2. ACQUISITIONS

In August 2012, Team’s subsidiary, Quest Integrity Group (“Quest”), acquired a specialty remote digital video inspection company based in New Zealand for approximately $2.7 million. Most of the purchase price was provisionally allocated to customer relationships. In September 2012, Team also acquired the common stock of TCI Services, Inc. (“TCI”) for approximately $23.8 million of which $16.1 million was cash paid at closing and $7.7 million was deferred payments. TCI is a company based in Oklahoma specializing in the inspection and repair of above ground storage tanks. Based upon the provisional purchase price allocation associated with the acquisition of TCI, we have recorded a net increase of $4.1 million in net working capital, an increase of $3.1 million in fixed assets, $8.0 million in intangible assets classified as customer relationships, $8.6 million in goodwill, $1 million in other current liabilities and $6.7 million in other long-term liabilities. The $1 million in current liabilities and $6.7 million in other long-term liabilities represent future consideration to be paid of which $3 million is contingent upon the future performance of TCI. The combined unaudited annual revenues for both acquired businesses are approximately $24 million in their most recently completed fiscal years and the total consideration for both is expected to be approximately $26 million, subject to adjustments for working capital true-ups and the future performance of the businesses.

In fiscal year 2012, we completed two small acquisitions for a total of $19.4 million which were recorded as an increase of $1.2 million in net working capital, $3.0 million in fixed assets, $7.5 million in intangible assets classified as customer relationships and $7.7 million in goodwill. Both acquisitions were financed through borrowings on our banking credit facility. We performed purchase price allocations based on our most current assessments of fair value of the assets acquired and the liabilities assumed. We completed a final valuation report of intangibles and goodwill associated with these transactions during the first half of fiscal year 2013. The final purchase price allocation associated with both of these transactions did not result in a material adjustment in fiscal year 2013.

On November 3, 2010, we purchased Quest, a privately held advanced inspection services and engineering assessment company. We effectively purchased 95% of Quest and expect to purchase the remaining 5% in fiscal year 2015 for a purchase consideration based upon the future financial performance of Quest as defined in the purchase agreement. Future consideration would be payable in unregistered shares of our common stock for an aggregate value of no less than $2.4 million, provided the aggregate value of the consideration does not exceed 20% of our outstanding common stock. Our valuation of the remaining 5% equity of Quest at the date of acquisition was $4.9 million, which is reflected in the shareholders’ equity section of the Consolidated Balance Sheet as “Non-controlling interest.”

Information regarding the change in carrying value of the non-controlling interest is set forth below (in thousands):


Fair value of non-controlling interest at November 3, 2010	$	4,917
Income attributable to non-controlling interest		371
Other comprehensive income attributable to non-controlling interest		12

Carrying value of non-controlling interest at November 30, 2012	$	5,300