Note 2. Acquisitions

2012 Acquisitions

Effective October 1, 2012, through our wholly owned subsidiary Feralloy Corporation ("Feralloy"), we acquired all the outstanding capital stock of GH Metal Solutions, Inc. (formerly known as The Gas House, Inc.) ("GH"), a value added processor and fabricator of carbon steel products, that will allow Feralloy to better serve the increasing demands of its diverse customer base. GH, located in Fort Payne, Alabama, was founded in 1958 and has grown its processing equipment to include flat-bed lasers, tube lasers, torches, shears, automatic band saws, CNC press brakes, coil-fed and hand-fed stampers, robotic and manual welders, and a painting line. GH operates as a wholly owned subsidiary of Feralloy and had net sales of $12.6 million for the three months ended December 31, 2012.

Effective October 1, 2012, we acquired all the outstanding limited liability company interests of Sunbelt Steel Texas, LLC ("Sunbelt"), a value added distributor of special alloy steel bar and heavy-wall tubing products to the oil and gas industry. Sunbelt was founded in 1986 and is headquartered in Houston, Texas with an additional location in Lafayette, Louisiana. Sunbelt increases our growing exposure to the energy market in high end, niche products serving customers across multiple oil and gas well drilling types, including vertical, horizontal, directional, and deepwater drilling applications. Sunbelt had net sales of $12.5 million for the three months ended December 31, 2012.

On July 6, 2012, we acquired substantially all of the assets of Airport Metals (Australia) Pty Ltd., a subsidiary of Samuel Son & Co., Limited, through our newly-formed subsidiary Bralco Metals (Australia) Pty Ltd. ("Airport Metals"). Airport Metals, based in Melbourne, operates as a stocking distributor of aircraft materials and supplies. The addition of Airport Metals is our first entry into Australia and enhances our ability to service important aerospace customers in that area. Net sales of Airport Metals during the period from July 6, 2012 through December 31, 2012 were $1.4 million.

Effective April, 27, 2012, through our wholly owned subsidiary Precision Strip, Inc. ("PSI"), we acquired the assets of the Worthington Steel Vonore, Tennessee plant, a processing facility owned by Worthington Industries, Inc. The Vonore plant operates as a PSI location which processes and delivers carbon steel, aluminum and stainless steel products on a "toll" basis, processing the metal for a fee without taking ownership of the metal. The addition of the Vonore location to PSI's existing footprint of facilities allows PSI to better service its customer base in an important geographic area of the country. The Vonore location's net sales during the period from April 27, 2012 through December 31, 2012 were $1.6 million.

Effective April 3, 2012, we acquired all the outstanding limited liability company interests of National Specialty Alloys, LLC ("NSA"), a global specialty alloy processor and distributor of premium stainless steel and nickel alloy bars and shapes, headquartered in Houston, Texas. In addition to enhancing our existing product offerings with the addition of specialty stainless steel and nickel products, NSA also expands and complements our growing exposure to the energy market. NSA was founded in 1985 and has additional locations in Anaheim, California; Buford, Georgia; Tulsa, Oklahoma and Mexico City, Mexico. Net sales of NSA during the period from April 3, 2012 through December 31, 2012 were $68.0 million.

Effective February 1, 2012, through our wholly owned subsidiary Diamond Manufacturing Company, we acquired McKey Perforating Co., Inc. ("McKey"), headquartered in New Berlin, Wisconsin and its subsidiary, McKey Perforated Products Co., Inc., located in Manchester, Tennessee. McKey was founded in 1867 and provides a full range of metal perforating and fabrication services to customers located primarily in the U.S. McKey and Diamond Manufacturing Company are working together to leverage their combined expertise in the perforated metal market and further expand our presence within that market. McKey had net sales of $18.6 million for the eleven months ended December 31, 2012.

The combined transaction value of our 2012 acquisitions was $226.5 million, which included the assumption and repayment of $59.4 million of debt. We funded these acquisitions with borrowings on our revolving credit facility.

The preliminary allocation of the total purchase price of our 2012 acquisitions to the fair values of the assets acquired and liabilities assumed is as follows:

	(in millions)

Cash	$	0.2
Accounts receivable		32.5
Inventories		55.0
Property, plant and equipment		30.7
Goodwill		68.0
Intangible assets subject to amortization		45.1
Intangible assets not subject to amortization		37.9
Other current and long-term assets		1.2

Total assets acquired		270.6

Current and long-term debt		59.4
Deferred taxes		20.6
Other current and long-term liabilities		23.5

Total liabilities assumed		103.5

Net assets acquired	$	167.1

2011 Acquisition

Effective August 1, 2011, we acquired all the outstanding capital securities of Continental Alloys & Services, Inc. ("Continental"), headquartered in Houston, Texas, and certain affiliated companies. Continental is a leading global materials management company focused on high-end steel and alloy pipe, tube and bar products and precision manufacturing of various tools designed for well completion programs of global energy service companies and has 12 locations in seven countries including Canada, Malaysia, Mexico, Singapore, the U.A.E., the United Kingdom, and the United States. This acquisition aligns well with our diversification strategy by increasing our exposure to the energy (oil and gas) market, including the addition of Oil Country Tubular Goods ("OCTG") products, new processing capabilities, and entry into new international markets. Continental and its affiliates had combined net sales of approximately $442.4 million for the year ended December 31, 2012. The allocation of the total purchase price of Continental to the fair values of the assets acquired and liabilities assumed is as follows:

	(in millions)

Cash	$	22.8
Accounts receivable		55.7
Inventories		125.9
Property, plant and equipment		28.8
Goodwill		138.5
Intangible assets subject to amortization		103.7
Intangible assets not subject to amortization		70.6
Other current and long-term assets		1.8

Total assets acquired		547.8

Current and long-term debt		104.7
Deferred taxes		56.9
Other current and long-term liabilities		50.1

Total liabilities assumed		211.7

Net assets acquired	$	336.1

2010 Acquisitions

On December 1, 2010, through our subsidiary American Metals Corporation, we acquired all of the outstanding capital stock of Lampros Steel, Inc. ("LSI") and a related interest in Lampros Steel Plate Distribution, LLC ("LSPD"). LSI specializes in structural steel shapes with a facility located in Portland, Oregon. LSPD owns a 50% interest in an unconsolidated partnership, LSI Plate that is a distributor of carbon steel plate with locations in California and Oregon. Effective February 2011, the business conducted by LSI Plate was moved to LSI in order to achieve certain operational efficiencies. Net sales of LSI for the year ended December 31, 2012 were approximately $38.1 million.

On October 1, 2010, we acquired all of the outstanding capital stock of Diamond Consolidated Industries, Inc. and affiliated companies ("Diamond"), which now operate under the corporate name Diamond Manufacturing Company. The operating divisions consist of Diamond Manufacturing Company located in Wyoming, Pennsylvania and Diamond Manufacturing Midwest in Michigan City, Indiana both of which specialize in the manufacture and sale of specialty engineered perforated materials; Perforated Metals Plus, a distributor of perforated metals located in Charlotte, North Carolina; and Dependable Punch, a manufacturer of custom punches for tools and dies also located in Wyoming, Pennsylvania. This acquisition expanded our product and processing offerings with the addition of perforated metals. An operating division of Diamond was opened near Dallas, Texas in early 2011 to expand Diamond's geographic reach. Net sales of Diamond for the year ended December 31, 2012 were $96.1 million.

We funded our 2010 acquisitions with borrowings of approximately $100.3 million on our revolving credit facility. The allocation of the total purchase price of LSI and Diamond to the fair values of the assets acquired and liabilities assumed is as follows:

	(in millions)

Cash	$	3.6
Accounts receivable		14.9
Inventories		17.4
Property, plant and equipment		19.9
Goodwill		26.4
Intangible assets subject to amortization		31.7
Intangible assets not subject to amortization		22.7
Other current and long-term assets		3.7

Total assets acquired		140.3

Current and long-term debt		22.6
Other current and long-term liabilities		13.8

Total liabilities assumed		36.4

Net assets acquired	$	103.9

Summary purchase price allocation information for all acquisitions

All of the acquisitions discussed in this note have been accounted for under the acquisition method of accounting and, accordingly, each purchase price has been allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of each acquisition. The accompanying consolidated statements of income include the revenues and expenses of each acquisition since its respective acquisition date. The consolidated balance sheets reflect the allocations of each acquisition's purchase price as of December 31, 2012 or 2011, as applicable. The purchase price allocations for the 2012 acquisitions are preliminary and are pending the completion of various pre- and post-acquisition period income tax returns.

As part of the purchase price allocations of the 2012, 2011 and 2010 acquisitions, $37.9 million, $70.6 million and $22.7 million, respectively, were allocated to the trade names acquired, none of which is subject to amortization. We determined that the trade names acquired in connection with these acquisitions had indefinite lives since their economic lives are expected to approximate the life of each company acquired. Additionally, we recorded other identifiable intangible assets related to customer relationships for 2012, 2011 and 2010 acquisitions of $44.3 million, $101.8 million and $31.5 million, respectively, with weighted average lives of 10.0, 10.0 and 12.3 years, respectively. Tax deductible goodwill from our 2012, 2011 and 2010 acquisitions amounted to $30.3 million, $4.5 million, and $26.5 million, respectively. Total tax deductible goodwill amounted to approximately $441.1 million as of December 31, 2012.