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Business Acquisitions | 6 Months Ended
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Jun. 30, 2024
Business Combinations [Abstract] |
Business Acquisitions | 3. Business Acquisitions On July 31, 2023, the C ompany acquired 100% of the issued and outstanding shares of 1185641 B.C. LTD (d/b/a Great North Wellhead and Frac, “Great North”) for a purchase price of $105 million CAD, approximately $79.8 million, which is subject to customary adjustments for cash and working capital. The acquisition of Great North allows Dril-Quip to service its clients with Great North’s products. The following table summarizes the consideration transferred to acquire Great North:
Fair value of consideration transferred: |  | (In thousands) |
Cash |  | $ | 84,097 |
Contingent consideration |  |  | 3,571 |
Total |  | $ | 87,668 |
The acquisition of Great North includes a contingent consideration arrangement that requires additional consideration to be paid by Dril-Quip to the sellers of Great North based on the future revenues of Great North for the fiscal years 2024 and 2025. The range of the undiscounted amounts Dril-Quip could pay under the contingent consideration agreement is between zero and $30 million CAD, approximately $22.8 million. The fair value of the contingent consideration recognized on the acquisition date was $3.6 million. The Company is required to remeasure this liability to fair value quarterly with any changes in the fair value recorded in income until the final payment is made. As of June 30, 2024 the fair value of the contingent consideration was $1.2 million. For information with respect to our fair value measurements, see “Fair Value Measurements,” Note 4 of Notes to the Consolidated Financial Statements. The contingent consideration is included in other long-term liabilities as of June 30, 2024. The following table sets forth the preliminary purchase price allocation, which was based on fair value of assets acquired and liabilities assumed at the acquisition date, July 31, 2023: Preliminary amounts of identified assets acquired and liabilities assumed:
|  | (In thousands) |
Cash |  | $ | 1,810 |
Accounts receivable |  |  | 16,499 |
Prepaid expenses and other current assets |  |  | 609 |
Inventory |  |  | 16,068 |
Property, plant and equipment |  |  | 29,338 |
Right of use assets |  |  | 11,115 |
Intangible assets (1) |  |  | 22,263 |
Total assets acquired |  | $ | 97,702 |
Accounts payable |  |  | 7,034 |
Accrued expenses |  |  | 3,522 |
Deferred revenue |  |  | 47 |
Lease liability, long-term |  |  | 11,115 |
Deferred taxes |  |  | 5,075 |
Total liabilities assumed |  | $ | 26,793 |
Net identifiable assets acquired |  | $ | 70,909 |
Goodwill |  |  | 16,759 |
Net assets acquired |  | $ | 87,668 |
(1) Includes $4.0 million of trademarks with a weighted average useful life of 10 years, $3.6 million of patents with a weighted average useful life of 15 years, and $14.7 million of customer relationships with a weighted average useful life of 10 years. See “Good will and Intangible Assets,” Note 10 of Notes to the Condensed Consolidated Financial Statements for further information regarding intangible assets.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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