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BUSINESS ACQUISITIONS | 3 Months Ended
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Mar. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS On March 1, 2022, the Company completed the acquisition of Drydon Equipment, Inc. (“Drydon”), a distributor and manufacturers’ representative of pumps, valves, controls and process equipment focused on serving the water and wastewater industry in the Midwest. The acquisition of Drydon was funded with cash on hand as well as issuing DXP's common stock. The Company paid approximately $7.9 million in cash and stock. A majority of Drydon's sales are project-based work under the percentage-of-completion accounting model. As a result, Drydon has been included in the IPS segment. For the three months ended March 31, 2022, Drydon contributed sales of $1.4 million and net income of $0.7 million. Goodwill for the transaction totaled approximately $4.1 million. On March 1, 2022, the Company completed the acquisition of certain assets of Burlingame Engineers, Inc. (“Burlingame”), a provider of water and wastewater equipment in the industrial and municipal sectors. The Company paid approximately $1.1 million in cash, stock and future consideration. For the three months ended March 31, 2022, Burlingame contributed sales of $0.4 million and net income of $6 thousand. Pro forma revenue and net income have been excluded as the amounts would have been immaterial to the consolidated results of the Company for the current and prior year. In aggregate, the acquisition-date fair value of the consideration transferred for the two businesses totaled $9.0 million, which consisted of the following:
Purchase Price Consideration (in millions) |  | Total Consideration
Cash payments |  | $ | 5.8 |
Fair value of stock issued |  | 0.5 |
Future consideration |  | 2.7 |
Total purchase price consideration |  | $ | 9.0 |
The fair value of the 21,844 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 preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date:
(In thousands) |  |
Cash |  | $ | 517 |
Accounts receivable |  | 2,709 |
Other receivables |  | 56 |
Inventory |  | 37 |
Non-compete agreements |  | 229 |
Customer relationships |  | 1,770 |
Property and equipment |  | 124 |
Other assets |  | 2 |
Assets acquired |  | $ | 5,444 |
Current liabilities assumed |  | (1,061) |
Net assets acquired |  | $ | 4,383 |
Total Consideration |  | (9,049) |
Goodwill |  | $ | 4,666 |
Of the $2 million of acquired intangible assets, $0.2 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, $1.8 million was assigned to customer relationships, and will be amortized over a period of 8 years. The goodwill total of approximately $4.7 million is attributable primarily to expected synergies and the assembled workforce of each entity and is generally deductible for tax purposes. The fair value of accounts receivables acquired is $2.7 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 Condensed Consolidated Statements of Operations and Comprehensive Income 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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