Note 5 - Acquisition

6 Months Ended

Jun. 30, 2013

Business Combination Disclosure [Text Block]

Business Combination Disclosure [Text Block]

Note 5 – Acquisition

In December 2012, we completed the acquisition of substantially all assets and operations of Alliance Drilling Fluids, LLC (“Alliance”), a provider of drilling fluids, proppant distribution, and related services headquartered in Midland, Texas. Total cash consideration at closing was approximately $53 million, which was funded through borrowings on our revolving credit facility. The purchase price is subject to further adjustments, based upon actual working capital conveyed. Additional consideration up to $4.3 million may be payable based on the profitability of the proppant distribution business over the two-year period following the acquisition.

The transaction has been recorded using the acquisition method of accounting and accordingly, assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The excess of the total consideration, including projected additional consideration, was recorded as goodwill and includes the value of the assembled workforce. While the initial purchase price allocation has been completed, the allocation of the purchase price is subject to change for a period of one year following the acquisition. The following table summarizes the amounts recognized for assets acquired and liabilities assumed as of the December 31, 2012 acquisition date.

(In thousands)
Receivables, net	$	22,822
Inventories		5,779
Property, plant and equipment, net		4,932
Goodwill		13,268
Customer relationships		17,807
Tradename		2,090
Employment contracts		1,625
Deferred tax asset		203
Total assets acquired	$	68,526
Accounts payable	$	7,002
Accrued liabilities		4,149
Other noncurrent liabilities		4,300
Total liabilities assumed	$	15,451
Total cash conveyed at closing	$	53,075

The other non-current liabilities balance above includes $4.3 million of post-closing payments due to the seller, reflecting the expected contingent consideration described above.