statements of operations.

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On February 15, 2024, we acquired the assets of the residential and light commercial insulation business Brabble. This installation acquisition enhanced our presence in North Carolina. The purchase price of $5.4 million was funded by cash on hand and we recognized $3.0 million of goodwill in connection with this acquisition.

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On March 1, 2024, we acquired the assets of the residential insulation business Morris Black. This installation acquisition enhanced our presence in Pennsylvania. The purchase price of $3.6 million was funded by cash on hand and we recognized $2.0 million of goodwill in connection with this acquisition.

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On March 1, 2024, we acquired the assets of the customized insulation products and accessories business PCI. This specialty distribution acquisition has a national customer base focused on the domestic pest control industry. The purchase

price of $13.8 million was funded by cash on hand and we recognized $5.7 million of goodwill in connection with this acquisition.

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On April 18, 2024, we acquired the assets of the residential and light commercial insulation business Green Space. This installation acquisition enhanced our presence in Missouri and neighboring states. The purchase price of approximately $4.3 million was funded by cash on hand and we recognized $2.6 million of goodwill in connection with this acquisition.

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On May 16, 2024, we acquired the assets of the residential and light commercial insulation business Insulation Works. This installation acquisition enhanced our presence in Arkansas and extended our expertise to the agricultural business. The purchase price of approximately $25.5 million was funded by cash on hand and we recognized $15.1 million of goodwill in connection with this acquisition.

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On May 31, 2024, we acquired the assets of the residential and light commercial insulation business Texas Insulation. This installation acquisition enhanced our presence in Texas. The purchase price of approximately $35.9 million was funded by cash on hand and we recognized $22.9 million of goodwill in connection with this acquisition.

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The estimated fair values of the assets acquired and liabilities assumed for our 2024 acquisitions are as follows as of September 30, 2024, in thousands:

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The estimate of acquired customer relationships related to our 2024 acquisitions was $29.3 million and the weighted average useful life is 12 years.

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During the nine months ended September 30, 2023, we made the following acquisitions:

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On January 26, 2023, we acquired the assets of the residential insulation business of SRI. The purchase price of $45.3 was funded by cash on hand.

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On July 10, 2023, we acquired the assets of the residential insulation installer business Rocky Mountain. The purchase price of $7.2 million was funded by cash on hand.

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On July 17, 2023, we acquired the assets of the residential insulation business Best. The purchase price of $94.6 million was funded by cash on hand.

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As third-party or internal valuations are finalized, certain tax aspects of the foregoing transactions are completed, and customer post-closing reviews are concluded, adjustments may be made to the fair value of assets acquired, and in some cases total purchase price, through the end of each measurement period, generally one year following the applicable acquisition date.  

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The table below represents the finalized fair values of assets acquired and liabilities assumed for the acquisitions made during the nine months ended September 30, 2023:

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Goodwill to be recognized in connection with acquisitions is attributable to the synergies expected to be realized and improvements in the businesses after the acquisitions. Primarily all of the $51.2 million and $78.1 million of goodwill recorded from acquisitions completed in the nine months ended September 30, 2024 and 2023, respectively, is expected to be deductible for income tax purposes.