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Acquisitions | 6 Months Ended
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Jun. 30, 2015
Acquisitions [Abstract] |
Acquisitions | 3. ACQUISITIONS Inspection Oilfield Services (IOS) On M arch 13, 2015, the Company acquired IOS Holdings, Inc. for $167,404, net of cash acquired and a net working capital receivable adjustment of $2,363. The purchase agreement includes an earn-out provision for the seller to generate an additional $60,000 of proceeds upon achieving certain levels of EBITDA during the three year period beginning on January 1, 2015. As of June 30, 2015, the Company has not accrued an estimated earn-out obligation based upon a probability weighted valuation model of the projected EBITDA results, which indicates that the minimum target will not be achieved. Approximately $7,600 of the purchase price relates to amounts held in escrow to satisfy potential indemnity claims made under the purchase agreement. IOS is a leading independent provider of tubular management services with operations in every significant oil and gas producing region in the continental United States. The acquisition is included within our Tubular and Energy Services segment from the date of acquisition. Tew Holdings, LTD On January 13, 2015, the Company acquired Tew Holdings, LTD (Tew) for $26,467, net of cash acquired. The purchase price includes approximately $4,200 related to working capital and net debt adjustments. The non-domestic cash payment includes approximately $600 which is held in escrow to satisfy potential indemnity claims made under the purchase agreement. Headquartered in Nottingham, UK, Tew provides application engineering solutions primarily to the rail market and other major industries. The results of Tew’s operations are included within the Rail Products and Services segment from the date of acquisition. Chemtec Energy Services, L.L.C. On December 30, 2014, the Company acquired Chemtec Energy Services, L.L.C. (Chemtec) for $66,719, net of cash received, which is inclusive of $1,867 related to working capital adjustments. The cash payment included $5,000 which is held in escrow to satisfy potential indemnity claims made under the purchase agreement. Chemtec is a domestic manufacturer and turnkey provider of blending, injection, and metering equipment for the oil and gas industry. The acquired business is included within our Tubular and Energy Services segment. FWO On October 29, 2014, the Company acquired FWO, a business of Balfour Beatty Rail GmbH for $1,103, inclusive of a $161 post-closing working capital receivable adjustment. FWO is engaged in the electronic track lubrication and maintenance business and has been included in our Rail Products and Services segment. Carr Concrete On July 7, 2014, the Company acquired Carr Concrete Corporation (Carr) for $12,480, inclusive of a $189 post-closing purchase price adjustment. Carr is a provider of pre-stressed and precast concrete products located in Waverly, WV and the transaction was funded with cash on hand. Included within the purchase price is $1,000 which is held in escrow to satisfy potential indemnity claims made under the purchase agreement. The results of Carr’s operations are included in our Construction Products segment. Acquisition Summary Each transaction was accounted for under the acquisition method of accounting under U.S. generally accepted accounting principles which requires an acquiring entity to recognize, with limited exceptions, all of the assets acquired and liabilities assumed in a transaction at fair value as of the acquisition date. Goodwill primarily represents the value paid for each acquisition’s enhancement to the Company’s product and service offerings and capabilities, as well as a premium payment related to the ability to control the acquired assets. The Company has concluded that intangible assets and goodwill values resulting from the Chemtec, FWO, and Carr transactions will be deductible for tax purposes. Acquisition related costs for the three and six-month period ended June 30, 2015 were $225 and $595. The following unaudited pro forma consolidated income statement presents the Company’s results as if the acquisitions of IOS, Tew, and Chemtec had occurred on January 1, 2014:
|  | Three months ended |  | Six months ended
|  | June 30, |  | June 30,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
Net sales | $ | 171,419 | $ | 214,728 | $ | 325,399 | $ | 374,845
Gross profit |  | 37,089 |  | 45,623 |  | 72,214 |  | 85,149
Net income |  | 5,362 |  | 10,600 |  | 9,693 |  | 18,134
Diluted earnings per share |  |  |  |  |  |  |  |
As Reported | $ | 0.52 | $ | 0.67 | $ | 0.93 | $ | 1.02
Pro forma | $ | 0.52 | $ | 1.03 | $ | 0.93 | $ | 1.76
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:
Allocation of Purchase Price |  | March 13, 2015 - IOS |  | January 13, 2015 - Tew |  | December 30, 2014 - Chemtec |  | October 29, 2014 - FWO |  | July 7, 2014 - Carr
Current assets | $ | 19,877 | $ | 12,125 | $ | 15,528 | $ | 131 | $ | 3,180
Other assets |  | 708 |  | - |  | - |  | - |  | 45
Property, plant, and equipment |  | 51,453 |  | 2,398 |  | 4,705 |  | - |  | 7,648
Goodwill |  | 70,676 |  | 8,772 |  | 22,302 |  | 971 |  | 1,936
Other intangibles |  | 50,354 |  | 14,048 |  | 33,130 |  | 419 |  | 1,348
Liabilities assumed |  | (24,364) |  | (6,465) |  | (6,756) |  | (418) |  | (1,677)
Total | $ | 168,704 | $ | 30,878 | $ | 68,909 | $ | 1,103 | $ | 12,480
The purchase price allocations for IOS, Tew, Chemtec, and FWO are based on preliminary valuations. If new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement recognized for assets or liabilities assumed, the Company will retrospectively adjust the amounts recognized as of the acquisition date. Intangible asset values for the 2014 acquisition of Carr were finalized during 2015. The following table summarizes the estimates of the fair values of the identifiable intangible assets acquired:
Intangible Asset |  | March 13, 2015 - IOS |  | January 13, 2015 - Tew |  | December 30, 2014 - Chemtec |  | October 29, 2014 - FWO |  | July 7, 2014 - Carr
Trade name | $ | 2,641 | $ | 870 | $ | 3,149 | $ | - | $ | 613
Customer relationships |  | 41,171 |  | 10,035 |  | 23,934 |  | 34 |  | 524
Technology |  | 4,364 |  | 2,480 |  | 4,930 |  | 341 |  | 87
Non-competition agreements |  | 2,178 |  | 663 |  | 1,117 |  | 44 |  | 124
Total identified intangible assets | $ | 50,354 | $ | 14,048 | $ | 33,130 | $ | 419 | $ | 1,348

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