On November 5, 2018 (the "Acquisition Date"), the Company completed the acquisition (the "Acquisition") of 33 rebar fabrication facilities in the U.S., as well as four EAF mini mills located in Knoxville, Tennessee, Jacksonville, Florida, Sayreville, New Jersey and Rancho Cucamonga, California from Gerdau S.A., hereinafter collectively referred to as the "Acquired Businesses." The total cash purchase price, including working capital adjustments made within the allowable one-year measurement period, was $701.2 million, and was funded through a combination of domestic cash on-hand and borrowings under the Term Loan (as defined in Note 10, Credit Arrangements).

The results of operations of the Acquired Businesses were reflected in the Company’s consolidated financial statements from the Acquisition Date. The Acquired Businesses' net sales and earnings before income taxes included in the Company's consolidated statement of earnings and consolidated statement of comprehensive income in 2019 were $1.4 billion and $132.7 million, respectively.

The purchase price paid was allocated between the acquired mills and fabrication facilities' assets acquired and liabilities assumed at fair value and was finalized on November 5, 2019. The table below presents the allocation of the fair value to the Acquired Businesses' assets and liabilities as determined by the Company:


(in thousands)	Fair Value
Cash and cash equivalents	$	6,399
Accounts receivable	296,459
Inventories	202,082
Other current assets	26,290
Property, plant and equipment	421,969

Deferred income taxes	9,155
Accounts payable-trade, accrued expenses and other payables	(134,702)
Acquired unfavorable contract backlog	(110,166)
Other long-term liabilities	(9,920)
Pension and other post retirement employment benefits	(6,365)
Total assets acquired and liabilities assumed	$	701,201

The Company recorded a $32.1 million charge due to a working capital adjustment related to the Acquisition. This charge was recorded subsequent to the end of the allowable one-year measurement period in selling, general and administrative expenses on the consolidated statements of earnings in 2020. The related liability was recorded in accrued expenses and other payables as of August 31, 2020.

Supplemental information on an unaudited pro forma basis is presented below as if the Acquisition occurred on September 1, 2017. The pro forma financial information is presented for comparative purposes only, based on significant estimates and assumptions, which the Company believes to be reasonable, but not necessarily indicative of future results of operations or the results that would have been reported if the Acquisition had been completed on September 1, 2017. These results were not used as part of management analysis of the financial results and performance of the Company or the Acquired Businesses. These results are adjusted, where possible, for transaction and integration-related costs.

(1) Pro forma net sales for the year ended August 31, 2018 includes estimated fair value adjustments related to amortization of unfavorable contract backlog. The impact of the amortization of unfavorable contract backlog has been removed from the pro forma net sales for the year ended August 31, 2019.

(2) Pro forma net earnings for the year ended August 31, 2018 reflects the impact of fair value adjustments related to the amortization of unfavorable contract backlog described above and includes estimated fair value adjustments related to inventory step-up, as well as non-recurring acquisition and integration costs of approximately $51.7 million.

On July 21, 2020, the Company acquired substantially all of the assets of AZZ's Continuous Galvanized Rebar business ("GalvaBar") located in Tulsa, Oklahoma. GalvaBar manufactures galvanized rebar with a zinc alloy coating produced through a proprietary process to provide corrosion protection and post-fabrication formability. This acquisition complements the Company's existing concrete reinforcement capabilities. The operating results of GalvaBar are included in the North America segment.

On February 3, 2020, the Company's subsidiary CMC Poland Sp. z.o.o. ("CMCP") acquired P.P.U. Ecosteel Sp. z.o.o. ("Ecosteel"), a steel mesh producer located in Zawiercie, Poland. This acquisition complements CMCP's existing mesh production and increases sales to other markets in Europe. The operating results of Ecosteel are included in the Europe segment.

On October 26, 2017, the Company completed the purchase of substantially all of the assets of MMFX Technologies Corporation ("MMFX"). MMFX markets, sells and licenses the production of proprietary specialty steel products. The operating results of MMFX are included in the North America segment.

The acquisitions of GalvaBar, Ecosteel and MMFX were not material individually, or in the aggregate, to the Company's financial position or results of operations; therefore pro-forma operating results and other disclosures for the acquisitions are not presented as the results would not be significantly different than reported results.

In October 2019, the Company closed the melting operations at its Rancho Cucamonga facility, which is part of the North America segment. In August 2020, the Company announced plans to sell its Rancho Cucamonga facility. This disposition does not meet the criteria for discontinued operations or held for sale accounting. Due to these announcements, the Company recorded $9.8 million of expense related to severance, pension curtailment and vendor agreement terminations.

In the third quarter of 2018, the Company sold substantially all of the assets of its structural steel fabrication operations, which were part of the North America segment. The disposition did not meet the criteria for discontinued operations. Proceeds associated with the sale were $20.3 million. As a result of the sale of these assets, the Company recorded impairment charges of $13.7 million. The signed definitive asset sale agreement and subsequent post-closing adjustments (Level 2) were the basis for the determination of fair value of these operations.

In 2018, the remaining operations related to the Company's steel trading businesses in the U.S. and Asia were substantially wound down and the Company sold certain assets and liabilities of its Australian steel trading business. As a result of the Company's exit of its trading and distribution businesses in Australia, the Company prepared an impairment analysis on the asset disposal groups. Indicators of value from other recent sales of similar businesses within the segment (Level 3) were the basis for the determination of fair value of this component. As a result of this analysis, the Company recorded impairment charges of $2.1 million in 2018 resulting in an overall transaction loss, including selling costs, of $5.3 million. This loss was primarily due to accumulated foreign currency translation losses. The results of these activities are included in discontinued operations in the consolidated statements of earnings.

The major classes of line items constituting earnings from discontinued operations in the consolidated statements of earnings for 2018 are presented in the table below. Earnings (loss) from discontinued operations in the consolidated statements of earnings were immaterial in 2020 and 2019.


(in thousands)	Year Ended August 31, 2018
Net sales	$	304,650
Costs and expenses:
Cost of goods sold	276,184
Selling, general and administrative expenses	25,317

Interest expense	(86)
Earnings before income taxes	3,235
Income taxes benefit	(34)
Earnings from discontinued operations	$	3,269

The Company recorded $6.7 million of severance expense related to discontinued operations for 2018. These costs related to the Company's closure of marketing and distribution offices that resulted in involuntary employee termination benefits. Severance expense recorded in 2020 and 2019 related to discontinued operations was immaterial.