Business Combinations

3 Months Ended

Mar. 31, 2015

Business Combinations

Business Combinations

Note 8 — Business Combinations

On February 28, 2015, the Company acquired Aevenia, Inc. (“Aevenia”) for approximately $23 million in cash. Aevenia has been re-branded as Primoris AV, Energy and Electrical Construction Corporation (“Primoris AV”), and operates as part of Primoris’ Energy segment. Headquartered in Moorhead, Minnesota, Primoris AV is an energy and electrical construction company. For the year ended December 31, 2014, Primoris AV generated operating income of $4.2 million on revenues of $44.4 million. The estimated value of the assets purchased and liabilities assumed on the acquisition date included $4.0 million in current assets, $2.3 million in current liabilities, plant and equipment of $11.2 million and $9.3 million in intangible assets and goodwill. The Company has temporarily included the $9.3 million value as part of goodwill at March 31, 2015. Due to the short period of time between the acquisition date and this report, the estimated values are preliminary and subject to change.

Primoris AV specializes in overhead and underground line work, substations, telecom/fiber, and certain other client-specific on-demand call out services. The majority of their work is delivered under unit-price Master Services Agreements (“MSAs”). Primoris AV has operations in Minnesota, North Dakota, South Dakota and Iowa. The Company believes there are opportunities for Primoris AV to grow sales by performing in-house work for other Primoris subsidiaries and to expand the Company’s offerings to new geographies in the Midwest.

Supplemental Unaudited Pro Forma Information for the three months ended March 31, 2015 and 2014

The following pro forma information for the three months ended March 31, 2015 and 2014 presents the results of operations of the Company as if the Primoris AV acquisition and the 2014 acquisitions of Vadnais, Surber, Ram-Fab and Williams had all occurred at the beginning of 2014. The supplemental pro forma information has been adjusted to include:

· the pro forma impact of amortization of intangible assets and depreciation of property, plant and equipment, based on the purchase price allocations;

· the pro forma impact of the expense associated with amortization of the discount for the fair value of the contingent consideration (related to the 2014 Vadnais, Surber and Ram-fab acquisitions) for potential earnout liabilities that may be achieved during the years 2015 through 2017; and

· the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 39.0% for the three months ended March 31, 2015 and the same period in 2014.

The pro forma results are presented for illustrative purposes only and are not necessarily indicative of, or intended to represent, the results that would have been achieved had the various acquisitions been completed on January 1, 2014.  For example, the pro forma results do not reflect any operating efficiencies and associated cost savings that the Company might have achieved with respect to the Primoris AV acquisition.

	Three months ended March 31,
	2015		2014
Revenues	395,778		483,809
Income before provision for income taxes	180		16,168
Net income attributable to Primoris	118		9,499
Weighted average common shares outstanding:
Basic	51,572		51,610
Diluted	51,726		51,714
Earnings per share:
Basic	$	0.00	$	0.18
Diluted	$	0.00	$	0.18