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SPIG ACQUISITION (Tables)
 9 Months Ended
Sep. 30, 2016
Acquired Finite-Lived Intangible Assets [Line Items]  
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]
The goodwill arising from the purchase price allocation of the SPIG acquisition is believed to be a result of the synergies created from combining its operations with B&W's, and the growth it can provide from its wide scope of engineered cooling and service offerings and customer base. None of this goodwill is expected to be deductible for tax purposes.
The intangible assets included above consist of the following (dollar amount in millions):
(in thousands)
Estimated
Fair Value
 
Weighted Average
Estimated Useful Life
(in Years)
Customer relationships
$
12,217

 
9
Backlog
17,769

 
2
Trade names / trademarks
8,885

 
20
Technology
14,438

 
10
Non-compete agreements
1,666

 
3
Internally-developed software
189

 
3
Total amortizable intangible assets
$
55,164

 
 
Business Acquisition, Pro Forma Information [Table Text Block]
SPIG ACQUISITION
On July 1, 2016, we acquired all of the outstanding stock of SPIG S.p.A. ("SPIG") for €155 million (approximately $172.1 million) in an all-cash transaction, which was subject to post-closing adjustments. During September 2016, €2.6 million (approximately $2.9 million) of the transaction price was returned to B&W based on the difference between the actual working capital and pre-close estimates. Transaction costs included in the purchase price associated with closing the acquisition of SPIG on July 1, 2016 were approximately $0.3 million.

Based in Arona, Italy, SPIG is a global provider of custom-engineered comprehensive dry and wet cooling solutions and aftermarket services to the power generation industry including natural gas-fired and renewable energy power plants, as well as downstream oil and gas, petrochemical and other industrial end markets. The acquisition of SPIG is consistent with B&W's goal to grow and diversify its technology-based offerings with new products and services that are complementary to our core businesses in the industrial markets. In the three months ended September 30, 2016, SPIG contributed $38.3 million of revenue and $4.2 million of gross profit to the Industrial segment.

We accounted for the SPIG acquisition using the acquisition method. All of the assets acquired and liabilities assumed were recognized at their estimated fair value as of the acquisition date. Any excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill. Several valuation methods were used to determine the fair value of the assets acquired and liabilities assumed. For intangible assets, we used the income method, which required us to forecast the expected future net cash flows for each intangible asset. These cash flows were then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the projected cash flows. Some of the more significant estimates and assumptions inherent in the income method include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows and the assessment of the asset's economic life and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory or economic barriers to entry. Determining the useful life of an intangible asset also required judgment as different types of intangible assets will have different useful lives, or indefinite useful lives.

The allocation of the purchase price, based on the estimated fair value of assets acquired and liabilities assumed, is detailed below. B&W is in the process of finalizing the purchase price allocation associated with the valuation of certain intangible assets and deferred tax balances; thus, the provisional measurements of intangible assets, goodwill and deferred income tax balances are subject to change. Purchase price adjustments are expected to be finalized by December 31, 2016.
(in thousands)
Estimated Acquisition Date Fair Value
Cash
$
25,994

Accounts receivable
58,843

Contracts in progress
61,155

Inventories
2,554

Other assets
7,341

Property, plant and equipment
6,104

Goodwill
69,862

Identifiable intangible assets
55,164

Deferred income tax assets
5,550

Revolving debt
(27,530
)
Current liabilities
(55,873
)
Advance billings on contracts
(15,226
)
Other noncurrent liabilities
(379
)
Deferred income tax liabilities
(16,831
)
Noncontrolling interest in joint venture
(7,754
)
Net acquisition cost
$
168,974


The goodwill arising from the purchase price allocation of the SPIG acquisition is believed to be a result of the synergies created from combining its operations with B&W's, and the growth it can provide from its wide scope of engineered cooling and service offerings and customer base. None of this goodwill is expected to be deductible for tax purposes.
The intangible assets included above consist of the following (dollar amount in millions):
(in thousands)
Estimated
Fair Value
 
Weighted Average
Estimated Useful Life
(in Years)
Customer relationships
$
12,217

 
9
Backlog
17,769

 
2
Trade names / trademarks
8,885

 
20
Technology
14,438

 
10
Non-compete agreements
1,666

 
3
Internally-developed software
189

 
3
Total amortizable intangible assets
$
55,164

 
 

The acquisition of SPIG added $7.1 million of intangible asset amortization expense during the three months ended September 30, 2016. Amortization of intangible assets is not allocated to segment results.

Approximately $0.8 million and $2.8 million of acquisition and integration related costs of SPIG were recorded as selling, general and administrative expenses in the condensed consolidated and combined statement of operations for the three and nine months ended September 30, 2016, respectively.

The following unaudited pro-forma financial information below represents our results of operations for the three months ended September 30, 2015, twelve months ended December 31, 2015 and nine months ended September 30, 2015 and 2016 had the SPIG acquisition occurred on January 1, 2015. The unaudited pro-forma financial information below is not intended to represent or be indicative of our actual consolidated results had we completed the acquisition at January 1, 2015. This information should not be taken as representative of our future consolidated results of operations.
 
 
Three Months Ended
September 30,
 
Twelve Months Ended
December 31,
 
Nine Months Ended 
 September 30,
(in thousands)
 
2015
 
2015
 
2016
 
2015
Revenues
 
$
462,954

 
$
1,941,987

 
$
1,321,446

 
$
1,362,864

Net income (loss) attributable to B&W
 
1,614

 
12,047

 
(48,168
)
 
12,051

Basic earnings per common share
 
0.03

 
0.23

 
(0.95
)
 
0.22

Diluted earnings per common share
 
0.03

 
0.22

 
(0.95
)
 
0.22
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]
The allocation of the purchase price, based on the estimated fair value of assets acquired and liabilities assumed, is detailed below. B&W is in the process of finalizing the purchase price allocation associated with the valuation of certain intangible assets and deferred tax balances; thus, the provisional measurements of intangible assets, goodwill and deferred income tax balances are subject to change. Purchase price adjustments are expected to be finalized by December 31, 2016.
(in thousands)
Estimated Acquisition Date Fair Value
Cash
$
25,994

Accounts receivable
58,843

Contracts in progress
61,155

Inventories
2,554

Other assets
7,341

Property, plant and equipment
6,104

Goodwill
69,862

Identifiable intangible assets
55,164

Deferred income tax assets
5,550

Revolving debt
(27,530
)
Current liabilities
(55,873
)
Advance billings on contracts
(15,226
)
Other noncurrent liabilities
(379
)
Deferred income tax liabilities
(16,831
)
Noncontrolling interest in joint venture
(7,754
)
Net acquisition cost
$
168,974