Note 5 Acquisitions

2011 Acquisitions

In July 2011, we paid $65 million in cash to acquire the remaining 50 percent equity interest of Peak, making it a wholly owned subsidiary on this date. Peak operates in Alaska, providing construction and rig moving services in icy conditions as well as light and heavy-duty moving, hauling and maintenance services. Previously, we held a 50 percent equity interest with a carrying value of $38.1 million that we had accounted for as an equity method investment. As a result of the acquisition, we consolidated the assets and liabilities of Peak during the third quarter of 2011 based on their respective fair values, in accordance with Topic 805 — Business Combinations. The excess of the estimated fair value of the assets and liabilities over the net carrying value of our previously held equity interest resulted in a gain of $13.1 million and is reflected in losses (gains) on sales and disposals of long-lived assets and other expense (income) for 2011. The excess of the purchase price over the fair values was $8.0 million and was recorded as goodwill.

2010 Acquisitions

In September 2010, we acquired through a tender offer and merger all of the outstanding common stock of NCPS (formerly, Superior) at a price per share equal to $22.12, for a cash purchase price of approximately $681.3 million. The effects of this acquisition and the operating results are included in the accompanying consolidated financial statements for the period subsequent to the effective date of the acquisition. Superior contributed revenues of $1.2 billion to our consolidated revenues for 2011.

As part of this acquisition, we recognized $7.0 million of acquisition-related transaction costs in losses (gains) on sales and disposals of long-lived assets and other expense (income) for the year ended December 31, 2010. The acquisition-related transaction costs consisted primarily of investment banking fees and legal and accounting costs. The acquisition enhanced our well-servicing and workover operations.

The following table provides the allocation of the purchase price as of the acquisition date. The purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on fair value. The excess of the purchase price over such fair values was recorded as goodwill.

Estimated Fair Value
(In thousands)

Assets:
Cash and cash equivalents	$		1,045
Accounts receivable	143,842
Inventory	33,963
Other current assets	7,612
Property, plant and equipment	415,000
Intangible assets	131,811
Goodwill	334,992
Other long-term assets	14,726
Total assets	$		1,082,991

Liabilities:
Current liabilities	$	78,277
Deferred income taxes	119,201
Long-term debt	124,792
Other long-term liabilities	10,258
Total liabilities	332,528


Preferred stock	69,188
Net assets acquired	$	681,275

Intangible assets

We identified other intangible assets associated with fracturing and fluid logistics services, including trade name, technology, employment contracts and non-compete agreements and customer relationships. The amortization of the intangible assets is calculated on a straight-line basis, which estimates the consumption of economic benefits. The following table summarizes the intangible assets recognized at the acquisition date, the monthly amortization expense as well as their estimated useful lives:

	Estimated Fair Value		Monthly Amortization		Estimated Useful Life
	(In thousands)
Superior trade name	$	88,767	$	740	10 years
Technology	5,294		88		5 years
Employment contracts and non-compete agreements	675		33		1-3 years
Customer relationships	37,075		308		10 years
Total identifable intangible assets	$	131,811	$	1,169

During 2012, we ceased using the Superior trade name and recorded an impairment of approximately $75.0 million to remove the remaining balance of the related intangible asset. See Note 3 — Impairment and Other Charges for additional information.

Goodwill

Goodwill of $335.0 million arising from the acquisition consisted largely of the expected synergies and economies of scale from combining the operations of Nabors and the former Superior. We have allocated the goodwill to our Completion Services operating segment. See Note 2 — Summary of Significant Account Policies for additional information.

Long-term debt

Long-term debt included a secured revolving credit facility and second lien notes at the acquisition date. As of December 31, 2010, all amounts outstanding had been repaid.

Other acquisitions

In December 2010, we purchased the business of Energy Contractors for a total cash purchase price of $53.4 million. The assets were comprised of vehicles and rig equipment and have been included in our U.S. Production Services operating segment. The purchase price was allocated to the net tangible and intangible assets acquired based on their fair value as of December 31, 2010. The excess of the purchase price over the fair values of the assets acquired was recorded as goodwill in the amount of $4.2 million.