15. Acquisition

On May 6, 2013, the Company acquired substantially all of the assets of Trynex for the purpose of expanding its current market presence in the snow and ice segment. Total consideration paid was $26,734 including an estimated working capital adjustment. The acquisition was financed with $28,000 of revolver borrowings under the Company’s credit facility discussed in Note 5. The Company incurred $1,180 of transaction expenses related to this acquisition that are included in selling, general and administrative expense in the Consolidated Statements of Operations and Comprehensive Income.

The Trynex purchase agreement includes contingent consideration in the form of an earnout capped at $7,000. Under the earnout the former owners of Trynex are entitled to receive payments contingent upon the revenue growth and financial performance of the acquired business for the years 2014, 2015 and 2016. On August 5, 2013, the purchase agreement was amended to remove the requirement that the former owners of Trynex remain employed in the 2014 and 2015 performance periods, resulting in recognition of the fair value of the contingent consideration for 2014 and 2015 of $3,587 during the three months ended September 30, 2013. The requirement of continued employment remains in place for the 2016 performance period.

The following table summarizes the preliminary allocation of the purchase price paid to the fair value of the net assets acquired as of the acquisition date:

Accounts receivable	604

Inventories	4,130

Other current assets	29

Property and equipment	5,272

Goodwill	5,722

Intangible assets	12,960

Accounts payable and other liabilities	(1,983		)

Total	$	26,734

The goodwill for the acquisition is a result of acquiring and retaining the existing workforces and expected synergies from integrating the operations into the Company. Due to the limited amount of time since the acquisition of substantially all of the assets of Trynex, the initial purchase price allocation is preliminary as of September 30, 2013 as the Company has not completed its analysis of the fair value of inventories, property and equipment, intangible assets and income tax liabilities. The Company expects to be able to deduct amortization of goodwill for income tax purposes over a fifteen-year period.

The acquisition was accounted for under the purchase method, and accordingly, the results of operations are included in the Company’s financial statements from the date of acquisition. From the date of acquisition through September 30, 2013, the Trynex assets contributed $5,072 of revenues and ($4,596) of pre-tax operating losses, including $4,369 of certain purchase accounting expenses, related to the Company.