Note 2. Acquisitions

2013 Acquisitions

On November 1, 2013, through our wholly-owned subsidiary American Metals Corporation, we acquired all of the capital stock of Haskins Steel Co., Inc. ("Haskins Steel"), located in Spokane, Washington. Founded in 1955, Haskins Steel processes and distributes primarily carbon steel and aluminum products of various shapes and sizes to a diverse customer base in the Pacific Northwest. Their in-house processing capabilities include shearing, sawing, burning and forming. Net sales of Haskins Steel during the period from November 1, 2013 through December 31, 2013 were $4.3 million.

On April 30, 2013, we acquired Travel Main Holdings, LLC ("Travel Main"), a real estate holding company with a portfolio of 18 real estate properties, all of which are leased by certain of our subsidiaries. The transaction value of $78.9 million included the assumption of $43.8 million of indebtedness. The cash portion of the purchase price was funded with borrowings on our revolving credit facility.

On April 12, 2013, we acquired all the outstanding shares of Metals USA Holdings Corp. ("Metals USA"). Metals USA is one of the largest metals service center businesses in the United States and a leading provider of value-added processed aluminum, brass, copper, carbon steel, stainless steel, manufactured metal components and inventory management services. Metals USA sells its products and services to a diverse customer base and broad range of end markets, including the aerospace, auto, defense, heavy equipment, marine transportation, commercial construction, office furniture manufacturing, energy and oilfield service industries, among several others. This acquisition added a total of 44 service centers strategically located throughout the United States to our existing operations and complements our existing customer base, product mix and geographic footprint. Net sales of Metals USA during the period from April 13, 2013 through December 31, 2013 were $1.24 billion.

The purchase price for Metals USA of $766.8 million along with assumed debt of $486.1 million represents a total transaction value of approximately $1.25 billion. We funded the transaction and refinanced all but $12.3 million of Metals USA's debt with proceeds from our $500.0 million term loan, which we entered into in April 2013, and our April 2013 $500.0 million senior notes offering, with the balance drawn on our existing $1.5 billion revolving credit facility (see Note 8). For the year ended December 31, 2013, we incurred approximately $11.4 million in transaction related costs, which are included in Warehouse, delivery, selling, general and administrative expenses.

As of December 31, 2013, the preliminary allocation of the total purchase price of Metals USA to the fair values of assets acquired and liabilities assumed is as follows:

	(in millions)

Cash	$	3.2
Accounts receivable		206.0
Inventories		379.5
Property, plant and equipment		242.6
Goodwill		381.5
Intangible assets subject to amortization		137.6
Intangible assets not subject to amortization		203.0
Other current and long-term assets		9.1


Total assets acquired		1,562.5


Current and long-term debt		486.1
Deferred taxes		184.4
Other current and long-term liabilities		125.2


Total liabilities assumed		795.7


Net assets acquired	$	766.8

2012 Acquisitions

On 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 located in Fort Payne, Alabama that will allow Feralloy to better serve the increasing demands of its diverse customer base. GH operates as a wholly owned subsidiary of Feralloy and had net sales of $59.1 million for the year ended December 31, 2013.

On 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, headquartered in Houston, Texas with an additional location in Lafayette, Louisiana. Sunbelt had net sales of $43.2 million for the year ended December 31, 2013.

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. Airport Metals had net sales of $2.8 million for the year ended December 31, 2013.

On 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 Vonore location had net sales of $2.7 million for the year ended December 31, 2013.

On 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 with additional locations in Anaheim, California; Buford, Georgia; Tulsa, Oklahoma and Mexico City, Mexico. NSA had net sales of $77.2 million for the year ended December 31, 2013.

On 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 provides a full range of metal perforating and fabrication services to customers located primarily in the U.S. McKey had net sales of $18.9 million for the year ended December 31, 2013.

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 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

On 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 $414.1 million for the year ended December 31, 2013. 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

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, 2013 or 2012, as applicable. The purchase price allocations for the 2013 acquisitions are preliminary and are pending the completion of various pre-acquisition period income tax returns. The measurement periods for purchase price allocations do not exceed 12 months from the acquisition date.

As part of the purchase price allocations of the 2013, 2012 and 2011 acquisitions, $206.8 million, $37.9 million and $70.6 million, respectively, were allocated to the trade names acquired, $1.0 million of which is subject to amortization. We determined that substantially all of 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 2013, 2012 and 2011 acquisitions of $135.3 million, $44.3 million and $101.8 million, respectively, with weighted average lives of 12.5, 10.0 and 10.0 years, respectively. The goodwill arising from our 2013, 2012, and 2011 acquisitions consists largely of the synergies and economies of scale expected from the combined operations. Tax deductible goodwill from our 2013, 2012 and 2011 acquisitions amounted to $106.7 million, $30.3 million, and $4.5 million, respectively. Total tax deductible goodwill amounted to approximately $554.6 million as of December 31, 2013.

Pro forma financial information

The following pro forma summary financial results present the consolidated results of operations as if the acquisition of Metals USA had occurred as of January 1, 2012, after the effect of certain adjustments, including interest expense on the acquisition debt, non-recurring acquisition related costs, and amortization of certain identifiable intangible assets. The pro forma summary financial results reflect Metals USA's historical method for inventory valuation, which was the first-in, first-out (FIFO) method for the majority of its inventories. Metals USA adopted the last-in, first-out (LIFO) method of inventory valuation upon acquisition. The pro forma summary financial results for the year ended December 31, 2013 excluded approximately $48.7 million of acquisition and related costs.

The pro forma results have been presented for comparative purposes only and are not indicative of what would have occurred had the Metals USA acquisition been made as of January 1, 2012, or of any potential results which may occur in the future.

	Year Ended December 31, 2013		Year Ended December 31, 2012

	(in millions, except per share amounts)		(in millions, except per share amounts)
Pro forma:
Net sales	$	9,753.8	$	10,425.9
Net income attributable to Reliance	$	328.9	$	444.8
Diluted earnings per common share attributable to Reliance shareholders	$	4.24	$	5.88
Basic earnings per common share atrributable to Reliance shareholders	$	4.28	$	5.91