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Acquisitions | 12 Months Ended
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Feb. 28, 2022
Business Combinations [Abstract] |
Acquisitions | Acquisitions Fiscal 2022 On February 28, 2022, the Company entered into an agreement to acquire all the outstanding shares of DAAM Galvanizing Co. Ltd. ("DAAM"), a privately held hot-dip galvanizing company based in Edmonton, Alberta Canada, for approximately $36.2 million. DAAM currently operates two galvanizing facilities in Canada; one located in Edmonton, Alberta and a second in Saskatoon, Saskatchewan, as well as a service depot in Calgary, Alberta. The addition of DAAM expanded the Company's geographical coverage in the Northwest and enhanced the scope of metal coatings solutions in Canada. The business is included in the Company's Metal Coatings segment. The goodwill arising from this acquisition was allocated to the Metal Coatings segment and a portion of the goodwill amount is expected to be deductible for income tax purposes. Since the DAAM acquisition was completed on February 28, 2022, the purchase price allocation has not been finalized. As such, the fair values of the assets acquired and liabilities assumed are preliminary and are subject to change. The following table represents the preliminary summary of the assets acquired and liabilities assumed, in aggregate, related to the DAAM acquisition, as of the date of the acquisition (in thousands):
Assets |  |
Accounts receivable |  | $ | 2,576 |
Inventories |  | 2,308 |
Property, plant and equipment |  | 14,436 |
Goodwill |  | 24,498 |
Liabilities |  |
Accounts payable and other accrued liabilities |  | (4,003) |
Deferred tax liabilities |  | (3,596) |
Total purchase price |  | $ | 36,219 |
In January 2022, the Company completed the acquisition of all the assets of Steel Creek Galvanizing Company, LLC ("Steel Creek"), a privately held hot-dip galvanizing company based in Blacksburg, South Carolina, for approximately $25.0 million. The acquisition expanded the Company's geographical reach in metal coatings solutions and extends its ability to support customers in the Southeast region of the United States. The business is included in the Company's Metal Coatings segment. The goodwill arising from this acquisition was allocated to the Metal Coatings segment and is expected to be deductible for income tax purposes. The allocation of the purchase price of Steel Creek has not been completed, and the assets acquired and liabilities assumed are preliminary and subject to change. The following table summarizes the fair values of the preliminary allocation of assets acquired and liabilities assumed, in aggregate, related to the Steel Creek acquisition, as of the date of the acquisition (in thousands):
Assets |  |
Accounts receivable |  | $ | 598 |
Inventories |  | 3,593 |
Property, plant and equipment |  | 15,796 |
Intangibles |  | 872 |
Goodwill |  | 7,732 |
Liabilities |  |
Accounts payable and other accrued liabilities |  | (765) |
Contingent consideration |  | (2,826) |
Total purchase price |  | $ | 25,000 |
In addition to the initial cash payment upon closing, contingent consideration of up to $2.8 million is payable based on the achievement of specified operating results over the three-year period following completion of the acquisition. Fiscal 2021 For fiscal year 2021, the Company completed the acquisition of all the assets of Acme Galvanizing, Inc., which was not significant. Accordingly, disclosures of the purchase price allocations and unaudited pro forma results of operations have not been provided. The goodwill arising from this acquisition was allocated to the Metal Coatings segment and is expected to be deductible for income tax purposes. In addition, in conjunction with the acquisition, the Company assumed liabilities related to environmental remediation of approximately $0.6 million. Fiscal 2020 In April 2019, the Company completed the acquisition of all the outstanding shares of K2 Partners, Inc. ("K2") and Tennessee Galvanizing, Inc. ("Tennessee Galvanizing"), two privately held companies. K2 provides powder coating and electroplating solutions to customers in the Midwest and Southeast from locations in Texas and Florida. Tennessee Galvanizing provides galvanizing solutions to customers throughout the United States. These acquisitions expanded the Company's geographical reach in metal coating solutions and broadened its offerings in strategic markets. The businesses are included in the Company's Metal Coatings segment. The goodwill arising from these acquisitions was allocated to the Metal Coatings segment and is not deductible for income tax purposes. The following table summarizes the fair values of the assets acquired and liabilities assumed, in aggregate, related to the acquisitions in fiscal 2020, as of the date of each respective acquisition (in thousands):
Assets |  |
Accounts receivable |  | $ | 4,591 |
Inventories |  | 1,830 |
Prepaid expenses and other |  | 22 |
Property, plant and equipment |  | 5,336 |
Intangibles |  | 15,512 |
Goodwill |  | 39,419 |
Liabilities |  |
Accounts payable and other accrued liabilities |  | (1,575) |
Contingent consideration |  | (2,000) |
Deferred income taxes |  | (2,507) |
Total purchase price |  | $ | 60,628 |
In addition to the initial cash payment upon closing for the K2 acquisition, contingent consideration of up to $2.0 million is payable based on the achievement of specified operating results over the three-year period following completion of the acquisition. The contingent consideration is expected to be paid in early fiscal 2023. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of each respective acquisition (in thousands):
|  | Fair Value |  | Useful Life
Customer relationships |  | $ | 15,360 |  |  | 15 years
Non-compete agreements |  | 152 |  |  | 3 years
Total intangible assets |  | $ | 15,512 |  |  |
During fiscal 2020, the acquired companies described above generated net sales of $27.9 million and net income of $2.6 million in the Company’s consolidated statements of income from the date of each respective acquisition. The following unaudited pro forma financial information summarizes the combined results of operations for the Company and the companies included as part of the fiscal 2020 acquisitions, as though the companies were combined as of the beginning of the Company’s fiscal 2020. The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the acquisitions occurred as of the beginning of fiscal 2020 or of future consolidated operating results. The unaudited pro forma financial information was as follows (in thousands):
|  | 2020
Revenues |  | $ | 1,072,633 |
Net income |  | 49,702 |
Pro forma results presented above reflect: (i) incremental depreciation relating to fair value adjustments to property, plant, and equipment and (ii) amortization adjustments relating to fair value estimates of intangible assets. Pro forma adjustments described above have been tax affected using the Company's effective rate during the respective periods. Supplemental Disclosures During fiscal 2022, 2021 and 2020, the Company paid approximately $61.2 million, $4.4 million and $60.6 million, respectively, for these acquisitions, net of cash acquired. The Company expensed acquisition related costs of approximately $2.0 million and $0.8 million, during fiscal 2022 and 2020, respectively. During fiscal 2021, the Company did not expense any acquisition costs. The goodwill resulting from these acquisitions during fiscal 2022, 2021 and 2020 consists largely of the Company’s expected future product and services sales and synergies from combining the products and services and technology with the Company’s existing product and services portfolio.

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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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