16.  BUSINESS COMBINATIONS

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We continue to acquire businesses as part of our ongoing strategy to grow our company and expand our market share. Each acquisition has been accounted for as a business combination under ASC 805, “Business Combinations.” Acquisition related costs for the years ended December 31, 2020 and 2019, were $0.9 million and $0.1 million, respectively.  Acquisition costs are included in selling, general, and administrative expense in our condensed consolidated statements of operations.

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Acquisitions

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On July 15, 2019, we acquired Viking, an insulation company located in Burbank, California. The purchase price of approximately $7.7 million was funded by cash on hand of $6.5 million and contingent consideration of $1.2 million.

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On February 20, 2020, we acquired Cooper, a commercial glass company serving the Memphis market. The purchase price of approximately $11.5 million was funded by cash on hand of $10.5 million and contingent consideration of $1.0 million. We recognized goodwill of $5.7 million in connection with this acquisition during the year ended December 31, 2020.

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On February 24, 2020, we acquired Hunter, a residential insulation company located in Long Island, New York. The purchase price of approximately $9.1 million was funded by cash on hand. We recognized goodwill of $5.3 million in connection with this acquisition during the year ended December 31, 2020.

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On October 1, 2020, we acquired Garland, one of the largest locally owned and operated insulation companies in Texas and Colorado.  The purchase price of approximately $62.1 million was funded by cash on hand. We recognized goodwill of $31.0 million in connection with this acquisition during the year ended December 31, 2020.

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Revenue and operating profit since the respective 2020 acquisition dates included in our Consolidated Statements of Operations were as follows, in thousands:

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Purchase Price Allocations

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The estimated fair values of the assets acquired and liabilities assumed for the 2020 acquisitions, as well as the fair value

of consideration transferred, approximated the following as of December 31, 2020, in thousands:

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Estimates of acquired intangible assets related to the 2020 acquisitions are as follows, as of December 31, 2020, dollars in thousands:

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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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Goodwill to be recognized in connection with these acquisitions is attributable to the synergies expected to be realized and improvements in the businesses after the acquisitions.  Primarily all of the $42.8 million of goodwill recorded from the 2020 acquisitions is expected to be deductible for income tax purposes.

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Contingent Consideration

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On February 27, 2017, we acquired substantially all of the assets of EcoFoam, a residential and light commercial insulation installation company with locations in Colorado Springs and Denver, Colorado. The purchase price of approximately $22.3 million was funded by cash on hand of $20.2 million and contingent consideration of $2.1 million. We made the final contingent payment of $0.8 million during the year ended December 31, 2020 and have no remaining obligation under the arrangement.

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The acquisition of Viking included a contingent consideration arrangement that requires additional consideration to be paid by TopBuild based on the achievement of annual gross revenue targets over a three-year period. The range of undiscounted amounts TopBuild may be required to pay under the contingent consideration agreement is between zero and $1.5 million. The fair value of the contingent consideration recognized on the acquisition date of $1.2 million was estimated by applying the income approach using discounted cash flows. That measure is based on significant Level 3 inputs not observable in the market. The significant assumption includes a discount rate of 10.0%. Changes in the fair value measurement each period reflect the passage of time as well as the impact of adjustments, if any, to the likelihood of achieving the specified targets. We made a contingent payment of $0.5 million in the year ended December 31, 2020.

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The acquisition of Cooper includes a contingent consideration arrangement that requires additional consideration to be paid by TopBuild based on the achievement of annual gross revenue targets over a two-year period. The range of undiscounted amounts TopBuild may be required to pay under the contingent consideration agreement is between zero and $1.0 million, which also represents the fair value recognized on the acquisition date.

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The following table presents the fair value of contingent consideration, in thousands:

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