ACQUISITIONS

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

ACQUISITIONS

3. ACQUISITIONS

Since January 1, 2015, the Company has acquired two businesses in the U.S. These acquisitions have allowed the Company to expand its products and service capabilities and offer its customers a greater breadth of solutions for their electrical power distribution and backup power needs. A summary of the acquisitions is as follows:

Business Acquired	Closing	Net Assets Acquired (in 000s)		Segment	Primary Form of Consideration
Harmonics Holdings Inc.	01/16/15		1,043	T&D Solutions	Seller note/debt forgiveness
Pacific Power Systems Integration, Inc.	08/01/15		2,013	T&D Solutions	Cash
		$	3,056

Each of the acquired businesses has been included in the Company’s results of operations since the date of its respective closing.

On January 16, 2015, the Company, through its Jefferson Electric, Inc. subsidiary, acquired substantially all the assets comprising the business of Harmonics Holdings Inc. (“Harmonics”), consisting primarily of intellectual property, accounts receivable and machinery and equipment. Harmonics is a Connecticut-based specialty provider of equipment that incorporates a patented technology for the elimination of harmonic currents in power distribution systems. The transaction was accounted for under the acquisition method of accounting and the Company funded the acquisition from available cash on hand, a seller note and forgiveness of debt.  

On August 1, 2015, the Company, through its Pioneer Custom Electrical Products Corp. subsidiary, acquired substantially all the assets comprising the business of Pacific Power Systems Integration, Inc. (“Pacific”). Located in Santa Fe Springs, California, Pacific is a manufacturer of low and medium voltage switchgear, primarily serving customers in the oil refining, mass transit and utility sectors. The transaction was accounted for under the acquisition method of accounting and the Company funded the cash consideration for the acquisition with debt drawn under one of the Company’s revolving credit facilities.

The following table summarizes the consideration paid for the Harmonics and Pacific acquisitions and presents the allocation of the amount to the net tangible and identifiable intangible assets based on their estimated fair values as of January 16, 2015 and August 1, 2015, respectively:

	Harmonics Acquisition		Pacific Acquisition
Purchase Price
Cash consideration	$	93	$	2,013
Forgiveness of trade payables and indebtedness due to purchaser		609		—
Deferred payments due to seller		341		—
	$	1,043	$	2,013
Initial Purchase Price Allocation
Current assets	$	21	$	18
Property, plant and equipment		4		182
Identifiable intangible assets		995		1,562
Goodwill		23		251
Net assets acquired	$	1,043	$	2,013

The acquisitions resulted in the recognition of goodwill in the Company’s consolidated financial statements because the purchase prices exceeded the net tangible asset values, and reflects the future net income and cash flow potential of the acquired businesses.

The following table summarizes the major classes of intangible assets arising from the acquisition of Harmonics and Pacific, their respective amortization periods, and the amount of amortization expense recognized during the year ended December 31, 2016:

	Weighted Average Amortization Years		Harmonics Acquisition
Acquired Intangible Assets
Customer relationships		10	$	319
Non-compete agreements		5		75
Developed technology		10		492
Trademark		Indefinite		26
Technology-related industry accreditations		Indefinite		83
			$	995
Amortization expense recorded during the year ended December 31, 2016			$	93

	Weighted Average Amortization Years		Pacific Acquisition
Acquired Intangible Assets (a)
Customer relationships		13	$	512
Non-compete agreements		7		180
Technology-related industry accreditations		Indefinite		870
			$	1,562
Amortization expense recorded during the year ended December 31, 2016			$	62

(a) In connection with completing its purchase price allocation certain assets were identified and reclassed in 2016.

The Company incurred approximately $13 of transaction costs related to the Harmonics acquisition, and $43 related to the Pacific acquisition, during the year ended December 31, 2015 that are reflected in the Company’s statement of operations as a period expense.

The Company reported Harmonics and Pacific results of operations in the T&D Solutions segment for the year ended December 31, 2016 and 2015.

There were no acquisitions in 2016.