Acquisitions

Asset Acquisition - Van Hook Crude, LLC

The acquisition of the assets of Van Hook Crude, LLC occurred on March 15, 2018. The Company acquired all of the rights, title, and interest in certain properties and assigned contracts (collectively, the “Assets”) for a total consideration of $15,549 in cash.

The acquisition cost has been allocated over the assets as set forth below.



Machinery, equipment and tooling	$	1,478
Plant and building	1,407
Railroad and sidings	9,926
Land improvements	2,738
Total assets acquired	$	15,549

Business Combination - Quickthree Solutions Inc.

On June 1, 2018, the Company acquired substantially all of the assets of Quickthree Solutions, Inc., a manufacturer of portable vertical frac sand storage solution systems.

The aggregate purchase price consisted of approximately $30,000 cash paid at closing, subject to adjustment based upon Quickthree’s closing date working capital, and up to $12,750 in potential earn-out payments over a three-year period after closing. Payment of the earn-out is based upon the production of silos and related equipment during the earn-out period. The closing portion of the purchase price was paid using cash on hand and advances under the Company’s Credit Facility. The Company expects the earn-out portion of the purchase price to be paid using cash on hand, equipment financing options available to the Company and advances under the Company’s Credit Facility. Goodwill in this transaction is attributable to planned expansion into the wellsite storage solutions market, and is fully deductible for tax purposes.

The table below presents the calculation of the total purchase consideration:



Base price - cash	$	30,000
Contingent consideration – earnout	9,200
Working capital adjustment	(122		)
Total purchase consideration	$	39,078

The Company’s allocation of the purchase price in connection with the acquisition was calculated as follows.



	Fair Value		Useful Life (in years)
Assets Acquired
Accounts receivable	$	112
Inventory	1,700
Prepaid expenses and other current assets	126
Total current assets acquired	$	1,938
Property, plant and equipment	740
Customer relationships	270		1 year
Developed technology	18,800		13 years
Trade name	900		Indefinite
Goodwill	16,935
Other assets	225
Total non-current assets acquired	37,870
Total assets acquired	$	39,808

Liabilities Assumed
Accounts payable	$	331
Accrued and other expenses	399
Total liabilities assumed	730
Estimated fair value of net assets acquired	$	39,078

Total acquisition costs for the Quickthree Solutions acquisition incurred during the three and nine months ended September 30, 2018 were $0 and $1,159, respectively, which are included in selling, general and administrative expense on the Company’s condensed consolidated income statements. During the quarter ended September 30, 2018, there were no changes to the allocation of the fair value of assets and liabilities acquired.

The Company determined the fair value of the contingent consideration to be $9,200 at June 1, 2018, the acquisition date and recorded it as a liability in the Company’s unaudited condensed consolidated balance sheets. Each reporting period, the Company reassesses its inputs including market comparable information and management assessments regarding potential future scenarios, then discounts the liabilities to present value. For the three months ended September 30, 2018, the Company recorded an unrealized gain on contingent consideration in the amount of $2,100 on the condensed consolidated income statements, related the change in fair value of contingent consideration. The Company will continue to reassess earn-out calculations related to the contingent consideration in future periods.