Acquisitions

The following acquisitions were accounted for using the acquisition method of accounting, except as otherwise noted, and, accordingly, the Consolidated Financial Statements include the financial position and results of operations from the respective date of acquisition:

Gas and Fluid Handling

On October 5, 2015, Colfax completed the acquisition of Simsmart Technologies, Inc. (“Simsmart”)for cash consideration of $15.3 million, net of cash acquired. Simsmart provides a software product that controls ventilation conditions and increases fan efficiency. The acquisition of Simsmart expands the Howden product portfolio primarily within the mining end market and other end markets with challenging ventilation conditions.

On June 30, 2015, Colfax completed the acquisition of the Roots^TMblowers and compressors business unit (“Roots”), also known as Industrial Air & Gas Technologies, from GE Oil & Gas (the “Roots Acquisition”) for cash consideration of $180.7 million. Roots is a leading supplier of blower and compressor technologies which service a broad range of end markets, including wastewater treatment, chemical production, and power generation. The acquisition of Roots builds on Howden’s global strength in compressors and blowers and adds important application expertise and product solutions to the portfolio.

On May 21, 2014, the Company completed the $0.8 million acquisition of the remaining ownership of Howden Thomassen Middle East FCZO (“Howden Middle East”), which resulted in an increase in the Company’s ownership of the subsidiary from 90% to 100% and was accounted for as an equity transaction, as the Company increased its controlling interest.

On November 29, 2013, the Company completed the acquisition of the global infrastructure and industry division of Fläkt Woods Group (“GII”) for approximately $246.0 million, including the assumption of debt. GII has operations around the world and expanded the Company’s product offerings in the heavy duty industrial and cooling fan market.

On November 25, 2013, the Company converted the common shares of Sistemas Centrales de Lubrication S.A. de C.V. (“Sicelub”), previously a less than wholly owned subsidiary in which the Company did not have a controlling interest, that were held by the majority owner into shares of mandatorily redeemable non-voting preferred stock of Sicelub valued at $31.7 million at the acquisition date, which resulted in an increase in the Company’s ownership from 44% to 100%. On the date of the acquisition, the Company held a $7.4 million equity investment representing the Company’s 44% investment in Sicelub and recognized a $13.8 million gain as a reduction in Selling, general and administrative expense in the Consolidated Statement of Income for the year ended December 31, 2013 to remeasure the investment to fair value at the acquisition date based upon the total enterprise value, adjusting for a control premium. Changes in settlement value of the mandatorily redeemable preferred stock are determined, in part, by the achievement of certain performance goals. The change in the settlement value of the mandatorily redeemable preferred stock for each period will be reflected in Interest expense. During the year ended December 31, 2014, a $3.1 million reduction to Interest expense was reflected in the Consolidated Statement of Income due to the change in expected settlement value under the conditions specified in the contract of the mandatorily redeemable preferred stock, as the performance criteria were not met. On December 25, 2015, the shares of the mandatorily redeemable preferred stock of Sicelub were redeemed and settled by offset of the outstanding loan payable to the Company by the holders of the mandatorily redeemable preferred stock.

On November 1, 2013, the Company completed the acquisition of ČKD Kompresory a.s. (“ČKDK”) for approximately $69.4 million, including the assumption of debt. ČKDK is a leading supplier of multi-stage centrifugal compressors to the oil & gas, petrochemical, power and steel industries, based in Prague, Czech Republic.

On September 30, 2013, the Company completed the acquisition of certain business units of The New York Blower Company, including TLT-Babcock Inc. (“TLT-Babcock”) and Alphair Ventilating Systems Inc. (“Alphair”) for an approximate aggregate purchase price of $55.7 million. TLT-Babcock and Alphair are suppliers of heavy duty and industrial fans in Akron, Ohio and Winnipeg, Manitoba, respectively.

On July 9, 2013, the Company completed the acquisition of the common stock of Clarus Fluid Intelligence, LLC (“Clarus”) for $13.2 million, which included the fair value of an estimated additional contingent cash payment of $2.5 million at the acquisition date. The additional contingent payment, if any, would be paid during the year ending December 31, 2016 subject to the achievement of certain performance goals. During the year ended December 31, 2014, the Company recognized an unrealized gain of $2.9 million, including accretion, related to the Clarus contingent payment liability, as the performance criteria are no longer expected to be met. The unrealized gain and accretion were recognized in Selling, general and administrative expense and Interest expense in the Consolidated Statements of Income, respectively. Clarus is a domestic supplier of flushing services for marine applications primarily to U.S. government agencies, with primary operations based in Bellingham, Washington.

Fabrication Technology

On July 1, 2014, the Company completed the $9.5 million acquisition of the remaining ownership of ESAB-SVEL (“Svel”), which resulted in an increase in the Company’s ownership from 51% to 100% and was accounted for as an equity transaction, as the Company increased its controlling interest.

On April 14, 2014, Colfax completed the acquisition of the common stock of Victor Technologies Holdings, Inc. (“Victor”) for total net cash consideration of $948.8 million (the “Victor Acquisition”). Victor is a global manufacturer of cutting, gas control and specialty welding solutions. The acquisition complemented the geographic footprint of the Company’s fabrication technology segment and expanded its product portfolio into new segments and applications. During the year ended December 31, 2015, the Company retrospectively adjusted provisional amounts with respect to the acquisition that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. The aggregate adjustments during the year ended December 31, 2015 increased the Goodwill balance by $0.1 million, primarily due to finalization of the Company’s valuation of certain deferred tax assets and liabilities offset by finalization of the valuation of certain fixed assets and an adjustment to a VAT tax position in a specific foreign entity.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition for all acquisitions accounted for under the acquisition method of accounting and consummated during the years ended December 31, 2015, 2014 and 2013. For the acquisitions consummated during the year ended December 31, 2015, the amounts represent the Company’s best estimate of the aggregate fair value of the assets acquired and liabilities assumed. These amounts are based upon certain valuations and studies that have yet to be finalized, and accordingly, the assets acquired and liabilities assumed, as detailed below, are subject to adjustment once the detailed analyses are completed. Substantially all of the Goodwill recognized for acquisitions consummated during the year ended December 31, 2015 is expected to be deductible for income tax purposes.



	2015			2014			2013
	(In thousands)
Trade receivables	$	15,680		$	76,678		$	74,387
Inventories	20,898			107,785			49,871
Property, plant and equipment	20,653			56,988			92,247
Goodwill	85,216			612,866			284,294
Intangible assets	85,113			389,700			104,272
Accounts payable	(9,909		)	(34,271		)	(70,122		)
Debt	—			—			(10,942		)
Other assets and liabilities, net	(21,644		)	(260,946		)	(99,205		)
Consideration, net of cash acquired	$	196,007		$	948,800		$	424,802

The Company incurred advisory, legal, valuation and other professional service fees of $2.7 million, $2.7 million and $4.3 million, during the years ended December 31, 2015, 2014 and 2013, respectively, in connection with completed acquisitions which are included in Selling, general and administrative expense in the Consolidated Statements of Income.

During the years ended December 31, 2015, 2014, and 2013, the Company’s Consolidated Statements of Income included $47.9 million, $347.3 million, and $59.9 million of Net sales associated with acquisitions consummated during the respective period. During the period from April 14, 2014 through December 31, 2014, the Company’s Consolidated Statements of Income included $35.9 million of Net income available to Colfax Corporation common shareholders, associated with the Victor Acquisition. Net Income (Loss) available to common shareholders associated with acquisitions consummated during the years ended December 31, 2015 and December 31, 2013 was not material.