12. Acquisitions

On June 1, 2016, the Company acquired Power Service, Inc., Industrial Tool & Repair, Inc. and Power Transportation LLC (collectively, “Power Service”) for a purchase price consideration of $179 million. Power Service is known as a premier one-stop shop for modularized well hook-ups. This acquisition primarily expands NOW’s market in the western United States. The Company has included the financial results of the acquisition in its consolidated financial statements from the date of the acquisition.

The Company completed its preliminary valuations of this acquisition as of the acquisition date and recognized goodwill of $119 million and intangible assets of $45 million which is subject to change. If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the date of acquisition), the Company will refine its estimate of fair value to allocate the purchase price more accurately; any such revisions are not expected to be significant.

During the three months ended March 31, 2017, the Company recognized measurement period adjustments based on information that was received subsequent to the acquisition date that related to conditions that existed as of the acquisition date. The effect of these adjustments resulted in a $1 million increase to the purchase price, current asset and current liabilities, and a $1 million decrease to property, plant and equipment. The net impact of these adjustments was a $2 million increase to goodwill.

Following is the purchase price allocation detail (in millions):

	As of March 31, 2017
Net purchase price				$	179
Fair value of net assets acquired:
Current assets other than cash		26
Property, plant and equipment		11
Trade names (estimated useful lives of 20 years)		20
Customer relationships (estimated useful lives of 10 years)		25
Current liabilities		(21	)
Deferred tax liabilities		(1	)
Total fair value of net assets acquired					60
Goodwill⁽¹⁾				$	119

⁽¹⁾

The amount of goodwill represents the excess of its purchase price over the fair value of net assets acquired. Goodwill includes the expected benefits that the Company believes will result from combining its operations with those of businesses acquired. The amount of goodwill recognized that is expected to be deductible for income tax purposes is $116 million.

The Purchase Agreement with Power Service contains non-compete agreements with certain employees. The Company identified these agreements as a separate transaction and recognized a non-compete intangible asset of $7 million with a two-year life. Amortization expense for these agreements recognized for the quarter ended March 31, 2017 was approximately $1 million.

The Company has not presented supplemental pro forma information because the acquired operations did not materially impact the Company’s consolidated operating results.