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BUSINESS ACQUISITIONS | 9 Months Ended
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Sep. 30, 2021
Business Combination and Asset Acquisition [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. 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. For the nine months ended September 30, 2021, CVI contributed sales of $9.8 million and net income of $1.1 million. On July 1, 2021, the Company completed the acquisition of Process Machinery, Inc. (“PMI”), a leading distributor of pumps, mechanical seals, tank, filters and related process equipment that focuses on serving the chemical, power, pulp & paper, mining, metals and food processing industries. The Company paid approximately $9.6 million in cash, stock and future consideration. For the nine months ended September 30, 2021, PMI contributed sales of $2.3 million and net income of $240 thousand. On September 20, 2021, the Company closed on the acquisition of Premier Water LLC (“Premier”). Premier is a leading distributor and provider of products and services exclusively focused on serving the water and wastewater treatment markets primarily in North and South Carolina. The Company paid approximately $5.8 million in cash and stock. In aggregate, the acquisition-date fair value of the consideration transferred for the three businesses totaled $65.0 million, which consisted of the following:
Purchase Price Consideration (in millions) |  | Total Consideration
Cash payments |  | $ | 53.6 |
Fair value of stock issued |  | 11.1 |
Future consideration |  | 0.3 |
Total purchase price consideration |  | $ | 65.0 |
The fair value of the approximately 422,000 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 represents the pro forma unaudited revenue and earnings as if each of the acquisitions had been included in the consolidated results of the Company for the full nine months period ending September 30, 2021 and 2020, respectively:
|  | Nine Months Ended September 30,
|  | 2021 |  | 2020
|  | (in thousands/unaudited)
Revenue |  | $ | 841,333 |  |  | $ | 788,937 |
Net income |  | $ | 15,870 |  |  | $ | (25,241) |
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:
(In thousands) |  |
Cash |  | $ | 34 |
Accounts receivable |  | 5,011 |
Other receivables |  | 1,291 |
Costs in excess of billings |  | 3,003 |
Non-compete agreements |  | 1,040 |
Customer relationships |  | 15,219 |
Goodwill |  | 47,203 |
Property and equipment |  | 214 |
Other assets |  | 2,460 |
Assets acquired |  | $ | 75,475 |
Current liabilities assumed |  | (10,134) |
Contingent consideration |  | (301) |
Net assets acquired |  | $ | 65,040 |
Of the $63.5 million of acquired intangible assets, $1.0 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, $15.2 million was assigned to customer relationships, and will be amortized over a period of 8 years. The goodwill total of $47.2 million is attributable primarily to expected synergies and the assembled workforce of each entity. The fair value of accounts receivables acquired is $5.0 million, which approximated book value. The Company recognized less than $300,000 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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