11. BUSINESS COMBINATIONS

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Acquiring businesses is a key 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 three months ended March 31, 2023 and 2022, were $1.7 million and $0.9 million, respectively.  Acquisition related costs are included in selling, general, and administrative expense in our condensed consolidated statements of operations.

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On January 26, 2023, we acquired the assets of the residential insulation business of SRI. This installation acquisition enhanced our presence in Georgia, Michigan, Ohio, Florida, Alabama and South Carolina. The purchase price of $45.8 million was funded by cash on hand and we recognized goodwill of $25.4 in connection with this acquisition.

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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 provides a summary as of March 31, 2023 for the businesses acquired and paid for with cash during the three months ended March 31, 2022, in thousands:

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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 $25.4 million and $4.1 million of goodwill recorded from acquisitions completed in the three months ended March 31, 2023 and 2022, respectively, is expected to be deductible for income tax purposes.