NOTE 4. ACQUISITIONS

Magna Acquisition

On June 24, 2016, CSL indirectly acquired substantially all of the assets of Magna, a privately held oilfield services company that provides workover, plug and abandonment, fluid management and wireline services, for an aggregate purchase price of approximately $12.7 million to gain market share in the industry (the “Magna Acquisition”). Magna’s operations are focused primarily in Colorado, Wyoming and North Dakota. Ranger Services accounted for this acquisition as a business combination. No goodwill was recorded in conjunction with the Magna Acquisition as the total purchase consideration approximated the fair value of assets acquired and liabilities assumed.

A summary of the fair value of the assets acquired and the liabilities assumed in connection with the Magna Acquisition is set forth below (in millions):


Purchase price
Cash paid by CSL	$	12.7
Total purchase price	$	12.7
Purchase price allocation
Cash	$	1.2
Accounts receivable		3.0
Prepaid expenses and other		1.2
Property, plant and equipment		8.8
Tradename		0.1
Total assets acquired		14.3
Accounts payable		(1.0)
Accrued expenses		(0.6)
Total liabilities assumed		(1.6)
Allocated purchase price	$	12.7

On September 28, 2016, Magna was contributed to Ranger Services by CSL. As this was a transaction among entities under common control, the assets and liabilities were recorded at their historical carrying values from the date of the initial acquisition by CSL on June 24, 2016. The costs related to the transaction were $0.1 million and were expensed during 2016 and are included in the Company’s consolidated statements of operations for the year ended December 31, 2016.

Bayou Acquisition

On October 3, 2016, Ranger Services acquired Bayou, a privately held oilfield services company that provides workover, plug and abandonment and fluid management services, for an aggregate purchase price of approximately $50.5 million, which included an approximate 35% equity interest in Ranger Services (the “Bayou Acquisition”). Bayou’s operations are focused primarily in Colorado and North Dakota. Ranger accounted for this acquisition as a business combination.

A summary of the fair value of the assets acquired and the liabilities assumed in connection with the Bayou Acquisition is set forth below (in millions):


Purchase price
Cash	$	17.5
Equity issued		33.0
Total purchase price	$	50.5
Purchase price allocation
Prepaid expenses & other	$	0.5
Property, plant and equipment		40.0
Land		0.6
Building and site improvements		2.3
Customer relationships		9.3
Total assets acquired		52.7
Accounts payable		(1.8)
Accrued expenses		(1.0)
Other long‑term liabilities		(1.0)
Total liabilities assumed		(3.8)
Goodwill		1.6
Allocated purchase price	$	50.5

Goodwill represents trained and assembled workforce which does not meet the separability criterion. The costs related to the transaction were $0.4 million and were expensed during 2016 in the Company’s consolidated statements of operations for the year ended December 31, 2016.

ESCO Acquisition

In connection with the closing of our offering on August 16, 2017, the Company closed on the ESCO Acquisition for total consideration of $59.7 million, consisting of $47.7 million in cash, $7.0 million in secured seller notes and $5.0 million in shares of Ranger’s Class A Common Stock based on the initial public offering price of $14.50 per share.

The ESCO Acquisition assets were primarily engaged in the completion, repair and workover of oil and gas wells for its customers. The ESCO Acquisition is being accounted for as a business combination. Goodwill is recorded in conjunction with the ESCO Acquisition as the total purchase consideration exceeds the approximated fair value of assets acquired and liabilities assumed.

The following information below represents the preliminary purchase allocation related to the ESCO Acquisition (in millions):


Purchase price
Cash	$	47.7
Seller's notes		7.0
Equity issued		5.0
Total purchase price	$	59.7
Purchase price allocation
Cash	$	-
Accounts receivable		6.6
Property, plant and equipment		45.9
Intangible assets		2.2
Other assets		0.3
Total assets acquired		55.0
Accounts payable		(0.5)
Accrued expenses		(2.2)
Total liabilities assumed		(2.7)
Goodwill		7.4
Allocated purchase price	$	59.7

Goodwill represents trained and assembled workforce which does not meet the separability criterion. The costs related to the transaction were $1.2 million and were expensed during 2017 in the Company's consolidated statements of operations for the year ended December 31, 2017.

The following is supplemental pro-forma revenue, operating loss, and net loss had the Magna, Bayou and ESCO Acquisitions occurred as of January 1, 2015 (in millions):


		Year Ended December 31,
	2017			2016			2015
Supplemental Pro Forma:
Revenue		$	176.7		$	132.8		$	180.2
Operating Loss		$	(22.6)		$	(31.3)		$	(58.1)
Net Loss		$	(29.5)		$	(33.3)		$	(62.2)

The supplemental pro forma revenue, operating loss, and net loss are presented for informational purposes only and may not necessarily reflect the future results of operations of the Company or what the results of operations would have been had the Company owned and operated Magna, Bayou and the ESCO Acquisition assets since January 1, 2015. There are no material non-recurring adjustments included in these supplemental pro forma items.

We reported revenue during the year ended December 31, 2017 that included $14.1 million generated from the assets acquired in connection with the ESCO Acquisition. We reported revenue during the year ended December 31, 2016 that included $28.4 million generated from the assets acquired in connection with the Magna and Bayou acquisitions.