QUAKER CHEMICAL CORPKWR
QUAKER CHEMICAL CORP Goodwill & Intangibles Disclosure
Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 were as follows:
Americas | EMEA | Asia/Pacific | Total | ||||||||||||||||||||
| Balance as of December 31, 2023 | 283,103 | 65,940 | 163,475 | 512,518 | |||||||||||||||||||
| Goodwill recognized for Sutai acquisition | — | — | 5,511 | 5,511 | |||||||||||||||||||
| Goodwill recognized for IKV | — | 16,448 | — | 16,448 | |||||||||||||||||||
| Currency translation adjustments | (6,228) | (1,984) | (7,371) | (15,583) | |||||||||||||||||||
| Balance as of December 31, 2024 | 276,875 | 80,404 | 161,615 | 518,894 | |||||||||||||||||||
| Goodwill recognized for Dipsol acquisition | 5,770 | 380 | 46,909 | 53,059 | |||||||||||||||||||
| Goodwill recognized for Natech acquisition | — | 2,625 | — | 2,625 | |||||||||||||||||||
| Goodwill recognized for CSI acquisition | — | 1,721 | — | 1,721 | |||||||||||||||||||
Goodwill recognized for Sutai acquisition (1) | — | — | (233) | (233) | |||||||||||||||||||
| Currency translation adjustments | 4,383 | 3,710 | 6,401 | 14,494 | |||||||||||||||||||
| Goodwill impairments | — | (88,840) | — | (88,840) | |||||||||||||||||||
| Balance as of December 31, 2025 | $ | 287,028 | $ | — | $ | 214,692 | $ | 501,720 | |||||||||||||||
(1) During the year ended December 31, 2025, the Company finalized the working capital settlements which impacted the goodwill recorded. See Note 2, Business Combinations, for additional information.
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Goodwill, gross | $ | 694,311 | $ | 611,498 | $ | 609,571 | ||||||||||||||
Accumulated impairment losses (1) | (192,591) | (92,604) | (97,053) | |||||||||||||||||
| Goodwill, net | $ | 501,720 | $ | 518,894 | $ | 512,518 | ||||||||||||||
(1) Accumulated impairment losses are attributable to the non-cash impairment charges of $88.8 million and $93.0 million to write down the carrying value of the EMEA reporting unit during the second quarter of 2025 and fourth quarter of 2022, respectively. These amounts include the impact of currency translation.
Gross carrying amounts and accumulated amortization for definite-lived intangible assets as of December 31, 2025 and 2024 were as follows:
| Gross Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Customer lists and rights to sell | $ | 901,662 | $ | 829,255 | $ | 351,859 | $ | 285,450 | $ | 549,803 | $ | 543,805 | |||||||||||||||||||||||
| Trademarks, formulations and product technology | 199,434 | 160,257 | 77,521 | 62,373 | 121,913 | 97,884 | |||||||||||||||||||||||||||||
| Other | 6,871 | 5,759 | 6,236 | 5,663 | 635 | 96 | |||||||||||||||||||||||||||||
| Total definite-lived intangible assets | $ | 1,107,967 | $ | 995,271 | $ | 435,616 | $ | 353,486 | $ | 672,351 | $ | 641,785 | |||||||||||||||||||||||
The Company recorded $63.0 million, $58.2 million and $58.2 million of amortization expense during the years ended December 31, 2025, 2024 and 2023, respectively. Amortization expense is recorded within SG&A in the Company’s Consolidated Statements of Operations. Estimated annual aggregate amortization expense for the subsequent five years is as follows:
| For the year ended December 31, 2026 | $ | 64,010 | |||
| For the year ended December 31, 2027 | 63,670 | ||||
| For the year ended December 31, 2028 | 63,195 | ||||
| For the year ended December 31, 2029 | 62,045 | ||||
| For the year ended December 31, 2030 | 60,897 | ||||
As of December 31, 2025 and December 31, 2024, the Company had indefinite-lived intangible assets for trademarks and tradenames totaling $201.2 million and $185.3 million, respectively.
The Company completes its annual goodwill and indefinite-lived intangible asset impairment tests during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment in one or more of its reporting units. During the second quarter of 2025, the Company concluded that the negative impacts of the lower than projected financial performance, driven by the continuation of soft end market conditions, as well as an increase in the Company’s cost of capital, driven by uncertainty around the potential negative impacts of tariffs, represented a triggering event for the Company’s EMEA reporting unit and the associated goodwill, as well as the related asset group. As a result of this conclusion, the Company completed an interim quantitative impairment assessment as of June 30, 2025 for its EMEA reporting unit and the related asset group. The Company concluded that the undiscounted cash flows exceeded the carrying value of the EMEA asset group, and therefore that the long-lived assets are not impaired. In completing a quantitative goodwill impairment test, the Company compares the reporting unit’s fair value, based on future discounted cash flows, to its carrying value in order to determine if an impairment of goodwill exists. The estimates of future discounted cash flows involve considerable judgment and are based upon certain significant assumptions including the weighted average cost of capital (“WACC”) as well as projected EBITDA, which includes assumptions related to revenue growth rates, gross margin levels and operating expenses. As a result of the impact of the uncertainty around tariffs, and continued soft end market conditions driving lower current year EMEA earnings and a decline in projected future EMEA earnings, as well as an increase in the WACC assumption utilized in the Company’s 2024 annual impairment assessment, the Company concluded that the estimated fair value of the EMEA reporting unit was less than its carrying value. As a result, a pre-tax, non-cash impairment charge of $88.8 million ($86.7 million after-tax) to write down the remaining carrying value amount of the EMEA reporting unit Goodwill was recorded in the second quarter of 2025, reflected in “Impairment charges” in the Consolidated Statements of Operations for the year ended December 31, 2025.
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.