ACQUISITIONS AND DIVESTITURES

3 Months Ended

Mar. 31, 2022

ACQUISITIONS AND DIVESTITURES [Abstract]

Note 16: Acquisitions and Divestitures

BUSINESS ACQUISITIONS

2022 BUSINESS ACQUISITIONS — During the first quarter of 2022, we purchased the following operations for total consideration of $193.5 million:

Texas — five aggregates facilities (includes three production stage properties, one development stage property and one sales yard)

The 2022 acquisitions listed above are reported in our consolidated financial statements as of their respective acquisition dates. None of these acquisitions were material to our results of operations or financial position either individually or collectively. The fair value of consideration transferred for these 2022 acquisitions and the preliminary amounts (pending final appraisals of intangible assets and property, plant & equipment and related deferred taxes) of assets acquired and liabilities assumed are summarized below:



	March 31
in millions	2022
Fair Value of Purchase Consideration
Cash	$ 148.2
Payable to seller	45.3
Total fair value of purchase consideration	$ 193.5
Identifiable Assets Acquired and Liabilities Assumed
Accounts and notes receivable, net	$ 4.5
Inventories	4.5
Property, plant & equipment	178.5
Intangible assets
Contractual rights in place	9.0
Liabilities assumed	(3.0)
Net identifiable assets acquired	$ 193.5
Goodwill	$ 0.0

As a result of the 2022 acquisitions, we recognized $9.0 million of amortizable intangible assets and no goodwill. The amortizable intangible assets will be amortized against earnings over a weighted-average 7.1 years and $9.0 million will be deductible for income tax purposes over 15 years.

2021 BUSINESS ACQUISITIONS — On August 26, 2021, we purchased the following operations in connection with the acquisition of U.S. Concrete, Inc. for total consideration of $1,634.5 million, net of cash acquired:

British Columbia, Canada — aggregates and aggregates blue-water transportation operations

California — aggregates distribution terminals and concrete operations

New Jersey — aggregates and concrete operations

New York — aggregates and concrete operations

Oklahoma — aggregates and concrete operations

Pennsylvania — concrete operations

Texas — aggregates and concrete operations

U.S. Virgin Islands — aggregates and concrete operations

Washington, D.C. — concrete operations

The unaudited pro forma financial information in the table below summarizes the results of operations for Vulcan and U.S. Concrete as if they were combined as of January 1, 2020. The pro forma financial information does not reflect any cost savings, operating efficiencies or synergies as a result of this combination. Consistent with the assumed acquisition date of January 1, 2020, the pro forma information excludes transactions between Vulcan and U.S. Concrete. The following pro forma information also includes 1) charges directly attributable to the acquisition, 2) cost of sales related to the sale of acquired inventory marked up to fair value, 3) depreciation, depletion, amortization & accretion expense related to the mark up to fair value of acquired assets and 4) interest expense and debt retirement costs reflecting the new debt structure:



	Three Months Ended
	March 31
in millions		2021
Supplemental Pro Forma Results
Total revenues		$ 1,345.5
Net earnings attributable to Vulcan		$ 149.4

The unaudited pro forma results above may not be indicative of the results that would have been obtained had this acquisition occurred at the beginning of 2020, nor does it intend to be a projection of future results.

The fair value of consideration transferred for the U.S. Concrete acquisition and the preliminary amounts (pending final appraisals of intangible assets and property, plant & equipment and related deferred taxes) of assets acquired and liabilities assumed are summarized below:



	March 31
in millions	2022
Fair Value of Purchase Consideration
Cash ¹	$ 1,634.5
Total fair value of purchase consideration	$ 1,634.5
Identifiable Assets Acquired and Liabilities Assumed
Accounts and notes receivable, net	$ 237.8
Inventories	80.6
Other current assets	8.6
Property, plant & equipment	1,086.2
Operating lease right-of-use assets	216.4
Intangible assets
Contractual rights in place	622.6
Other intangibles	60.3
Other noncurrent assets	5.3
Deferred income taxes, net	(223.1)
Debt assumed	(443.7)
Other liabilities assumed	(531.3)
Noncontrolling interest	(22.3)
Net identifiable assets acquired	$ 1,097.4
Goodwill	$ 537.1


¹	Includes $1,268.5 million paid to acquire all issued and outstanding shares of U.S. Concrete common stock and $384.4 million of U.S. Concrete obligations paid on the acquisition date, less $18.4 million of cash acquired.

Additionally, during 2021, we purchased concrete operations in California for total consideration of $4.9 million.

As a collective result of the 2021 acquisitions, we recognized $685.5 million of amortizable intangible assets and $537.1 million of goodwill (including an increase of $12.5 million from December 31, 2021). The amortizable intangible assets will be amortized against earnings over a weighted-average period in excess of 15 years. The $537.1 million of goodwill recognized represents deferred tax liabilities generated from carrying over the seller’s tax basis in the assets acquired and synergies expected to be realized from acquiring an established business with assets that have been assembled over a long period of time — the collection of those assets combined with our assets can earn a higher rate of return than either individually. Of the total goodwill recognized, $115.6 million will be deductible for income tax purposes.

DIVESTITURES AND PENDING DIVESTITURES

We had no significant divestitures through the three months ended March 31, 2022.

In 2021, we sold:

First quarter — a reclaimed quarry in Southern California resulting in a pretax gain of $114.7 million (net of a $12.9 million contingency and other directly related obligations)

No material assets met the criteria for held for sale at March 31, 2022, December 31, 2021 or March 31, 2021.