Business Combinations

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Business Combinations

NOTE 12 – BUSINESS COMBINATIONS

As part of our ongoing strategy to increase market share in certain markets, we completed three business combinations during the year ended December 31, 2014, two business combinations during the year ended December 31, 2013 and two during the year ended December 31, 2012. The goodwill to be recognized in conjunction with these business combinations is attributable to expected synergies. Goodwill resulting from each acquisition is not expected to be deductible for tax purposes.

2014

On March 24, 2014, we acquired 100% of the common stock of U.S. Insulation Corp. (“U.S. Insulation”), on August 11, 2014, we acquired 100% of the common stock of Marv’s Insulation, Inc. (“Marv’s Insulation”) and on November 10, 2014, we acquired substantially all of the assets of Installed Building Systems (“IBS”). The purchase price of our 2014 acquisitions, in aggregate, consisted of cash of $12,417 and seller obligations of $3,544. Purchase consideration related to 2014 business combinations is deemed to be preliminary in accordance with generally accepted accounting principles which allow for adjustments to acquired assets and liabilities for up to one year from the acquisition date. Revenue and net income, in aggregate, of these three entities since their dates of acquisition included in our Consolidated Statement of Operations for the year ended December 31, 2014 were $13,492 and $938, respectively.

2013

On March 16, 2013, we acquired 100% of the membership interests of Ace Insulation Contractors, Inc. (“Ace”) and on November 1, 2013 we acquired 100% of the membership interest of KMB Contracting Services, Inc. (“KMB”). The purchase price of our 2013 acquisitions consisted of cash of $1,181 and a seller obligation for $380. We combined Ace and KMB with existing branches upon acquisition and as such, we are unable to differentiate the results of operations between Ace, KMB, and the existing branches for the years ended December 31, 2014 and December 31, 2013.

2012

On August 31, 2012, we acquired 100% of the outstanding membership interest of TCI and 87.5% of the issued and outstanding capital stock of a subsidiary of TCI. Simultaneous with the purchase of TCI, we purchased the remaining 12.5% of issued and outstanding capital stock of the subsidiary for $571, which was paid in the form of a seller note. The purchase price consisted of 11.5% (or 2,533,908 shares, which is the number of shares after a 19.5-for-one stock split) of IBP common stock, which was valued at $4,100 at the date of the transaction. See Note 1, Organization, “2014 Initial Public Offering (IPO),” for further information on the stock split.

On November 16, 2012, we acquired 100% of the membership interest of Accurate Building Products Inc. The purchase price consisted of cash of $1,198 and a note for $80. Revenue and net loss for the two entities acquired in 2012 since their dates of acquisition in our Consolidated Statement of Operations for the year ended December 31, 2012 were $14,097 and $1,018, respectively.

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions approximated the following:

	2014			2013			2012
Cash	$	53		$	—		$	375
Accounts receivable		4,666			213			5,486
Inventory		1,315			68			2,548
Note receivable		—			—			171
Other current assets		195			37			291
Property and equipment		1,576			338			468
Intangibles		7,111			1,332			5,513
Goodwill		4,065			182			834
Accounts payable and accrued expenses		(2,505	)		(609	)		(7,852	)
Deferred tax liability		(515	)		—			(1,387	)
Long-term debt		—			—			(498	)
Total purchase price	$	15,961		$	1,561		$	5,949
Fair value of common stock issued	$	—		$	—		$	4,100
Seller obligations		3,544			380			651
Cash paid		12,417			1,181			1,198
Total purchase price	$	15,961		$	1,561		$	5,949

Estimates of acquired intangible assets related to the acquisitions are as follows:

	2014				2013				2012
Acquired intangibles assets	Estimated Fair Value		Weighted Average Estimated Useful Life (yrs)		Estimated Fair Value		Weighted Average Estimated Useful Life (yrs)		Estimated Fair Value		Weighted Average Estimated Useful Life (yrs)
Customer relationships	$	4,708		14	$	972		10	$	3,241		10
Trademarks and trade names		1,799		15		338		15		2,067		9
Non-competition agreements		604		5		22		5		205		3

Pro Forma Information (unaudited)

The unaudited pro forma information has been prepared as if the 2014 acquisitions had taken place on January 1, 2013, and the 2013 acquisitions had taken place on January 1, 2012. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transactions actually taken place on January 1, 2013 and 2012, and the unaudited pro forma information does not purport to be indicative of future financial operating results.

	Pro Forma for the years ended December 31,
	2014			2013		2012
Net revenue	$	537,336		$	459,195	$	334,885
Net income (loss)		16,097			6,811		(3,499	)
Net (loss) income attributable to common stockholders		(3,800	)		588		(9,028	)
Net (loss) income per share attributable to common stockholders (basic and diluted)		(0.13	)		0.03		(0.41	)

Unaudited pro forma net income (loss) has been calculated after adjusting our consolidated results to reflect additional intangible asset amortization expense of $435, $614 and $567 for the years ended December 31, 2014, 2013 and 2012, respectively.