Acquisitions

The Company accounts for its acquisitions under the acquisition method, and accordingly the results of operations of acquired entities are included in the Company’s condensed consolidated financial statements from the acquisition date. The purchase price is allocated to the assets acquired based on estimated fair values at the acquisition date, with the excess of purchase price over the estimated fair value of the net assets acquired recorded as goodwill. Purchase accounting adjustments associated with the intangible asset valuations have been recorded as of March 31, 2017. The fair value of acquired intangible assets, primarily related to tradenames and customer relationships, was estimated by applying an income approach. That measure is based on significant Level 3 inputs not observable in the market. Key assumptions were developed based on the Company’s historical experience, future projections and comparable market data include future cash flows, long-term growth rates, royalty rates, attrition rates and discount rates.

Dominion Interior Supply

On January 1, 2017, the Company acquired the operations and certain assets of Dominion Interior Supply Corporation and Dominion Interior Supply of Roanoke LLC (collectively "Dominion Interior Supply") for a total purchase price of $13.1 million, subject to normal working capital adjustments. Dominion Interior Supply was a supplier of suspended ceiling systems to commercial and residential developers in the Virginia and North Carolina areas. The acquisition was accounted for as a business combination under the acquisition method of accounting. Accordingly, the assets acquired and liabilities assumed were recorded at fair value with the remaining purchase price recorded as goodwill. The Company estimated the fair value of the assets acquired and liabilities assumed as part of the business combination, including working capital, property and equipment, and customer relationships. The purchase price allocation for the acquisition is preliminary and subject to adjustment as additional information is obtained about facts and circumstances that existed as of the acquisition date.



(in thousands)	Dominion Interior Supply
Assets acquired:
Accounts receivable	$	1,425
Other receivables	88
Inventories	1,119
Prepaids and other current assets	12
Property and equipment	476
Goodwill	7,192
Intangible assets	3,300
Other assets	5
Total assets acquired:	13,617
Liabilities assumed:
Accounts payable	(396		)
Accrued expenses and other current liabilities	(26		)
Total liabilities assumed	(422		)
Total net assets acquired	$	13,195

The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. Goodwill attributable to the acquisition has been recorded as a non-current asset and is not amortized, but is subject to review at least on an annual basis for impairment. Goodwill recognized was primarily attributable to expected operating efficiencies and expansion opportunities in the business acquired. Goodwill and intangible assets recognized from the acquisition are expected to be deductible for tax purposes. The acquisition was treated as an asset purchase for tax purposes. Generally, the most significant intangible asset acquired is customer relationships.