2. ACQUISITIONS

In July 2015, we acquired the Qualspec Group (“Qualspec”) for total cash consideration of $257.0 million, which could be increased by $10.0 million depending upon the operating results of Qualspec through the end of calendar year 2015. Qualspec is a leading provider of non-destructive testing (“NDT”) services in the United States, with significant operations in the West Coast, Gulf Coast and Mid-Western areas of the country. The acquisition is expected to add about $180.0 million of annual revenue to our operations and nearly 1,000 new employees to our human capital resources. The purchase of Qualspec was financed through borrowings under our new banking credit facility. Our consolidated results include the activity of Qualspec beginning on the acquisition date of July 7, 2015.

The following table presents the preliminary purchase price allocation for Qualspec (in thousands):


	July 7, 2015
	(unaudited)
Cash and cash equivalents	$	3,981
Accounts receivable		21,281
Current deferred tax assets		279
Prepaid expenses		1,049
Plant, property and equipment		15,472
Intangible assets		74,700
Goodwill		151,732
Other assets		165
Non-current deferred tax assets		3,459

Total assets acquired	$	272,118

Accounts payable	$	2,892
Other accrued liabilities		6,448
Contingent consideration		5,778

Total liabilities assumed		15,118

Net assets acquired	$	257,000

The preliminary purchase price allocation shown above is based upon the fair values at acquisition date. The fair values recorded are “Level 3” measurements as defined in footnote 10 and are subject to change as new information is acquired. The intangible assets recognized are being amortized over the life of one to fifteen years.

Our unaudited pro forma consolidated results of operations are shown below as if the acquisition of Qualspec had occurred at the beginning of fiscal years 2015 and 2016. These results are not necessarily indicative of the results which would actually have occurred if the purchase had taken place at the beginning of fiscal years 2015 or 2016, nor are they necessarily indicative of future results (in thousands, except per share data).


	Pro forma data Three Months Ended August 31,
	2015		2014
	(unaudited)		(unaudited)
Revenues	$	238,408	$	227,760
Net income	$	1,679	$	7,342
Earnings per share:
Basic	$	0.08	$	0.36
Diluted	$	0.08	$	0.35

In June 2015, we purchased an advanced valve leader located in Long Beach, California, with a portfolio of projects from various sectors including oil and gas refining, pipelines and power generation for a total consideration of $12.6 million, net of cash acquired of $0.1 million. The purchase price included net working capital of $3.0 million, $0.6 million in fixed assets and $9.1 million in intangibles that includes $4.1 million allocated to goodwill. The purchase price also included $2.0 million of contingent consideration. The contingent consideration is based upon the achievement of certain performance targets over a three year period for an additional amount of up to $4.0 million.

In August 2014, we purchased a valve repair company in the U.K. for total consideration of $3.1 million, net of cash acquired of $0.2 million, including estimated contingent consideration of $0.3 million. Our purchase price allocation resulted in $2.1 million being allocated to fixed assets and net working capital and $1.0 million being applied to goodwill and intangible assets.