2.	Business Combination

July

27,

2018,

the Company completed the acquisition of

100%

of Ameron Water Transmission Group, LLC for a purchase price of

$38.1

million in cash. The results of Ameron’s operations have been included in the consolidated financial statements since that date. Ameron was a major supplier of engineered welded steel pressure pipe as well as reinforced concrete pipe. In addition to strengthening the Company's position in the water transmission pipe market, this acquisition expands the Company’s bar-wrapped concrete cylinder pipe capabilities and adds reinforced concrete pipe and T-Lock

—a proprietary polyvinyl chloride (PVC) lining for concrete pipe sewer applications—to the Company’s product portfolio. In connection with the acquisition, the Company acquired pipe facilities in Tracy, California and San Luis Río Colorado, Mexico, as well as a protective lining facility in Brea, California.

The following table summarizes the purchase consideration and preliminary fair value of the assets acquired and liabilities assumed as of

July

27,

2018

(in thousands):

Assets
Cash and cash equivalents	$	912
Trade and other receivables		8,887
Contract assets		12,018
Inventories		7,937
Prepaid expenses and other		3,777
Property and equipment		34,827
Other assets		320
Total assets acquired		68,678

Liabilities
Accounts payable		5,520
Accrued liabilities		1,599
Contract liabilities		123
Deferred income taxes		3,221
Total liabilities assumed		10,463

Bargain purchase gain		(20,080	)

Total purchase consideration	$	38,135

The asset and liability fair value measurements are preliminary, primarily related to income, deferred, and foreign taxes, and are subject to change as additional information is obtained and certain tax returns are finalized. The Company recorded

measurement period adjustments during the

three

months ended

March

31,

2019.

The purchase price allocation will be finalized as soon as practicable within the measurement period, but

not

later than

one

year following the acquisition date.

The excess of the aggregate net fair value of assets acquired and liabilities assumed over the fair value of consideration transferred as the purchase price has been recorded as a bargain purchase gain. When it became apparent there was a potential for a bargain purchase gain, management reviewed the Ameron assets acquired and liabilities assumed as well as the assumptions utilized in estimating their fair values. Upon completion of this reassessment, the Company concluded that recording a bargain purchase gain with respect to Ameron was appropriate and required under U.S. GAAP. The Company believes the seller was motivated to complete the transaction as part of an overall repositioning of its business.

The Company incurred acquisition-related costs during the

three

months ended

March

31,

2019

and

2018

$0.1

million and approximately

$0,

respectively. These costs are included in Selling, general, and administrative expense in the Condensed Consolidated Statements Operations.

The following unaudited pro forma summary presents the consolidated results of the Company as if the acquisition of Ameron had occurred on

January

of the year prior to the acquisition (in thousands):

	Three Months Ended March 31, 2018

Net sales	$	43,567
Net loss		(22,614	)

This unaudited pro forma consolidated financial data is included only for the purpose of illustration and does

not

necessarily indicate what the operating results would have been if the acquisition had occurred on

January

of the year prior to the acquisition. Moreover, this information is

not

indicative of what the Company’s future operating results will be. The information prior to the acquisition is included based on prior accounting records maintained by Ameron. The pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Ameron to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied on

January

of the year prior to the acquisition, and the consequential tax effects. There were

material, non-recurring adjustments to this unaudited pro forma information.