Acquisitions (Tables)
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6 Months Ended |
Jun. 30, 2018 |
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| Business Combinations [Abstract] |
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| Schedule of recognized identified assets acquired and liabilities assumed |
The following table summarizes the fair value of WTL as of May 31, 2018 (in thousands):
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WTL |
Property, plant and equipment |
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$ |
2,960 |
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Identifiable intangible assets - customer relationships(a)
|
|
930 |
|
Identifiable intangible assets - trade name(a)
|
|
650 |
|
Goodwill(b)
|
|
1,567 |
|
Total assets acquired |
|
$ |
6,107 |
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|
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a. |
Identifiable intangible assets were measured using a combination of income approaches. Trade names were valued using a "Relief-from-Royalty" method. Non-contractual customer relationships were valued using a "Multi-period excess earnings" method. Identifiable intangible assets will be amortized over 10-20 years.
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b. |
Goodwill was the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill recorded in connection with the acquisition is attributable to the assembled workforce and future profitability expected to arise from the acquired entity. |
The following table summarizes the fair value of Higher Power as of April 21, 2017 (in thousands):
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Higher Power |
Property, plant and equipment |
|
$ |
1,744 |
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Identifiable intangible assets - customer relationships |
|
1,613 |
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Goodwill (a)
|
|
643 |
|
Total assets acquired |
|
$ |
4,000 |
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|
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a. |
Goodwill was the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill recorded in connection with the acquisition is attributable to the assembled workforce and future profitability expected to arise from the acquired entity. |
The following table summarizes the fair value of the Chieftain Acquisition as of May 26, 2017 (in thousands):
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Total |
Property, plant and equipment (a)
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|
$ |
23,373 |
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Sand reserves (b)
|
|
20,910 |
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Total assets acquired |
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$ |
44,283 |
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|
|
|
Asset retirement obligation |
|
1,732 |
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Total liabilities assumed |
|
$ |
1,732 |
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Total allocation of purchase price |
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$ |
42,551 |
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Bargain purchase price (c,d)
|
|
(6,231 |
) |
Total purchase price |
|
$ |
36,320 |
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|
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a. |
Property, plant and equipment fair value measurements were prepared by utilizing a combined fair market value and cost approach. The market approach relies on comparability of assets using market data information. The cost approach places emphasis on the physical components and characteristics of the asset. It places reliance on estimated replacement cost, depreciation and economic obsolescence. |
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b. |
The fair value of the sand reserves was determined based on the excess cash flow method, a form of the income approach. The method provides a value based on the estimated remaining life of sand reserves, projected financial information and industry projections. |
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c. |
Amount reflected in unaudited condensed consolidated statements of comprehensive income (loss) reflected net of income taxes of $2.2 million.
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d. |
The fair value of the business was determined based on the excess cash flow method, a form of the income approach. |
See Summary of acquired assets and liabilities below
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SR Energy |
Cementing |
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Total |
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|
(in thousands) |
Cash and cash equivalents |
|
$ |
1,611 |
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$ |
1,060 |
|
|
$ |
2,671 |
|
Accounts receivable, net |
|
3,913 |
|
495 |
|
|
4,408 |
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Receivables from related parties |
|
3,684 |
|
1,418 |
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|
5,102 |
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Inventories |
|
— |
|
306 |
|
|
306 |
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Prepaid expenses |
|
35 |
|
32 |
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|
67 |
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Property, plant and equipment(a)
|
|
13,061 |
|
7,459 |
|
|
20,520 |
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Identifiable intangible assets - customer relationships(b)
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|
— |
|
1,140 |
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|
1,140 |
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Identifiable intangible assets - trade names(b)
|
|
550 |
|
270 |
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|
820 |
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Goodwill(c)
|
|
3,929 |
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6,264 |
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|
10,193 |
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Other assets |
|
7 |
|
— |
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|
7 |
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Total assets acquired |
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$ |
26,790 |
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$ |
18,444 |
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|
$ |
45,234 |
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|
|
|
|
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Accounts payable and accrued liabilities |
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$ |
5,890 |
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$ |
2,063 |
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$ |
7,953 |
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Long-term debt (d)
|
|
5,074 |
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2,000 |
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|
7,074 |
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Deferred tax liability |
|
3,039 |
|
1,406 |
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|
4,445 |
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Total liabilities assumed |
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$ |
14,003 |
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$ |
5,469 |
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|
$ |
19,472 |
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Net assets acquired |
|
$ |
12,787 |
|
$ |
12,975 |
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|
$ |
25,762 |
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a. |
Property, plant and equipment fair value measurements were prepared by utilizing a combined fair market value and cost approach. The market approach relies on comparability of assets using market data information. The cost approach places emphasis on the physical components and characteristics of the asset. It places reliance on estimated replacement cost, depreciation and economic obsolescence. |
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b. |
Identifiable intangible assets were measured using a combination of income approaches. Trade names were valued using a "Relief-from-Royalty" method. Non-contractual customer relationships were valued using a "Multi-period excess earnings" method. Identifiable intangible assets will be amortized over 5-10 years.
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c. |
Goodwill was the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill recorded in connection with the acquisition is attributable to the assembled workforces and future profitability expected to arise from the acquired entities. |
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d. |
Long-term debt assumed was paid off subsequent to the acquisitions. |
The following table summarizes the fair value of 5 Star as of July 1, 2017 (in thousands):
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5 Star |
Accounts receivable |
|
$ |
2,440 |
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Property, plant and equipment |
|
1,863 |
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Identifiable intangible assets - trade names (a)
|
|
300 |
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Goodwill (b)
|
|
248 |
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Total assets acquired |
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$ |
4,851 |
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|
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Long-term debt and other liabilities |
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$ |
2,413 |
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Total liabilities assumed |
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$ |
2,413 |
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Net assets acquired |
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$ |
2,438 |
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a. |
Identifiable intangible assets were measured using a combination of income approaches. Trade names were valued using a "Relief-from-Royalty" method. Identifiable intangible assets will be amortized over 10 years.
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b. |
Goodwill was the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill recorded in connection with the acquisition is attributable to the assembled workforce and future profitability expected to arise from the acquired entity. |
The following table summarizes the fair value of RTS as of June 15, 2018 (in thousands):
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RTS |
Inventory |
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$ |
180 |
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Property, plant and equipment |
|
7,787 |
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Goodwill(a)
|
|
133 |
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Total assets acquired |
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$ |
8,100 |
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a. |
Goodwill was the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill recorded in connection with the acquisition is attributable to the assembled workforce and future profitability expected to arise from the acquired entity. |
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| Business acquisition, pro forma information |
From the acquisition date through June 30, 2018, RTS provided the following activity (in thousands):
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2018 |
Revenues |
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$ |
630 |
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Net income(a)
|
|
7 |
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a. Includes depreciation expense of $0.1 million.
The following table presents unaudited pro forma information as if the acquisition of RTS had occurred as of January 1, 2017 (in thousands):
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Six Months Ended |
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June 30, 2018 |
|
June 30, 2017 |
Revenues |
$ |
10,160 |
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|
$ |
8,326 |
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Net income (loss) |
(848 |
) |
|
653 |
|
From the acquisition date through June 30, 2018, WTL provided the following activity (in thousands):
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2018 |
Revenues |
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$ |
595 |
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Net income(a)
|
|
5 |
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a. Includes depreciation and amortization expense of $0.1 million.
The following table presents unaudited pro forma information as if the acquisition of WTL had occurred as of January 1, 2017 (in thousands):
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Six Months Ended |
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June 30, 2018 |
|
June 30, 2017 |
Revenues |
$ |
3,354 |
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|
$ |
1,553 |
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Net income |
90 |
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|
62 |
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From the acquisition date through June 30, 2018, the Chieftain Assets provided the following activity (in thousands):
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2018 |
|
2017 |
Revenues(a)
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$ |
35,128 |
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$ |
22,847 |
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Net income(b)
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10,694 |
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|
5,520 |
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a.Includes intercompany revenues of $9.6 million and $12.3 million, respectively, for 2018 and 2017
b.Includes depreciation, depletion, amortization and accretion of $2.3 million and $2.8 million, respectively, for 2018 and 2017
The following table presents unaudited pro forma information as if the acquisition of the Chieftain Assets had occurred as of January 1, 2017 (in thousands):
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Six Months Ended June 30, 2017 |
Revenues |
$ |
1,312 |
|
Net loss |
(72 |
) |
From the acquisition date through June 30, 2018, Higher Power provided the following activity (in thousands):
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2018 |
|
2017 |
Revenues(a)
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$ |
122,734 |
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$ |
39,571 |
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Net income (b)
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|
16,205 |
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|
5,127 |
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a.Includes intercompany revenues of $111.4 million and $27.4 million, respectively for 2018 and 2017.
b.Includes depreciation and amortization expense of $2.3 million and $2.0 million, respectively, for 2018 and 2017.
The following table presents unaudited pro forma information as if the acquisition of Higher Power had occurred as of January 1, 2017 (in thousands):
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Six Months Ended June 30, 2017 |
Revenues |
$ |
4,481 |
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Net loss |
(411 |
) |
From the acquisition date through June 30, 2018, 5 Star provided the following activity (in thousands):
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2018 |
|
2017 |
Revenues(a)
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$ |
86,720 |
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$ |
25,216 |
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Net income (b)
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12,903 |
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|
4,191 |
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a.Includes intercompany revenues of $77.5 million and $16.0 million, respectively, for 2018 and 2017.
b.Includes depreciation and amortization expense of $1.0 million and $0.8 million, respectively, for 2018 and 2017.
The following table presents unaudited pro forma information as if the acquisition of 5 Star had occurred as of January 1, 2017 (in thousands):
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Six Months Ended June 30, 2017 |
Revenues |
$ |
6,332 |
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Net loss |
(282 |
) |
From the acquisition date through June 30, 2018, SR Energy and Cementing provided the following activity (in thousands):
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2018 |
|
2017 |
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SR Energy |
Cementing |
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SR Energy |
Cementing |
Revenues(a)
|
$ |
16,034 |
|
$ |
5,131 |
|
|
$ |
11,572 |
|
$ |
7,500 |
|
Net loss(b)
|
(1,586 |
) |
(806 |
) |
|
(1,626 |
) |
(1,963 |
) |
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a. |
Includes intercompany revenues of $1.6 million and $0.6 million for SR Energy in 2018 and 2017.
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b. |
Includes depreciation and amortization expense of $2.8 million and $1.0 million, respectively, for SR Energy and Cementing in 2018 and $3.4 million and $4.1 million, respectively, for SR Energy and Cementing in 2017.
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The following table presents unaudited pro forma information as if the acquisition of SR Energy and Cementing had occurred on January 1, 2017 (in thousands):
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Six Months Ended June 30, 2017 |
Revenues |
$ |
18,333 |
|
Net loss |
(1,612 |
) |
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| Schedule of business acquisitions by acquisition, consideration transferred |
The following tables summarize the fair values of Cementing and SR Energy as of June 5, 2017 (in thousands):
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Consideration attributable to Cementing (a)
|
|
$ |
12,975 |
|
Consideration attributable to SR Energy (a)
|
|
12,787 |
|
Total consideration transferred |
|
$ |
25,762 |
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a. See Summary of acquired assets and liabilities below
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