Note 3 – Acquisitions

On June 1, 2017, Greenbrier and Astra Holding GmbH (Astra) contributed their European operations to a newly formed company, Greenbrier-Astra Rail, a Europe-based freight railcar manufacturing, engineering and repair business. As consideration for an approximate 75% controlling interest, Greenbrier agreed to pay Astra €30 million at closing and €30 million 12 months after closing and issue an approximate 25% noncontrolling interest in the new company. The total net assets acquired of $114.6 million includes $38.3 million representing the fair value of the noncontrolling interest at the acquisition date.

Astra also received a put option to sell its entire noncontrolling interest to Greenbrier at an exercise price equal to the higher of fair value or a defined EBITDA multiple as measured on the exercise date. The option is exercisable 30 days prior to and up until June 1, 2022. Due to Astra’s redemption right under the put option, the noncontrolling interest has been classified as a Contingently redeemable noncontrolling interest in the mezzanine section of the Consolidated Balance Sheets. The carrying value of the noncontrolling interest cannot be less than the maximum redemption amount, which is the amount Greenbrier will settle the put option for if exercised. Adjustments to reconcile the carrying value to the maximum redemption amount are recorded to retained earnings. There were no such adjustments during the period ended August 31, 2017.

For the period from acquisition through August 31, 2017, the European operations contributed by Astra generated revenues of $23.9 million and losses from operations of $3.0 million, which are reported in the Company’s consolidated financial statements as part of the Manufacturing segment. The impact of the acquisition was not material to the Company’s consolidated results of operations, therefore pro forma financial information has not been included.

The allocation of the purchase price among certain assets and liabilities is still in process. As a result, the allocation is preliminary and subject to further refinement upon completion of the analysis and valuation. The preliminary allocation of the purchase price based on the fair value of the net assets acquired from Astra was as follows as of June 1, 2017:


(in thousands)
Cash and cash equivalents	$	6,562
Accounts receivable		10,984
Inventories		30,130
Property, plant and equipment		74,332
Intangibles and other assets		17,624
Goodwill		25,325

Total assets acquired		164,957
Accounts payable and accrued liabilities		17,879
Deferred income taxes		7,137
Deferred revenue		964
Notes payable		24,382

Total liabilities assumed		50,362

Net assets acquired	$	114,595