Note 3 – Acquisitions

On August 20, 2018, the Company entered into a dissolution agreement with Watco Companies, LLC, its previous joint venture partner, to discontinue their GBW Railcar Services railcar repair joint venture. Pursuant to the dissolution agreement, previously operated Greenbrier repair shops and associated employees were returned to the Company. Additionally, the dissolution agreement provides that certain agreements entered into in connection with the original creation of GBW in 2014 were terminated as of the transaction date, including the leases of real and personal property, service agreements, and certain employment-related agreements. GBW will complete its cessation of activities in an orderly manner in fiscal 2019.

As the assets received and liabilities assumed from GBW meet the definition of a business, the Company has accounted for this transaction as a business combination. The total net assets acquired were approximately $56.8 million. Additionally, the Company removed the book value of its remaining equity method investment in, and note receivable due from, the joint venture. The accumulated deficit reflected in GBW’s balance sheet as of August 31, 2018 continues to be funded by the joint venture partners. The Company has included this assumed liability within the purchase price allocation in the table below.

For the three months ended November 30, 2018, the Repair operations contributed by this acquisition generated revenues of $23.9 million and a loss from operations of $1.4 million, which are reported in the Company’s condensed consolidated financial statements as part of the Wheels, Repair & Parts segment. The impact of the acquisition was not material to the Company’s results of operations, therefore pro forma financial information has not been included.

The preliminary allocation of the purchase price based on the fair value of the net assets acquired was:


(in thousands)
Cash and cash equivalents	$	5,000
Accounts receivable, net		12,230
Inventories		18,106
Property, plant and equipment, net		16,748
Intangibles and other assets, net		9,200
Goodwill		7,863

Total assets acquired		69,147
Accounts payable and accrued liabilities		12,394

Total liabilities assumed		12,394

Net assets acquired	$	56,753

Certain liabilities in the table above are estimates and the Company will adjust the purchase price allocation as they are settled.