Acquisitions

6 Months Ended

Jun. 30, 2012

Acquisitions [Abstract]

Acquisitions

3. Acquisitions

In 2011 and during the first six months of 2012, Basic acquired either substantially all of the assets or all of the outstanding capital stock of each of the following businesses, each of which was accounted for using the purchase method of accounting. The following table summarizes the provisional values for the Mayo Marrs Casing Pulling, Inc., SPA Victoria, LP and Surface Stac, Inc. acquisitions and the final values for the remaining acquisitions at the date of acquisition (in thousands):

	Closing Date		Total Cash Paid (net of cash acquired)
Lone Star Anchor Trucking, Inc.		July 7, 2011	$	10,102
Maverick Stimulation Company, LLC, Maverick Coil Tubing Services, LLC, Maverick Thru-Tubing, LLC, Maverick Solutions, LLC, The Maverick Companies, LLC, MCM Holdings, LLC, and MSM Leasing LLC (collectively the “Maverick Companies”)		July 8, 2011	$	186,251
Pat’s P&A, Inc.		August 1, 2011	$	8,974
Cryogas Services LLP		September 8, 2011	$	11,085
Total 2011			$	216,412
Mayo Marrs Casing Pulling, Inc.		January 13, 2012	$	6,644
SPA Victoria, LP		March 16, 2012	$	11,966
Surface Stac, Inc.		May 15, 2012	$	23,184
Total 2012			$	41,794

The operations of each of the acquisitions listed above are included in Basic’s statement of operations as of each respective closing date. The acquisition of the Maverick Companies in July 2011 has been deemed significant and is discussed below in further detail. The pro forma effect of the remainder of the acquisitions completed in 2011 or completed in the first six months of 2012 is not material, either individually or when aggregated, to the reported results of operations.

Basic allocates the purchase price of its acquisitions to identifiable tangible and intangible assets acquired based on their estimated fair values. The excess of purchase price over the aggregate fair values is recorded as goodwill. Property and equipment are valued based on a combination of a market approach and replacement cost. Intangible assets are valued using a discounted cash flows model. Current assets and liabilities are recorded at face value, which approximates fair value.

The Maverick Companies

        On July 8, 2011, Basic acquired all of the equity interests of the Maverick Companies. The results of the Maverick Companies’ operations have been included in the financial statements since that date. The amount of revenue included in the consolidated statement of operations during the first six months of 2012 was $68.1 million. The aggregate purchase price was approximately $186.3 million in cash.

This acquisition allowed Basic to expand its stimulation, coiled tubing, and thru-tubing business in Colorado, New Mexico, Utah, and Oklahoma. This acquisition also allowed Basic to enter the water treatment business. The Maverick Companies operates in Basic’s completion and remedial segment. The following table summarizes the final estimated fair value of the assets acquired and liabilities assumed at the date of acquisition for the Maverick Companies (in thousands):

Current Assets	$	17,112
Property and Equipment		92,856
Other Intangible Assets (1)		29,400
Goodwill (2)		59,047
Other Non-Current Assets		464
Total Assets Acquired	$	198,879
Current Liabilities	$	10,490
Deferred Income Taxes		—
Total Liabilities Assumed	$	10,490
Net Assets Acquired	$	188,389

(1) Other intangible assets consists of customer relationship of $25.3 million, amortizable over 15 years, non-compete agreements of $3.6 million, amortizable over five years, intellectual property of $380,000, amortizable over 15 years, and trade name of $170,000 with an indefinite life.

(2) Goodwill is primarily attributable to operational and cost synergies expected to be realized from the acquisition by integrating Maverick’s equipment and assembled workforce. All of the goodwill is expected to be deductible for tax purposes.

The following unaudited pro forma results of operations have been prepared as though the Maverick Companies acquisition had been completed on January 1, 2010. Pro forma amounts are based on the purchase price allocation of the significant acquisition and are not necessarily indicative of the results that may be reported in the future (in thousands, except per share data):

	Six Months Ended June 30, 2011
Revenues	$	596,863
Net income	$	1,223
Earnings per common share - basic	$	0.03
Earnings per common share - diluted	$	0.03

In preparing the pro forma financials, Basic added $6.3 million of depreciation for the six months ended June 30, 2011. Amortization expense, for the amortization of intangible assets, of $1.2 million was included for the six months ended June 30, 2011. Interest expense of $6.5 million was included for the six months ended June 30, 2011.