Note 3 - Acquisitions

3 Months Ended

Mar. 31, 2012

Business Combination Disclosure [Text Block]

3.      Acquisitions

On February 9, 2012, the Company acquired the business and assets of Eagle Well Services, Inc., which now operates as Well Services Ltd. (“Well Services”) for an aggregate purchase price of $48.1 million in cash. Well Services engages in the business of workover rig well servicing, including down hole well maintenance and workover, down hole well repairs, well completions, well recompletions, well drill outs and clean outs, and well reentry. Well Services is included in the Company’s oilfield services reporting segment.

The Company accounted for this acquisition as a business combination and the total cash consideration of $48.1 million has been allocated on a preliminary basis to the net assets acquired based on their respective estimated fair values at February 9, 2012 as follows:

	Amount
	(in thousands)
Property and equipment	$	23,842
Intangible assets		14,300
Accrued expenses		(137	)
Total net identifiable assets		38,005
Goodwill		10,126
Net assets acquired	$	48,131

The intangible assets acquired consist of customer relationships, which will be amortized on an accelerated basis over the useful life of ten years. The $10.1 million goodwill arises from the growth potential the Company sees for Well Services, along with expected synergies with the Company’s current oilfield services businesses, and is expected to be deductible for tax purposes. The acquisition-related costs for the purchase of Well Services included in “Selling, general and administrative” expenses in the Condensed Statements of Operations were $0.2 million for the three-month period ended March 31, 2012.

Well Services’ results of operations are included in the accompanying financial statements since the acquisition date. The Company is in the process of completing its assessment of the fair value of net assets acquired from this acquisition. Therefore, the fair values presented are provisional pending completion of the final valuation of the net assets.

Pro Forma Financial Information

The following pro forma financial information presents the combined results of the Company and Well Services, as if the acquisition had occurred at the beginning of the fiscal year ended December 31, 2011. Such pro forma results are not necessarily indicative of what would have actually occurred had the Well Services acquisition been in effect for the entire period. The pro forms results are as follows:

	Three-month Period Ended:
	March 31, 2012			April 1, 2011
	(in thousands)
Net revenues	$	17,887		$	7,721
Net (loss) income attributable to Steel Excel	$	(1,177	)	$	3,816