15.  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, 2021 and 2020, were $15.3 million and $0.9 million, respectively.  Acquisition costs are included in selling, general, and administrative expense in our condensed consolidated statements of operations. The tables below provide a summary of businesses acquired in 2021 including, for significant acquisitions, the net sales and net (loss) income incurred for the year ended December 31, 2021:

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Pro Forma Results- DI Acquisition

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The following unaudited pro forma information has been prepared as if the acquisition of DI, as described above, had taken place on January 1, 2020. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transaction actually taken place on January 1, 2020. Further, the unaudited pro forma information does not purport to be indicative of future financial operating results. Our unaudited pro forma results are presented below, in thousands:

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The following table details the additional expense included in the unaudited pro forma operating income as if the acquisition of DI had taken place on January 1, 2020. Our unaudited pro forma results are presented below, in thousands:

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The proforma impact of all other 2021 acquisitions were immaterial to our results of operations for the years ended December 31, 2021 and 2020.

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Purchase Price Allocations

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The estimated fair values of the assets acquired and liabilities assumed for the 2021 acquisitions, as well as the fair value

of consideration transferred, approximated the following as of December 31, 2021, in thousands:

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Estimates of acquired intangible assets related to the 2021 acquisitions are as follows, as of December 31, 2021, dollars in thousands:

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The acquisition of DI comprises $434 million of the customer relationships additions and $24 million of the trademarks and trade names additions in 2021.

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The table below provides a summary as of December 31, 2021 for businesses acquired during the year ended December 31, 2020:

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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. 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 goodwill recorded for the year ended December 31, 2021 and 2020, respectively, is deductible for income tax purposes with the exception of Distribution International. Of the goodwill recorded from the acquisition of Distribution International $52.9 is deductible for income tax purposes.

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Contingent Consideration

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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, 2021.

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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 ending February 20, 2022. 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. Changes in the fair value measurement each period reflect the impact of adjustments, if any, to the likelihood of achieving the specified targets. We made a contingent payment of $0.2 million during the year ended December 31, 2021 and the remaining liability for contingent consideration has been released with no further payments anticipated.

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The acquisition of Valley 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 ending August 23, 2023. The range of undiscounted amounts TopBuild may be required to pay under the contingent consideration agreement is between zero and $1.2 million, which also represents the fair value recognized on the acquisition date. Changes in the fair value measurement each period reflect the impact of adjustments, if any, to the likelihood of achieving the specified targets.

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Payments of contingent consideration are classified as either financing or operating activities on our condensed consolidated statement of cash flows in accordance with ASC 230-10-45. The following table presents the fair value of contingent consideration, in thousands:

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