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Acquisitions

12 Months Ended

Dec. 31, 2020

Note 2. Acquisitions

2019 Acquisition

On December 31, 2019, we acquired Fry Steel Company (“Fry Steel”). Fry Steel is a general line and long bar distributor located in Santa Fe Springs, California. Fry Steel performs cutting services on its diverse product assortment and provides “in-stock” next day delivery of its products. Fry Steel’s net sales in 2020 were $76.1 million.

We funded our acquisition of Fry Steel with borrowings on our revolving credit facility and cash on hand.

The allocation of the total purchase price for our 2019 acquisition of Fry Steel to the fair values of the assets acquired and liabilities assumed was as follows:


	(in millions)
Cash	$	17.1
Accounts receivable		5.7
Inventories		39.3
Property, plant and equipment		29.9
Goodwill		60.5
Intangible assets subject to amortization		26.0
Intangible assets not subject to amortization		30.3
Other current and long-term assets		0.3
Total assets acquired		209.1
Other current and long-term liabilities		8.3
Total liabilities assumed		8.3
Net assets acquired	$	200.8

2018 Acquisitions

On November 1, 2018, we acquired All Metals Holding, LLC, including its operating subsidiaries All Metals Processing & Logistics, Inc. and All Metals Transportation and Logistics, Inc. (collectively, “All Metals”). All Metals is headquartered in Spartanburg, South Carolina with an additional facility in Cartersville, Georgia. All Metals specializes in toll processing for automotive, construction, appliance and other end markets, and provides value-added transportation and logistics services for metal products from six strategically located terminals throughout the southeastern United States. All Metals’ net sales were $25.3 million in 2020.

On August 1, 2018, we acquired KMS Fab, LLC and KMS South, Inc. (collectively, “KMS” or the “KMS Companies”). The KMS Companies are headquartered in Luzerne, Pennsylvania. The KMS Companies specialize in precision sheet metal fabrication ranging from prototypes to large production runs which utilize a wide variety of metals and fabrication methods including laser cutting, stamping, turret punching, machining, powder coating and welding. KMS’ net sales were $18.8 million in 2020.

On March 1, 2018, we acquired DuBose National Energy Services, Inc. (“DuBose Energy”) and its affiliate, DuBose National Energy Fasteners & Machined Parts, Inc. (“DuBose Fasteners” and, together with DuBose Energy, “DuBose”). DuBose is headquartered in Clinton, North Carolina. DuBose specializes in fabrication, supply and distribution of metal and metal products to the nuclear industry, including utilities, component manufacturers and contractors. DuBose’s net sales were $47.4 million in 2020.

We funded our 2018 acquisitions with borrowings on our revolving credit facility and cash on hand.

The allocation of the total purchase price for our 2018 acquisitions to the fair values of the assets acquired and liabilities assumed was as follows:


	(in millions)
Cash	$	2.4
Accounts receivable		13.1
Inventories		10.0
Property, plant and equipment		20.1
Goodwill		32.9
Intangible assets subject to amortization		25.0
Intangible assets not subject to amortization		18.3
Other current and long-term assets		1.1
Total assets acquired		122.9
Current and long-term debt		25.9
Deferred taxes		5.4
Other current and long-term liabilities		9.6
Total liabilities assumed		40.9
Net assets acquired	$	82.0

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, 2020 or 2019, as applicable. The measurement periods for purchase price allocations do not exceed 12 months from the acquisition date.

As part of the purchase price allocations for the acquisitions completed in 2020 and 2018, $30.3 million and $18.3 million, respectively, were allocated to the trade names acquired. We determined that 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 the 2019 and 2018 acquisitions of $26.0 million and $24.8 million, respectively, with weighted average lives of 10.0 years. The goodwill arising from our 2019 and 2018 acquisitions consists largely of expected strategic benefits, including enhanced financial and operational scale, as well as expansion of acquired product and processing know-how across our enterprise. Goodwill of $60.8 million from our 2019 acquisition is deductible for tax purposes. Total goodwill deductible for tax purposes was $752.6 million as of December 31, 2020.