13. Acquisitions

For the nine months ended September 30, 2015, the Company completed six acquisitions for an aggregate purchase price consideration of approximately $431 million. These acquisitions primarily expand NOW’s market in the United States, the United Kingdom, Australia and Norway. The Company has included the financial results of the acquisitions in its consolidated financial statements from the date of acquisition. In connection with one of the acquisitions, the Company agreed to make contingent consideration payments of up to $6 million upon the attainment of certain profitability milestones. At the acquisition date, the Company estimated the fair value for contingent consideration to be approximately $4 million by using a Monte Carlo simulation. Changes in fair value of the contingent consideration liability subsequent to the acquisition date, such as changes in the probability assessment, are recognized in the period when the change in estimated fair value occurs.

The Company completed its preliminary valuations as of the applicable acquisition date of the acquired net assets and recognized goodwill of $221 million and intangible assets of $84 million which is subject to change. If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the date of acquisition), including through asset appraisals and learning more about the newly acquired businesses, the Company will refine its estimates of fair value to allocate the purchase price more accurately; any such revisions are not expected to be significant.

The Company has not presented supplemental pro forma information because the acquired operations would not have materially impacted the Company’s consolidated operating results.

In July 2015, the Company entered into an agreement to purchase the business of Challenger Industries, Inc. The completion of this acquisition is subject to customary closing conditions. Challenger Industries, Inc. is a pipe, valves and fittings supplier for the downstream, midstream and upstream energy markets.

Following is the purchase price allocation detail (in millions):

	As of September 30, 2015
Purchase price including contingent consideration				$	431
Less: cash acquired					(29	)
Net purchase price					402
Fair value of net assets acquired:
Current assets other than cash		145
Property, plant and equipment		50
Trade names (weighted average useful lives of 7 years)		22
Customer relationships (weighted average useful lives of 8 years)		62
Current liabilities		(69	)
Deferred tax liabilities, net		(28	)
Other non-current liability		(1	)
Total fair value of net assets acquired					181
Goodwill ⁽¹⁾				$	221

⁽¹⁾

The amount of goodwill represents the excess of its purchase price over the fair value of net assets acquired.