3. ACQUISITIONS

Inspection Oilfield Services

On March 13, 2015, the Company acquired IOS Holdings, Inc. (“IOS”) for $167,404, net of cash acquired and a net working capital receivable adjustment of $2,363. The purchase agreement includes an earn-out provision for the seller to generate an additional $60,000 of proceeds upon achieving certain levels of EBITDA during the three year period beginning on January 1, 2015. As of September 30, 2015, the Company has not accrued an estimated earn-out obligation based upon a probability weighted valuation model of the projected EBITDA results, which indicates that the minimum target will not be achieved. Approximately $7,600 of the purchase price relates to amounts held in escrow to satisfy potential indemnity claims made under the purchase agreement. IOS is a leading independent provider of tubular management services with operations in every significant oil and gas producing region in the continental United States. The acquisition is included within our Tubular and Energy Services segment from the date of acquisition. See Note 4 with respect to an impairment of the goodwill related to this acquisition.

Tew Holdings, LTD

On January 13, 2015, the Company acquired Tew Holdings, LTD (“Tew”) for $26,467, net of cash acquired. The purchase price includes approximately $4,200 related to working capital and net debt adjustments. The non-domestic cash payment includes approximately $600 which is held in escrow to satisfy potential indemnity claims made under the purchase agreement. Headquartered in Nottingham, UK, Tew provides application engineering solutions primarily to the rail market and other major industries. The results of Tew’s operations are included within the Rail Products and Services segment from the date of acquisition.

Chemtec Energy Services, L.L.C.

On December 30, 2014, the Company acquired Chemtec Energy Services, L.L.C. (“Chemtec”) for $66,719, net of cash received, which is inclusive of $1,867 related to working capital adjustments. The cash payment included $5,000 which is held in escrow to satisfy potential indemnity claims made under the purchase agreement. Chemtec is a domestic manufacturer and turnkey provider of blending, injection, and metering equipment for the oil and gas industry. The acquired business is included within our Tubular and Energy Services segment. See Note 4 with respect to an impairment of the goodwill related to this acquisition.

FWO

On October 29, 2014, the Company acquired FWO, a business of Balfour Beatty Rail GmbH for $1,103, inclusive of a $161 post-closing working capital receivable adjustment. FWO is engaged in the electronic track lubrication and maintenance business and has been included in our Rail Products and Services segment.

Carr Concrete

On July 7, 2014, the Company acquired Carr Concrete Corporation (“Carr”) for $12,480, inclusive of a $189 post-closing purchase price adjustment. Carr is a provider of pre-stressed and precast concrete products located in Waverly, WV and the transaction was funded with cash on hand. Included within the purchase price is $1,000 which is held in escrow to satisfy potential indemnity claims made under the purchase agreement. The results of Carr’s operations are included in our Construction Products segment.

Acquisition Summary

Each transaction was accounted for under the acquisition method of accounting under U.S. generally accepted accounting principles which requires an acquiring entity to recognize, with limited exceptions, all of the assets acquired and liabilities assumed in a transaction at fair value as of the acquisition date. Goodwill primarily represents the value paid for each acquisition’s enhancement to the Company’s product and service offerings and capabilities, as well as a premium payment related to the ability to control the acquired assets. The Company has concluded that intangible assets and goodwill values resulting from the Chemtec, FWO, and Carr transactions will be deductible for tax purposes.

The following unaudited pro forma consolidated income statement presents the Company’s results as if the acquisitions of IOS, Tew, and Chemtec had occurred on January 1, 2014. The 2015 pro forma results include the impact of the current year impairment of goodwill as further described in Note 4.



		Three months ended				Nine months ended
		September, 30				September, 30
		2015		2014		2015		2014
Net sales	$	176,059	$	220,945	$	501,458	$	595,790
Gross profit		36,038		51,582		108,252		136,731
Net (loss) income		(57,422)		13,534		(47,727)		31,669
Diluted (loss) earnings per share
As Reported	$	(5.60)	$	0.88	$	(4.65)	$	1.90
Pro forma	$	(5.60)	$	1.31	$	(4.65)	$	3.07

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:


Allocation of Purchase Price		March 13, 2015 - IOS		January 13, 2015 - Tew		December 30, 2014 - Chemtec		October 29, 2014 - FWO		July 7, 2014 - Carr
Current assets	$	19,877	$	12,125	$	15,528	$	131	$	3,180
Other assets		708		-		-		-		45
Property, plant, and equipment		51,453		2,398		4,705		-		7,648
Goodwill		69,908	*	8,772		22,302	*	971		1,936
Other intangibles		50,354		14,048		33,130		419		1,348
Liabilities assumed		(23,596)		(6,465)		(6,756)		(418)		(1,677)
Total	$	168,704	$	30,878	$	68,909	$	1,103	$	12,480

* - See Note 4 with respect to an impairment of the goodwill related to this acquisition.

Intangible asset values for the acquisitions were finalized during 2015.

The following table summarizes the estimates of the fair values of the identifiable intangible assets acquired:



Intangible Asset		March 13, 2015 - IOS		January 13, 2015 - Tew		December 30, 2014 - Chemtec		October 29, 2014 - FWO		July 7, 2014 - Carr

Trade name	$	2,641	$	870	$	3,149	$	-	$	613
Customer relationships		41,171		10,035		23,934		34		524
Technology		4,364		2,480		4,930		341		87
Non-competition agreements		2,178		663		1,117		44		124
Total identified intangible assets	$	50,354	$	14,048	$	33,130	$	419	$	1,348