4. Acquisitions

Acquisition of Iron Horse

On December 15, 2017, Target purchased 100% of the membership interests of Iron Horse in a transaction under common control (initially acquired by a TDR affiliate on July 31, 2017). Target acquired Iron Horse for an aggregate purchase price of $37.1 million and recorded the excess of the purchase price over the carrying amount of the net assets acquired as a dividend, amounting to $0.1 million. The following table summarizes the carrying amount of the assets acquired and liabilities assumed at the date of acquisition by Target on December 15, 2017:


Cash, cash equivalents and restricted cash	$	616
Other Assets		36
Property and equipment		14,720
Goodwill		8,065
Intangible assets		14,015
Total assets acquired		37,452

Other liabilities		(376)
Dividend		78
Net assets acquired	$	37,154

Intangible assets related to customer relationships represent the aggregate value of those relationships from existing contracts and future operations on a look-through basis, considering the end customers of Iron Horse. The intangible assets received by Target are being amortized on a straight-line basis over an estimated useful life of nine years from the date of the business combination. The useful life is based on a period of expected future cash flow used to measure the fair value of the intangible assets.

The purchase price allocation performed by the TDR affiliate at July 31, 2017, the acquisition date, resulted in the recognition of approximately $8.1 million of goodwill which is attributable to the Permian basin segment. The goodwill recognized is attributable to expected revenue synergies generated by the expansion of territory of workforce housing, and costs synergies resulting from the consolidation or elimination of certain functions. The goodwill is expected to be deductible for income tax purposes.

The Companies have included the results of operations and cash flows of Iron Horse from the date of acquisition by the TDR affiliate as common control existed as of the business combination date. The effects of intra-entity transactions on current assets, current liabilities, revenue and expenses have been eliminated.

Iron Horse contributed $13.1 million and $1.5 million to our revenue and income before income taxes, respectively, for 2017.

The following unaudited pro forma information presents consolidated financial information as if Iron Horse had been acquired at the beginning of 2017.


Period	Revenue		Income before taxes
2017 pro forma from January 1, 2017 to December 31, 2017	$	145,974	$	26,128

Signor Acquisition

On September 7, 2018, Bidco purchased 100% of the membership interests of Signor. Bidco acquired Signor for an aggregate purchase price of $201.5 million, excluding $15.5 million of cash and cash equivalents and restricted cash acquired. Included in the purchase price was $1.2 million of amounts owed to the sellers as a result of a subsequent working capital true-up adjustment recognized in accrued liabilities, with a corresponding increase to goodwill, as of December 31, 2018 in the accompanying consolidated balance sheets. The amount of the purchase price in excess of the fair value of the net assets acquired was recorded as goodwill.

The following table summarizes the allocation of the total purchase price to the net assets acquired and liabilities assumed at the date of acquisition by Bidco at estimated fair value:


Cash, cash equivalents and restricted cash	$	15,536
Accounts receivable		13,008
Property and equipment		79,026
Other current assets		581
Goodwill		26,115
Customer relationships		96,225
Total assets acquired		230,491

Accounts payable		(3,678)
Accrued expenses		(9,051)
Capital lease liability and note payable		(490)
Unearned revenue		(201)
Total liabilities assumed		(13,420)
Net assets acquired	$	217,071

The aggregate fair value of the acquired accounts receivable approximated the aggregate gross contractual amount. The contractual cash flows not expected to be collected at the acquisition date amounted to approximately $0.7 million.

Intangible assets related to customer relationships represent the aggregate value of those relationships from existing contracts and future operations on a look-through basis, considering the end customers of Signor. The intangible assets received by Bidco are being amortized on a straight-line basis over an estimated useful life of nine years from the date of the business combination.

The purchase price allocation performed resulted in the recognition of approximately $26.1 million of goodwill. The goodwill recognized is attributable to expected revenue synergies generated by the expansion of territory of workforce housing, and costs synergies resulting from the consolidation or elimination of certain functions. All of the goodwill is expected to be deductible for income tax purposes. All of the goodwill was allocated to the Permian Basin segment of our reportable segments discussed in Note 25.

The following unaudited pro forma information presents consolidated financial information as if Signor had been acquired as of January 1, 2017:


Period	Revenue		Income before taxes
2018 pro forma from January 1, 2018 to December 31, 2018	$	301,842	$	41,175
2017 pro forma from January 1, 2017 to December 31, 2017	$	172,972	$	22,097

Signor added $30.1 million and $12.5 million to our revenue and income before income taxes, respectively, for 2018.

These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Signor to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment, and intangible assets had been applied from January 1, 2017. This pro forma information is not necessarily indicative of the Company’s results of operations had the acquisition been completed on January 1, 2017, nor is it necessarily indicative of the Company’s future results. This pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition, and also does not reflect additional revenue opportunities following the acquisition.

2018 supplemental pro forma income before taxes was adjusted to exclude $5.2 million of acquisition-related costs incurred in 2018. 2017 supplemental pro forma income was adjusted to include these charges.

In connection with this acquisition, the Company incurred approximately $5.2 million of acquisition-related costs, which are recognized in selling, general, and administrative expenses in the accompanying consolidated statements of comprehensive income for the year ended December 31, 2018.

Superior Acquisition

On June 19, 2019, TLM, entered into a purchase agreement (the “Superior Purchase Agreement”) with Superior Lodging, LLC, Superior Lodging Orla South, LLC, and Superior Lodging Kermit, LLC (collectively, the “Superior Sellers”), and certain other parties, pursuant to which TLM acquired substantially all of the assets in connection with three workforce communities in the Delaware Basin of West Texas, including temporary housing facilities and underlying real estate (the “Communities”). Pursuant to the Superior Purchase Agreement, TLM acquired the Communities for a purchase price of $30.0 million in cash, which represents the acquisition date fair value of consideration transferred. The purchase price was funded by drawing on the New ABL Facility discussed in Note 11. The Superior Purchase Agreement provided for a simultaneous signing and closing on June 19, 2019. This acquisition further expands the Company’s presence in the Permian Basin. Immediately prior to the acquisition of the Communities, TLM provided management and catering services to the Superior Sellers at two of the Communities. At the time of the acquisition, all three Communities were fully operational and provided vertically integrated comprehensive hospitality services consistent with Target’s business. Certain affiliates of the Superior Sellers will continue to lease 140 beds in the Communities for the next year.

The following table summarizes the allocation of the total purchase price to the net assets acquired and liabilities assumed at the date of acquisition by TLM at estimated fair value:


Property and equipment	$	18,342
Customer relationships		4,800
Goodwill		6,858
Total assets acquired	$	30,000

Intangible assets related to customer relationships represent the aggregate value of those relationships from existing arrangements and future operations on a look-through basis, considering the end customers. The intangible assets received are being amortized on a straight-line basis over an estimated useful life of nine years from the date of the business combination.

The following unaudited pro forma information presents consolidated financial information as if Superior had been acquired as of January 1, 2018:


Period	Revenue		Income before taxes
2019 pro forma from January 1, 2019 to December 31, 2019	$	325,845	$	15,557
2018 pro forma from January 1, 2018 to December 31, 2018	$	252,706	$	20,553

Superior added $7.8 million and $4.0 million to our revenue and income before income taxes, respectively, for year ended December 31, 2019.

These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Superior to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment, and intangible assets had been applied from January 1, 2018. This pro forma information is not necessarily indicative of the Company’s results of operations had the acquisition been completed on January 1, 2018, nor is it necessarily indicative of the Company’s future results. This pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition, and also does not reflect additional revenue opportunities following the acquisition.

In connection with this acquisition, the Company incurred approximately $0.4 million of acquisition-related costs, which are recognized in selling, general, and administrative expenses in the accompanying consolidated statement of comprehensive income for the ended December 31, 2019. 2019 supplemental pro-forma income before taxes was adjusted to exclude these acquisition-related costs. 2018 supplemental pro-forma income before income taxes was adjusted to include these charges.

The purchase price allocation performed by the Company resulted in the recognition of $6.9 million of goodwill. The goodwill recognized is attributable to expected revenue synergies generated by the territorial expansion of workforce housing, and costs synergies resulting from the consolidation or elimination of certain functions. All of the goodwill is expected to be deductible for income tax purposes. All of the goodwill was allocated to the Permian Basin segment of our reportable segments discussed in Note 25.

ProPetro

On July 1, 2019, TLM purchased a 168-room community from ProPetro Services, Inc. (“ProPetro”) for an aggregate purchase price of $5.0 million in cash, which represents the acquisition date fair value of consideration transferred. The purchase price was funded by cash on hand as of the acquisition date. The acquisition was accounted for as an asset acquisition. The Company allocated the total purchase price to identifiable tangible assets based on their estimated relative fair values, which resulted in the entire purchase price being allocated to property and equipment.