BUSINESS COMBINATIONS

12 Months Ended

Dec. 31, 2013

BUSINESS COMBINATIONS

2.    BUSINESS COMBINATIONS

During 2013, the Company acquired the assets of Blue Dot Energy Services, LLC (“Blue Dot”) and Bulldog Frac Rentals LLC (“Bulldog”) (the “2013 Acquisitions”), providers of parts distribution, rental equipment and on-site services to the oil and gas industry for a net purchase price of $114.6. The acquisitions expand the Consumables Management Segment (“CMS”) distribution and logistics business into the oil and gas services industry. During 2012, the Company completed two acquisitions for a net aggregate purchase price of approximately $649.7 (“2012 Acquisitions”). During 2011, the Company completed four insignificant acquisitions to bolster key technologies for an aggregate purchase price of approximately $60.4  (“2011 Acquisitions”). During 2011, the Company also sold two insignificant businesses for $19.2 which resulted in a $0.1 gain. Each acquisition and disposition was a cash transaction.

The 2013, 2012 and 2011 Acquisitions were accounted for as purchases under FASB ASC 805, Business Combinations (“ASC 805”). The assets purchased and liabilities assumed for the 2013, 2012 and 2011 Acquisitions have been reflected in the accompanying consolidated balance sheet as of December 31, 2013 and the results of operations for the 2013, 2012 and 2011 Acquisitions and the 2011 dispositions are included in (or excluded from) the accompanying consolidated statements of earnings from the respective dates of acquisition (or disposition).

On January 30, 2012, the Company acquired 100% of the outstanding stock of UFC Aerospace Corp. (“UFC”), a provider of complex supply chain management and inventory logistics solutions, for a net purchase price of approximately $404.7.

The Company completed its evaluation and allocation of the purchase price for the UFC acquisition during the period ended December 31, 2012, which resulted in an adjustment to the allocation of the UFC purchase price to increase goodwill and to increase accrued liabilities by approximately $30.5 related to certain customer contracts which were priced below market and a portion of which were generating losses. These contracts have durations of up to four years. The excess of the purchase price over the fair value of the identifiable assets acquired approximated $347.3 of which $55.1 was allocated to identified intangible assets and $292.2 is included in goodwill.

On July 26, 2012, the Company acquired 100% of Interturbine Aviation Logistics GmbH, Interturbine Logistics Solutions GmbH and Interturbine Technologies GmbH (collectively “Interturbine”), a provider of material management logistical services to global airlines and maintenance, repair and overhaul (“MRO”) providers, for a net purchase price of approximately $245.0. Interturbine’s product range includes chemicals, lubricants, hydraulic fluids, adhesives, coatings and composites. Interturbine also supplies fasteners, cables and wires, electronic components, electrical and electromechanical materials, tools, hot bonding equipment and ground equipment to its primary customer base of airlines and MRO providers globally.

The Company completed its evaluation and allocation of the purchase price for the Interturbine acquisition during the period ended December 31, 2013, which increased goodwill by $4.6 for certain tax liabilities. The excess of the purchase price over the fair value of the identifiable assets acquired approximated $229.9 of which $59.2 was allocated to identified intangible assets and $170.7 is included in goodwill.

The Company has not yet finalized its allocation of the purchase price for the 2013 Acquisitions as the valuation of certain assets and liabilities is not yet complete.

The following table summarizes the current estimates of fair values of assets acquired and liabilities assumed in the 2013 Acquisitions in accordance with ASC 805, which are currently recorded based on management’s estimates as follows:

Accounts receivable-trade	$	10.9
Inventories		3.9
Other current and non-current assets		0.2
Property and equipment		34.3
Goodwill		58.7
Identified intangibles		17.1
Accounts payable		(9.9	)
Other current and non-current liabilities		(0.6	)
Total purchase price	$	114.6

The majority of the goodwill and other intangible assets related to the UFC and 2013 Acquisitions is expected to be deductible for tax purposes. None of the goodwill and other intangible assets related to the Interturbine acquisition is expected to be deductible for tax purposes.
 

Consolidated unaudited pro forma revenues, net earnings and diluted net earnings per share giving effect to the 2012 Acquisitions as if they had occurred on January 1, 2011 were $3,172.4, $241.0, and $2.34, and $2,786.2, $245.4 and $2.41, for the years ended December 31, 2012 and 2011, respectively. Blue Dot and Bulldog pro forma revenues, net earnings, and net earnings per diluted share as well as post acquisition stand-alone revenues and operating earnings are not material to the Company’s financial statements.