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ACQUISITION | 3 Months Ended
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Nov. 30, 2018
Business Combinations [Abstract] |
Acquisition | NOTE 2. ACQUISITION On November 5, 2018 (the "Acquisition Date"), we completed the acquisition of 33 rebar fabrication facilities in the United States, as well as four electric-arc furnace mini mills located in Knoxville, Tennessee; Jacksonville, Florida; Sayreville, New Jersey and Rancho Cucamonga, California from Gerdau S.A., hereinafter collectively referred to as the "Acquired Businesses". The total cash purchase price, including working capital adjustments, was $701.2 million, subject to customary purchase price adjustments, and was funded through a combination of domestic cash on-hand and borrowings under the 2018 Term Loan, as defined in Note 9, Credit Arrangements. The Company accounts for business combinations by recognizing the assets acquired and liabilities assumed at the Acquisition Date fair value. In valuing acquired assets and liabilities, fair value estimates use Level 3 inputs, including expected future cash flows and discount rates. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the Acquisition Date, the Company’s estimates are inherently uncertain and subject to refinement. The results of operations of the Acquired Businesses are reflected in the Company’s condensed consolidated financial statements from the Acquisition Date. The purchase price allocation is subject to change as the Company obtains additional information during the allowable one year measurement period (the "Measurement Period") about the facts and circumstances that existed as of the Acquisition Date. The following table summarizes the fair values of the assets acquired and the liabilities assumed on the Acquisition Date.
(in thousands) |  | November 5, 2018
Cash and cash equivalents |  | $ | 6,399 |
Accounts receivable |  | 308,074 |
Inventories |  | 207,648 |
Other current assets |  | 11,788 |
Property, plant and equipment |  | 424,541 |
Intangible assets |  | 10,252 |
Deferred income taxes |  | 10,567 |
Accounts payable-trade, accrued expenses and other payables |  | (128,183 | )
Acquired unfavorable contract backlog |  | (133,600 | )
Other long-term liabilities |  | (9,920 | )
Pension and other post retirement employment benefits |  | (6,365 | )
Total assets acquired and liabilities assumed |  | $ | 701,201 |
The amortizable intangible assets (liabilities) acquired consisted of:
(in thousands, except life in years) |  | Life in Years |  | Preliminary Fair Value
Non-compete agreement |  | 5 years |  | $ | 7,769 |
Net unfavorable lease contracts |  | Various |  | (2,516 | )
Favorable contract backlog |  | 1 year |  | 2,294 |
Unfavorable contract backlog |  | 1-2 years* |  | (133,600 | )
* Amortization will correspond with completion of the acquired contracts, which is estimated to occur over the next 1 to 2 years. Financial Results The following table summarizes the financial results of the Acquired Businesses from the Acquisition Date through the end of the first quarter of fiscal 2019 that are included in the Company’s condensed consolidated statement of earnings and condensed consolidated statement of comprehensive income.
(in thousands) |  | November 30, 2018
Net sales |  | $ | 121,499 |
Earnings before income taxes |  | $ | 8,427 |
Pro Forma Supplemental Information Supplemental information on an unaudited pro forma basis is presented below for the three months ended November 30, 2018 and 2017 as if the acquisition of the Acquired Businesses occurred on September 1, 2017. The pro forma financial information is presented for comparative purposes only, based on certain estimates and assumptions, which the Company believes to be reasonable, but not necessarily indicative of future results of operations or the results that would have been reported if the acquisition of the Acquired Businesses had been completed on September 1, 2017. These results were not used as a part of management analysis of the financial results and performance of the Company’s business. These results are adjusted, where possible, for transaction and integration related costs. These results involve a significant amount of estimates.
|  | Three Months Ended November 30,
(in thousands) |  | 2018 |  | 2017*
Pro forma net sales |  | 1,557,032 |  |  | 1,417,583 |
Pro forma net earnings |  | 38,059 |  |  | (4,749 | )
*Non-recurring acquisition and integration costs of approximately $43.3 million incurred through the first quarter of fiscal 2019 have been included in pro forma net earnings for the three months ended November 30, 2017.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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