Related Party Transaction

12 Months Ended

Sep. 30, 2016

Related Party Transaction

Related Party Transaction

14. Related Party Transactions

In addition to transactions disclosed elsewhere, Headwaters was involved in the following transactions with related parties. A current officer (and former owner) of one of Headwaters’ operating subsidiaries made a direct investment of $500,000 in one of the subsidiary’s customers prior to Headwaters acquiring the subsidiary in 2016. The investment remained in place as of September 30, 2016. In addition, also prior to the date of acquisition, the officer deposited $1,000,000 in a bank account that collateralizes a line of credit used by the customer in its business operations, which arrangement also existed at September 30, 2016. Sales to that customer in 2016, from the date of acquisition through September 30, 2016, were less than $0.1 million.

A director of Headwaters, who retired from the Board in 2014, was also a principal in one of the insurance brokerage companies Headwaters uses to purchase certain insurance benefits for its employees. Commissions paid to that company by providers of insurance services to Headwaters totaled approximately $0.1 million in 2014.

Until December 2013, when the contract was terminated, a majority of one of Headwaters’ subsidiary’s transportation needs was provided by a company, two of the principals of which are related to an officer of the subsidiary. Costs incurred were approximately $1.4 million in 2014.