Note 16: Acquisitions and Divestitures

BUSINESS ACQUISITIONS AND PENDING ACQUISITIONS

During the second quarter of 2017, we announced the pending acquisition of Aggregates USA, LLC, an aggregates business that is composed of 32 facilities (15 aggregates facilities, 16 aggregates rail distribution yards and 1 aggregates truck distribution yard) in Florida, Georgia, South Carolina, Tennessee and Virginia, for $900.0 million in cash. In order to expedite the regulatory approval process, we may divest quarries in Tennessee and Virginia subject to receipt of regulatory approval. We expect to close this acquisition in the fourth quarter of 2017.

During the nine months ended September 30, 2017, we purchased the following for total consideration of $212,406,000:

California — ready-mixed concrete facilities, an aggregates marine distribution yard and building materials yards

Illinois — two aggregates facilities

New Mexico — an aggregates facility

Tennessee — two aggregates facilities, asphalt mix operations and a construction paving business

The 2017 completed acquisitions listed above are reported in our condensed consolidated financial statements as of their respective acquisition dates. None of these acquisitions are material to our results of operations or financial position either individually or collectively.

The fair value of consideration transferred for these acquisitions and the preliminary amounts of assets acquired and liabilities assumed (based on their estimated fair values at their acquisition dates), are summarized below:



	September 30
in thousands	2017
Fair Value of Purchase Consideration
Cash	$ 210,562
Payable to seller	1,844
Total fair value of purchase consideration	$ 212,406
Identifiable Assets Acquired and Liabilities Assumed
Inventories	6,213
Other current assets	253
Property, plant & equipment	126,426
Other intangible assets
Contractual rights in place	73,092
Liabilities assumed	(91)
Net identifiable assets acquired	$ 205,893
Goodwill	$ 6,513

Estimated fair values of assets acquired and liabilities assumed are preliminary pending appraisals of contractual rights in place and property, plant & equipment.

As a result of these 2017 completed acquisitions, we recognized $73,092,000 of amortizable intangible assets (contractual rights in place). These contractual rights in place will be amortized against earnings ($66,630,000 – straight-line over a weighted-average 18.8 years and $6,462,000 – units of sales over an estimated 20 years) and deductible for income tax purposes over 15 years. The goodwill noted above will be deductible for income tax purposes over 15 years.

For the full year 2016, we purchased the following for total consideration of $33,287,000 ($32,537,000 cash and $750,000 payable):

Georgia — a distribution business to complement our aggregates logistics and distribution activities

New Mexico — an asphalt mix operation

Texas — an aggregates facility

None of the 2016 acquisitions listed above are material to our results of operations or financial position either individually or collectively. As a result of these 2016 acquisitions, we recognized $16,670,000 of amortizable intangible assets ($15,213,000 contractual rights in place and $1,457,000 noncompetition agreement). The contractual rights in place are amortized against earnings ($6,798,000 – straight-line over 20 years and $8,415,000 – units of sales over an estimated 20 years) and deductible for income tax purposes over 15 years.

DIVESTITURES AND PENDING DIVESTITURES

No assets met the criteria for held for sale at September 30, 2017, December 31, 2016 or September 30, 2016. However, as stated above, we may divest several quarries in Tennessee in order to expedite the regulatory approval process for the pending Aggregates USA acquisition.