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Business Combinations (Tables) | 9 Months Ended
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Sep. 30, 2018
Business Combinations [Abstract] |
Schedule of Business Combinations | As part of our ongoing strategy to expand geographically and increase market share in certain markets, we completed eight business combinations and one minor acquisition merged into existing operations during the nine months ended September 30, 2018 and seven business combinations and two minor acquisitions merged into existing operations during the nine months ended September 30, 2017, respectively, in which we acquired 100% of the ownership interests in each. The largest of these acquisitions were Custom Overhead Door, LLC dba Custom Door & Gate (collectively, “CDG”) in March 2018, Trilok Industries, Inc., Alpha Insulation and Waterproofing Inc. and Alpha Insulation and Waterproofing Company (collectively, “Alpha”) in January 2017, Columbia Shelving & Mirror, Inc. and Charleston Shelving & Mirror, Inc. (collectively, “Columbia”) in June 2017, and All In Insulation, LLC d/b/a/ Astro Insulation (collectively, “Astro”) in September 2017. The remaining acquisitions were individually insignificant, but material in the aggregate, and are included in “Other” within each table below. Net Income, as noted below, includes amortization, taxes and interest allocations when appropriate. For the three and nine months ended September 30, 2018 (in thousands):
|  |  |  |  |  |  |  |  |  |  |  |  |  | Total Purchase Price |  |  | Three months ended |  |  | Nine months ended |
|  |  |  |  | Acquisition |  |  |  |  |  | Seller |  |  | September 30, 2018 |  |  | September 30, 2018 |
2018 Acquisitions |  | Date |  |  | Type |  |  | Cash Paid |  |  | Obligations |  |  | Revenue |  |  | Net Income |  |  | Revenue |  |  | Net Income |
CDG |  |  | 3/19/2018 |  |  |  | Asset |  |  | $ | 9,440 |  |  | $ | 1,973 |  |  | $ | 11,413 |  |  | $ | 3,848 |  |  | $ | 164 |  |  | $ | 7,572 |  |  | $ | 229 |
Other |  |  | Various |  |  |  | Shares/Asset |  |  |  | 25,242 |  |  |  | 3,447 |  |  |  | 28,689 |  |  |  | 7,003 |  |  |  | 42 |  |  |  | 12,782 |  |  |  | 423 |
Total |  |  |  |  |  |  |  |  |  | $ | 34,682 |  |  | $ | 5,420 |  |  | $ | 40,102 |  |  | $ | 10,851 |  |  | $ | 206 |  |  | $ | 20,354 |  |  | $ | 652 |
For the three and nine months ended September 30, 2017 (in thousands):
|  |  |  |  |  |  |  |  |  |  |  |  |  | Fair Value of Common Stock |  |  | Total Purchase Price |  |  | Three months ended September 30, 2017 |  |  | Nine months ended September 30, 2017 |
2017 Acquisitions |  | Date |  |  | Acquisition Type |  |  | Cash Paid |  |  | Seller Obligations |  |  | Revenue |  |  | Net (Loss) Income |  |  | Revenue |  |  | Net Income |
Alpha(1) |  |  | 1/5/2017 |  |  |  | Share |  |  | $ | 103,810 |  |  | $ | 2,002 |  |  | $ | 10,859 |  |  | $ | 116,671 |  |  | $ | 29,334 |  |  | $ | (271 | ) |  | $ | 87,830 |  |  | $ | 190 |
Columbia |  |  | 6/26/2017 |  |  |  | Asset |  |  |  | 8,768 |  |  |  | 225 |  |  |  | — |  |  |  | 8,993 |  |  |  | 3,026 |  |  |  | 73 |  |  |  | 3,241 |  |  |  | 80 |
Astro |  |  | 9/18/2017 |  |  |  | Asset |  |  |  | 9,144 |  |  |  | 482 |  |  |  | — |  |  |  | 9,626 |  |  |  | 264 |  |  |  | 46 |  |  |  | 264 |  |  |  | 46 |
Other |  |  | Various |  |  |  | Asset |  |  |  | 9,812 |  |  |  | 1,042 |  |  |  | — |  |  |  | 10,854 |  |  |  | 6,499 |  |  |  | 84 |  |  |  | 11,671 |  |  |  | 366 |
Total |  |  |  |  |  |  |  |  |  | $ | 131,534 |  |  | $ | 3,751 |  |  | $ | 10,859 |  |  | $ | 146,144 |  |  | $ | 39,123 |  |  | $ | (68 | ) |  | $ | 103,006 |  |  | $ | 682 |
(1) | The cash paid included $21.7 million in contingent consideration to satisfy purchase price adjustments related to cash and net working capital requirements, earnout consideration based on Alpha’s change in EBITDA from 2015 and a customary holdback. These payments were based on fair value of each contingent payment at the time of acquisition and subsequently adjusted during the measurement period. We issued 282,577 shares of our common stock with a fair value of $10.9 million.
Summary of Estimated Fair Value of Assets Acquired and Liabilities Assumed | The estimated fair values of the assets acquired and liabilities assumed for the acquisitions, as well as total purchase prices and cash paid, approximated the following as of September 30 (in thousands):
|  | 2018 |  |  | 2017 |
|  | CDG |  |  | Other |  |  | Total |  |  | Alpha |  |  | Columbia |  |  | Astro |  |  | Other |  |  | Total |
Estimated fair values: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 247 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 247 |
Accounts receivable |  |  | 1,731 |  |  |  | 3,306 |  |  |  | 5,037 |  |  |  | 29,851 |  |  |  | 989 |  |  |  | 924 |  |  |  | 2,070 |  |  |  | 33,834 |
Inventories |  |  | 514 |  |  |  | 1,027 |  |  |  | 1,541 |  |  |  | 1,852 |  |  |  | 704 |  |  |  | 296 |  |  |  | 1,014 |  |  |  | 3,866 |
Other current assets |  |  | 28 |  |  |  | 892 |  |  |  | 920 |  |  |  | 4,500 |  |  |  | 8 |  |  |  | 36 |  |  |  | 8 |  |  |  | 4,552 |
Property and equipment |  |  | 933 |  |  |  | 1,893 |  |  |  | 2,826 |  |  |  | 1,528 |  |  |  | 659 |  |  |  | 640 |  |  |  | 1,144 |  |  |  | 3,971 |
Intangibles |  |  | 3,711 |  |  |  | 16,681 |  |  |  | 20,392 |  |  |  | 57,200 |  |  |  | 4,760 |  |  |  | 5,168 |  |  |  | 5,939 |  |  |  | 73,067 |
Goodwill |  |  | 4,898 |  |  |  | 6,873 |  |  |  | 11,771 |  |  |  | 38,511 |  |  |  | 2,209 |  |  |  | 2,932 |  |  |  | 2,472 |  |  |  | 46,124 |
Other non-current assets |  |  | 36 |  |  |  | 19 |  |  |  | 55 |  |  |  | 383 |  |  |  | 36 |  |  |  | — |  |  |  | 176 |  |  |  | 595 |
Accounts payable and other current liabilities |  |  | (438 | ) |  |  | (2,002 | ) |  |  | (2,440 | ) |  |  | (17,401 | ) |  |  | (372 | ) |  |  | (370 | ) |  |  | (1,969 | ) |  |  | (20,112 | )
Fair value of assets acquired and purchase price |  |  | 11,413 |  |  |  | 28,689 |  |  |  | 40,102 |  |  |  | 116,671 |  |  |  | 8,993 |  |  |  | 9,626 |  |  |  | 10,854 |  |  |  | 146,144 |
Less fair value of common stock issued |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10,859 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10,859 |
Less seller obligations |  |  | 1,973 |  |  |  | 3,447 |  |  |  | 5,420 |  |  |  | 2,002 |  |  |  | 225 |  |  |  | 482 |  |  |  | 1,042 |  |  |  | 3,751 |
Cash paid |  | $ | 9,440 |  |  | $ | 25,242 |  |  | $ | 34,682 |  |  | $ | 103,810 |  |  | $ | 8,768 |  |  | $ | 9,144 |  |  | $ | 9,812 |  |  | $ | 131,534 |
Estimates of Acquired Intangible Assets | Estimates of acquired intangible assets related to the acquisitions are as follows for the nine months ended September 30 (dollars in thousands):
|  | 2018 |  |  | 2017 |
Acquired intangibles assets |  | Estimated Fair Value |  |  | Weighted Average Estimated Useful Life (yrs.) |  |  | Estimated Fair Value |  |  | Weighted Average Estimated Useful Life (yrs.) |
Customer relationships |  | $ | 14,480 |  |  |  | 8 |  |  | $ | 37,533 |  |  |  | 8 |
Trademarks and trade names |  |  | 3,920 |  |  |  | 14 |  |  |  | 19,403 |  |  |  | 15 |
Non-competition agreements |  |  | 1,530 |  |  |  | 5 |  |  |  | 2,429 |  |  |  | 5 |
Backlog |  |  | 460 |  |  |  | 2 |  |  |  | 13,400 |  |  |  | 1.5 |
Pro Forma Results of Operations | The unaudited pro forma information for the combined results of the Company has been prepared as if the 2018 acquisitions had taken place on January 1, 2017 and the 2017 acquisitions had taken place on January 1, 2016. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transactions actually taken place on January 1, 2017 and 2016, respectively, and the unaudited pro forma information does not purport to be indicative of future financial operating results (in thousands, except per share data):
|  | Unaudited pro forma for the three months ended September 30, |  |  | Unaudited pro forma for the nine months ended September 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Net revenue |  | $ | 353,609 |  |  | $ | 316,382 |  |  | $ | 1,006,313 |  |  | $ | 906,283 |
Net income |  |  | 16,215 |  |  |  | 13,020 |  |  |  | 40,305 |  |  |  | 34,277 |
Basic and diluted net income per share |  |  | 0.52 |  |  |  | 0.41 |  |  |  | 1.28 |  |  |  | 1.08 |

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