3.Business Acquisitions

TBC Acquisition

On April 9, 2017, T.A.S. Commercial Concrete Construction, LLC, a wholly owned subsidiary of Orion Group Holdings, Inc. ("the Company") entered into a Stock Purchase Agreement ("the Agreement") for the purchase of all the issued and outstanding shares (the "shares") of Tony Bagliore Concrete, Inc. ("TBC"), a Texas corporation. The Company and the two sole shareholders of TBC closed the purchase transactions on April 10, 2017 (the "Closing Date"). Upon the terms of and subject to the conditions set forth in the Agreement, the total aggregate consideration paid on the Closing Date by the Company to the Sellers for the shares was $6.0 million in cash. In addition however, if certain target considerations were met in future periods, an additional cash payment of up to $2.0 million would become payable to the Seller.

The purpose of the acquisition was primarily to achieve growth by expanding the Company’s current service offerings in addition to expansion into new markets. The tangible assets acquired include accounts receivable, retainage and fixed assets.

Under the acquisition method of accounting, the total acquisition consideration is allocated to the acquired tangible and intangible assets and assumed liabilities of TBC based on their estimated fair values as of the closing of the acquisition. The table below outlines the total actual acquisition consideration allocated based on the preliminary fair values of TBC’s tangible and intangible assets and liabilities as of April 9, 2017:


Accounts receivable	$	3,239
Retainage		1,860
Fixed assets, net		2,098
Other		9
Goodwill		2,562
Other intangible assets		878
Accounts payable		(2,017)
Accrued expenses and other current liabilities		(1,080)
Contingent consideration		(456)
Deferred tax liability		(1,093)
Total Acquisition Consideration at April 9, 2017	$	6,000
Working capital adjustment (all attributable to Goodwill)		557
Total Acquisition Consideration	$	6,557

The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed was allocated to goodwill. The goodwill of $3.1 million arising from the acquisition consisted primarily of synergies and business opportunities that were expected to be realized from the purchase of TBC. The goodwill was not deductible for income tax purposes. In the fourth quarter of 2018, the Company’s annual goodwill impairment test indicated that its goodwill was fully impaired, primarily due to a decline in the Company’s market capitalization and as a result the goodwill related to the TBC acquisition was written off.

Finite-lived intangible assets acquired include customer relationships and contractual backlog. (See Note 10).

The fixed assets acquired include construction equipment as well as automobiles and trucks and will be depreciated in accordance with Company policy, generally three to 15 years.

As stated in the Agreement, the Company agreed to pay the sellers up to $2.0 million in cash, if earned, as additional purchase consideration. The seller’s right to receive the contingent consideration, if any, was to be based on the Company’s achievement of certain future financial targets. The Company measured the fair value of the contingent consideration at the Acquisition Date, and determined that fair value to be approximately $0.5 million, as shown in the table above. This amount of contingent liability was initially classified on the Consolidated Balance Sheets as an other long-term liability. During 2019 it was determined that the financial targets had not been met. The $0.5 million liability was removed from the balance sheet and reflected as component of other income in the Consolidated Statement of Operations.