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 final allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values with any measurement-period adjustments included:

 

Consideration paid:		$	129,218
Net assets acquired:
Current assets		$	748
Intangible assets			45,500
Property and equipment			56,467
Liabilities assumed			(63	)
Total net assets acquired			102,652
Goodwill		$	26,566

 

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 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 final allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition-date fair values with any measurement-period adjustments included (see paragraph below for any measurement-period adjustments included):

 

Consideration paid:
Cash		$	445,386
Fair value of rollover equity			164,908
Net working capital adjustment			4,050
Total consideration paid		$	614,344
Net assets acquired:
Current assets		$	48,912
Intangible assets			208,063
Property and equipment			219,467
Liabilities assumed			(110,245	)
Total net assets acquired			366,197
Goodwill		$	248,147

 

 

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 Successor period from through 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 the Company's previously issued financial statements.

 

CPH incurred transaction costs of million and debt extinguishment costs of million independently prior to the Business Combination.

 

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 loss periods.

 

 

The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the CPH and Capital 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 and Capital 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:

 

(in thousands)		Six Months Ended April 30, 2020				Six Months Ended April 30, 2019
Revenue		$	147,980			$	24,396
Pro forma revenue adjustments by Business Combination
Capital			-				24,765
CPH			-				95,958
Total pro forma revenue		$	147,980			$	145,119

 

(in thousands)		Six Months Ended April 30, 2020				Six Months Ended April 30, 2019
Net loss		$	(61,714	)		$	(22,575	)
Pro forma net income (loss) adjustments by Business Combination
Capital			-				2,354
CPH			-				(13,275	)
Total pro forma net loss		$	(61,714	)		$	(33,496	)