On the Company acquired Capital Pumping LP and its affiliates (“Capital”), a concrete pumping provider based in Texas for a purchase price of million, which was paid using proceeds from the Company’s public offering of common stock and additional borrowings on its term loan facility. This acquisition qualified as a business combination under ASC Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition-date fair values, with any excess recognized as goodwill. Goodwill recorded from the transaction represents expected synergies from combining operations and the assembled workforce.

 

The following table represents the preliminary allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values:

 

Consideration paid:		$	129,218
Net assets acquired:
Current assets		$	81
Intangible assets			45,000
Property and equipment			56,467
Liabilities assumed			(63	)
Total net assets acquired			101,485
Goodwill		$	27,733

 

Identifiable intangible assets acquired consist of customer relationships of million and a trade name valued at million. The customer relationships were valued using the multi-period excess earnings method. The Company determined the useful life of the customer relationships to be years. The trade name was valued using the relief-from-royalty method and the Company determined the trade name associated with Capital to be indefinite.

 

 

On the Company acquired Atlas Concrete Pumping, Inc., a concrete pumping provider based in Boise, Idaho, for a purchase price of  million, which was paid using a combination of million in cash and million in common stock. This acquisition qualified as a business combination under ASC The Company has preliminarily recorded all assets acquired and liabilities assumed at their acquisition-date fair values, with million being allocated to equipment, million allocated to working capital assets, million being allocated to finite-lived intangible assets, less million being allocated to deferred tax liabilities, and the remaining unallocated purchase consideration of million being recognized as goodwill. Goodwill represents expected synergies from combining operations and the assembled workforce.

 

 

On the Company consummated the Business Combination. This acquisition qualified as a business combination under ASC Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition-date fair values, with any excess recognized as goodwill. Goodwill recorded from the transaction represents the value provided by the Company’s leading market share in a highly-fragmented industry. 

 

The following table represents the preliminary allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values:

 

Cash		$	445,386
Fair value of rollover equity			164,908
Net working capital adjustment			4,048
Total consideration paid		$	614,342
Current assets		$	49,112
Intangible assets			208,063
Property and equipment			219,467
Liabilities assumed			(112,048	)
Total net assets acquired			364,594
Goodwill		$	249,748

 

 

Identifiable intangible assets acquired consist of customer relationships of million and trade names of million. The customer relationships were valued using the multi-period excess earnings method. The Company determined the useful life of the customer relationships to be years. The trade names were valued using the relief-from-royalty method. The Company determined the useful life of the trade name associated with Camfaud to be years. The Company determined the trade names associated with Brundage-Bone and Eco-Pan to be indefinite.

 

During the months ended as part of a measurement period adjustment, the Company adjusted the valuation of its property and equipment by million and the valuation of its intangible assets by million, with a corresponding offset to goodwill and a net change to deferred tax liabilities of million. In addition, the Company recorded an out of period adjustment related to the reduction of sales tax accrual of million that resulted in changes to goodwill and liabilities assumed in the transaction. The impact of the adjustment was considered material to previously issued financial statements.

 

CPH incurred transaction costs of million and debt extinguishment costs of million independently prior to the Business Combination. Industrea incurred transaction costs of million independently prior to the Business Combination (i.e. before million of which was related to the payment of deferred underwriting commissions. Industrea’s pre-Business Combination financial results are consolidated with the Predecessor (Note ) and so these costs are reflected in the Predecessor Financial Statements.

 

Additional costs consisting of stock option and other compensation related expenses were recorded in connection with the Business Combination. These costs were solely contingent upon the completion of the business combination and did include any future service requirements. As such, these costs will be presented “on the line” and are reflected in either Predecessor or Successor financial statements.  “On the line” describes those expenses triggered by the consummation of a business combination that were incurred by the acquiree, i.e. CPH, that are recognized in the Statement of Operations of either the Predecessor or Successor as they are directly attributable to either period but instead were contingent on the Business Combination.

 

In conjunction with the Business Combination, there were million of transaction bonuses and, as a result of a change in control provision for stock-based awards, certain unvested stock-based awards immediately vested, resulting in the recognition of compensation expense of approximately million. These expenses were reflected in either the Predecessor or Successor consolidated statement of operations and comprehensive income (loss) periods, but instead are presented “on the line".

 

In Brundage-Bone entered into an asset purchase agreement to acquire substantially all of the assets of Richard O’Brien Companies, Inc., O’Brien Concrete Pumping-Arizona, Inc., O’Brien Concrete Pumping-Colorado, Inc. and O’Brien Concrete Pumping, LLC (collectively, “O’Brien” or the "O’Brien Companies”) for cash.

 

This acquisition qualified as a business combination under ASC Accordingly, the Predecessor recorded all assets acquired and liabilities assumed at their acquisition-date fair values, with any excess recognized as goodwill. Goodwill represents expected synergies from combining operations and the assembled workforce. The acquisition was part of the Predecessor’s strategic plan to expand their presence in the Colorado and Arizona markets. 

 

The following table represents the total consideration transferred and its allocation to the assets acquired and liabilities assumed at their acquisition-date fair values:

 

Consideration paid:
Cash, net of cash acquired		$	21,000
Total consideration paid		$	21,000
Net assets acquired:
Inventory		$	140
Property, plant and equipment			16,163
Intangible assets			2,810
Total net assets acquired			19,113
Goodwill		$	1,887

 

Acquisition-related expenses incurred by the Predecessor amounted to million, all of which were recognized in the consolidated statement of income during the months ended Predecessor).

 

 

The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the CPH, Capital and O’Brien business combinations discussed above as if they had occurred on The unaudited pro forma financial information is presented for illustrative purposes only and is necessarily indicative of the results of operations that would have been realized if the CPH, Capital and O’Brien business combinations had been completed on nor does it purport to project the results of operations of the combined company in future periods. The unaudited pro forma financial information does give effect to any anticipated integration costs related to the acquired company.

 

The unaudited pro forma financial information is as follows:

 

		Successor				Predecessor
(in thousands)		Nine months ended July 31, 2019				Nine months ended July 31, 2018
Revenue		$	24,396			$	175,854
Pro forma revenue adjustments by Business Combination
O'Brien			-				6,990
Capital			26,829				45,932
CPH			174,613				-
Total pro forma revenue		$	225,838			$	228,776

 

		Successor				Predecessor
		Nine months ended July 31, 2019				Nine months ended July 31, 2018
Net (loss) income		$	(22,575	)		$	26,993
Pro forma net income adjustments by Business Combination
O'Brien			-				(1,013	)
Capital			2,868				2,054
CPH			(10,478	)			-
Total pro forma net (loss) income		$	(30,185	)		$	28,034