Schneider National Inc

2. ACQUISITIONS

M&M Transport Services, LLC

On August 1, 2023 (“Acquisition Date”), we acquired 100% of the membership interest in M&M for $243.8 million, inclusive of cash and other working capital adjustments. M&M is a dedicated trucking company located primarily in New England with nearly 500 tractors and 1,900 trailers which we believe complements our dedicated operations.

The acquisition of M&M was accounted for under the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized on the consolidated balance sheets at their fair value as of the Acquisition Date. These inputs represent Level 3 measurements in the fair value hierarchy and required significant judgments and estimates at the time of valuation. Fair value estimates of acquired transportation equipment were based on an independent appraisal, giving consideration to the highest and best use of the assets with key assumptions based on the market approach. The assistance of an independent third-party valuation firm was used to determine the estimated fair values and useful lives of finite-lived intangible assets including customer relationships and trademarks. Valuation methods used were the multi-period excess earnings method and relief from royalty method for customer relationships and trademarks, respectively. Non-compete agreements were recorded based on amount paid at closing.

The excess of the purchase price over the estimated fair values of assets acquired and liabilities assumed was recorded as goodwill within the Truckload reporting segment. The goodwill is attributable to expected synergies and growth opportunities within our dedicated business and is expected to be deductible for tax purposes.

Acquisition-related costs, which consist of fees incurred for advisory, legal, and accounting services were not material and were included in other general expenses in the Company’s consolidated statements of comprehensive income for the three months ended March 31, 2024.

The following table summarizes the preliminary purchase price allocation for M&M, including any adjustments during the measurement period.

The above adjustments made during the measurement period were primarily related to working capital, accrued taxes, and intangible assets. No material adjustments were made during the three months ended March 31, 2024, and although we may adjust provisional amounts through July 31, 2024, we do not anticipate any material adjustments.

Certain amounts recorded in connection with the acquisition are still considered preliminary as we continue to gather the necessary information to finalize our fair value estimates and provisional amounts. Provisional amounts include items related to deferred taxes and indemnification assets and liabilities.

The following unaudited pro forma revenues give effect to the acquisition had it been effective January 1, 2023. Combined unaudited pro forma operating revenues of the Company and M&M would have been approximately $1,459.5 million during the three months ended March 31, 2023, and our earnings for the same period would not have been materially different.