UNIVERSAL ACQUISITION (Tables)

6 Months Ended

Jun. 30, 2017

Business Acquisition [Line Items]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

(in thousands)	Estimated acquisition date fair value
Cash	$	4,379
Accounts receivable	11,270
Contracts in progress	3,167
Inventories	4,585
Other assets	579
Property, plant and equipment	16,692
Goodwill	14,413
Identifiable intangible assets	19,500
Deferred income tax assets	935
Current liabilities	(10,833		)
Other noncurrent liabilities	(1,423		)
Deferred income tax liabilities	(6,338		)
Net acquisition cost	$	56,926

Business Acquisition, Pro Forma Information [Table Text Block]

ACQUISITION

On January 11, 2017, we acquired Universal Acoustic & Emission Technologies, Inc. ("Universal") for approximately $52.5 million in cash, funded primarily by borrowings under our United States revolving credit facility, net of $4.4 million cash acquired in the business combination. Transaction costs included in the purchase price were approximately $0.2 million. We accounted for the Universal acquisition using the acquisition method, whereby all of the assets acquired and liabilities assumed were recognized at their fair value on the acquisition date, with any excess of the purchase price over the estimated fair value recorded as goodwill. In order to purchase Universal on January 11, 2017, we borrowed approximately $55.0 million under the United States revolving credit facility in 2017.

Universal provides custom-engineered acoustic, emission and filtration solutions to the natural gas power generation, mid-stream natural gas pipeline, locomotive and general industrial end-markets. Universal's product offering includes gas turbine inlet and exhaust systems, silencers, filters and enclosures. Universal employs approximately 460 people, mainly in the United States and Mexico. The acquisition of Universal is consistent with our goal to grow and diversify our technology-based offerings with new products and services in the industrial markets that are complementary to our core businesses. During 2017, we will integrate Universal with our Industrial segment. Universal contributed $12.6 million and $33.8 million of revenue to our operating results during the three and six months ended June 30, 2017, respectively. Universal contributed $1.9 million and $6.8 million of gross profit (excluding intangible asset amortization expense of $0.6 million and $2.1 million) to our operating results in the three and six months ended June 30, 2017, respectively. We expect Universal to contribute over $80.0 million of revenue and be accretive to the Industrial segment's gross profit during 2017.

The allocation of the purchase price based on the estimated fair value of assets acquired and liabilities assumed is set forth below. We are in the process of finalizing the purchase price allocation associated with the valuation of certain intangible assets and deferred tax balances; as a result, 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, 2017.

(in thousands)	Estimated acquisition date fair value
Cash	$	4,379
Accounts receivable	11,270
Contracts in progress	3,167
Inventories	4,585
Other assets	579
Property, plant and equipment	16,692
Goodwill	14,413
Identifiable intangible assets	19,500
Deferred income tax assets	935
Current liabilities	(10,833		)
Other noncurrent liabilities	(1,423		)
Deferred income tax liabilities	(6,338		)
Net acquisition cost	$	56,926

The intangible assets included above consist of the following (dollar amount in thousands):

(in thousands)	Estimated fair value		Weighted average estimated useful life (in years)
Customer relationships	$	10,800	15
Backlog	1,700		1
Trade names / trademarks	3,000		20
Technology	4,000		7
Total amortizable intangible assets	$	19,500

The acquisition of Universal resulted in an increase in our intangible asset amortization expense during the three and six months ended June 30, 2017 of $0.6 million and $2.1 million, respectively, which is included in cost of operations in our condensed consolidated statement of operations. Amortization of intangible assets is not allocated to segment results.

Approximately $0.4 million and $1.4 million of acquisition and integration related costs of Universal was recorded as a component of our operating expenses in the condensed consolidated statement of operations in the three and six months ended June 30, 2017.

The following unaudited pro forma financial information below represents our results of operations for the three and six months ended June 30, 2016 and 12 months ended December 31, 2016 had the Universal acquisition occurred on January 1, 2016. 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, 2016. This information should not be taken as representative of our future consolidated results of operations.

	Three months ended			Six months ended			Twelve months ended
(in thousands)	June 30, 2016			June 30, 2016			December 31, 2016
Revenues	$	404,120		$	828,493		$	1,660,986
Net income (loss) attributable to B&W	(62,963		)	(52,361		)	(113,940		)
Basic earnings per common share	(1.24		)	(1.02		)	(2.27		)
Diluted earnings per common share	(1.24		)	(1.02		)	(2.27		)

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The intangible assets included above consist of the following (dollar amount in thousands):

(in thousands)	Estimated fair value		Weighted average estimated useful life (in years)
Customer relationships	$	10,800	15
Backlog	1,700		1
Trade names / trademarks	3,000		20
Technology	4,000		7
Total amortizable intangible assets	$	19,500