On February 1, 2020, the Company acquired substantially all of the assets and liabilities of Spartan Emergency Response (“Spartan ER”), a leading designer, manufacturer and distributor of custom emergency response vehicles, cabs and chassis for the emergency response market, and its brands, from Spartan Motors, Inc. (NASDAQ: SPAR). Spartan ER is reported as part of the Fire & Emergency segment. The acquisition increases the Company’s market share in several key product categories and provides access to several new large municipalities and regional markets. The purchase price for Spartan ER was $54.8 million, subject to an adjustment based on the level of net working capital at closing, as defined in the purchase agreement. The net cash consideration paid at closing was funded through the Company’s ABL credit facility. The preliminary purchase price allocation resulted in a gain of $11.9 million, which is included in the Company’s Condensed Unaudited Consolidated Statement of Operations for the three and six months ended April 30, 2020. Prior to recognizing the gain, the Company reassessed the measurement and recognition of identifiable assets acquired, and liabilities assumed and concluded that the valuation procedures and resulting preliminary measures were appropriate. The Company believes that its ability to negotiate a purchase price lower than the fair market value of the acquired net assets was due to the limited number of strategic buyers that exist in this specific market and the desire of the sellers to exit the business on an accelerated basis. The Company incurred acquisition related costs of $1.3 million, which are included in selling, general and administrative expenses in the Company’s Condensed Unaudited Consolidated Statements of Operations for the three and six months ended April 30, 2020.

As of April 30, 2020, the fair value of the acquired assets, liabilities and gain on acquisition of business, is provisional pending receipt of the final valuation report from a third-party valuation firm.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed for Spartan ER:

Assets:
Accounts receivable, net	$	30.9
Inventories, net		77.7
Other current assets		2.4
Property, plant and equipment		15.2
Right of use assets		6.0
Total assets acquired		132.2
Liabilities:
Accounts payable		5.0
Customer advances		32.8
Accrued warranty		0.7
Other current liabilities		7.1
Short-term lease obligations		0.8
Deferred income taxes		3.9
Long-term lease obligations		5.4
Other long-term liabilities		9.8
Total liabilities assumed		65.5
Net assets acquired		66.7
Consideration paid		54.8
Gain on acquisition of business	$	(11.9	)

Net sales and operating income attributable to Spartan ER were $62.6 million and $1.0 million for the three and six months ended April 30, 2020. In connection with the acquisition, Spartan ER changed its method for recognizing revenue from over-time to point-in-time to align with the Company. The Company determined that it is impracticable to determine the cumulative effect of applying this change retrospectively because records of certain sales transactions are no longer available for all prior periods. Accordingly, the supplemental proforma disclosures required by ASC 805 have been omitted.