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BUSINESS ACQUISITIONS | 6 Months Ended
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Jun. 30, 2021
Business Combinations [Abstract] |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS On April 30, 2021, the Company completed the acquisition of Carter & Verplanck, LLC (“CVI”), a distributor of products and services exclusively focused on serving the water and wastewater markets. The acquisition of CVI was funded with cash on hand as well as issuing DXP's common stock. The Company paid approximately $49.7 million in cash and stock. For the six months ended June 30, 2021, CVI contributed sales of $5.2 million and net income of $1.1 million. A majority of CVI's sales are project-based work under the percentage-of-completion accounting model. As a result, CVI has been included in the IPS segment.
Purchase Price Consideration (in millions) |  | Total Consideration
Cash payments |  | $ | 40.8 |
Fair value of stock issued |  | 8.9 |
Total purchase price consideration |  | $ | 49.7 |
The fair value of the approximately 352,000 common shares issued was determined based on the closing market price of the Company’s common shares on the acquisition date, adjusted for holding restrictions following consummation. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:
(In thousands) |  |
Accounts receivable |  | $ | 4,397 |
Costs in excess of billings |  | 2,484 |
Non-compete agreements |  | 730 |
Customer relationships |  | 10,676 |
Goodwill |  | 38,612 |
Property and equipment |  | 85 |
Other assets |  | 2,456 |
Assets acquired |  | $ | 59,440 |
Current liabilities assumed |  | (9,781) |
Net assets acquired |  | $ | 49,659 |
The following represents the pro forma unaudited revenue and earnings as if CVI had been included in the consolidated results of the Company for the six months ended June 20, 2020 and 2021, respectively:
|  | Six months Ended June 30,
|  | 2020 |  | 2021
|  | (in thousands/unaudited)
Revenue |  | $ | 558,630 |  |  | $ | 536,576 |
Net income |  | $ | 7,938 |  |  | $ | 8,010 |
Of the $50 million of acquired intangible assets, $0.7 million was provisionally assigned to non-compete agreements that are subject to amortization over 5 years, coincident with the terms of the agreements. In addition, $10.7 million was assigned to customer relationships, and will be amortized over a period of 8 years. The $38.6 million of goodwill was assigned to the Innovative Pumping Solutions segment. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of CVI. None of the goodwill is expected to be deductible for income tax purposes. The fair value of accounts receivables acquired is $4.4 million, which approximated book value. The Company recognized less than $200,000 of acquisition related costs that were expensed in the current period. These costs are included in the consolidated income statement in Selling, General and Administrative costs. The Company also recognized an immaterial amount in costs associated with issuing the shares issued as consideration in the business combination. Those costs were deducted from the recognized proceeds of issuance within stockholders’ equity.

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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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