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Note 2 - Acquisitions | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
2. | Acquisitions
On December 14, 2020, the Company acquired the assets of Action Stainless & Alloys, Inc. based outside of Dallas, Texas for $19.5 million. Action Stainless is a full line distributor of stainless steel and aluminum plate, sheet, angles, rounds, flat bar, tubing and pipe and offers a wide range of processing capabilities including plasma, laser and waterjet cutting and CNC machining. As of the effective date of the acquisition Action Stainless' results are included in the Company’s specialty metals flat products segment. Upon the acquisition, the Company entered into an amendment to its credit facility to include the eligible assets of Action Stainless. On August 5, 2019, the Company acquired certain assets related to the manufacturing of the EZ Dumper® hydraulic dump inserts for $0.1 million. The dump inserts are sold through a network of more than 100 dealers across the United States and Canada. As of the effective date of the acquisition, EZ Dumper’s results are included in the Company’s carbon flat products segment. On January 2, 2019, the Company acquired substantially all of the net assets of McCullough, based in Kenton, Ohio for $11.0 million. McCullough was founded in 1965 and manufactures and sells branded self-dumping metal hoppers used in a variety of industrial applications. McCullough’s products are primarily sold through industrial distributors and catalogues. As of the effective date of the acquisition, McCullough’s results are included in the Company’s carbon flat products segment. On April 2, 2018, the Company acquired substantially all of the net assets of Berlin Metals, based in Hammond, Indiana, for $21.9 million. Berlin Metals was founded in 1967 and is one of the largest North American service centers processing and distributing prime tin mill products and stainless steel strip in slit coil form. Berlin Metals is also a supplier of galvanized, light gauge cold rolled sheet and strip and other coated metals in coil forms, to customers in the building products, automotive and specialized industrial markets. As of the effective date of the acquisition, Berlin Metals’ results are included in the Company’s specialty metals flat products segment in the Company’s 2018 financial results. The acquisitions are not considered significant and thus pro forma information has not been provided. The acquisitions were accounted for as business combinations and the assets and liabilities were valued at fair market value. The table below summarizes the final purchase price allocation of the fair market values of the assets acquired and liabilities assumed for acquisitions prior to 2020 and the preliminary allocation of the purchase price allocation of the fair market values of the assets acquired and liabilities assumed for Action Stainless.
|  | Action Stainless |  |  | EZ Dumper |  |  | McCullough |  |  | Berlin Metals |
|  | As of |  |  | As of |  |  | As of |  |  | As of |
Details of Acquisition (in thousands) |  | December 14, 2020 |  |  | August 5, 2019 |  |  | January 2, 2019 |  |  | April 2, 2018 |
Assets acquired |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 3,239 |  |  | $ | - |  |  | $ | 461 |  |  | $ | 6,609 |
Inventories |  |  | 3,656 |  |  |  | 43 |  |  |  | 586 |  |  |  | 14,769 |
Property and equipment |  |  | 10,610 |  |  |  | 67 |  |  |  | 4,138 |  |  |  | 2,898 |
Prepaid expenses and other |  |  | 204 |  |  |  | - |  |  |  | - |  |  |  | 345 |
Goodwill |  |  | 1,700 |  |  |  | 166 |  |  |  | 898 |  |  |  | - |
Intangible assets |  |  | 4,604 |  |  |  | 23 |  |  |  | 5,599 |  |  |  | 5,255 |
Total assets acquired |  |  | 24,013 |  |  |  | 299 |  |  |  | 11,682 |  |  |  | 29,876 |
Total liabilities assumed |  |  | (4,513 | ) |  |  | (166 | ) |  |  | (682 | ) |  |  | (7,969 | )
Cash paid |  | $ | 19,500 |  |  | $ | 133 |  |  | $ | 11,000 |  |  | $ | 21,907 |
The purchase price allocations presented above is based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using Level 3 valuation techniques including income, cost and market approaches. The fair value estimates involve the use of estimates and assumptions, including, but not limited to, the timing and amounts of future cash flows, revenue growth rates, discount rates, and royalty rates. The total liabilities assumed for Action Stainless includes an immaterial earn-out amount.

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