Acquisitions

12 Months Ended

Dec. 31, 2019

ACQUISITIONS

On July 31, 2019, Apergy entered into an asset purchase agreement to acquire certain assets, which meet the definition of a business, used in the manufacturing of downhole monitoring systems. The acquisition is included among the consolidated subsidiaries reported in our Production & Automation Technologies segment and provides digital technology strategic to our artificial lift product offering.

The acquisition-date fair value of the consideration transferred consisted of the following:



(in thousands)
Cash	$	12,500
Contingent consideration ⁽¹⁾	1,500
Total consideration transferred	$	14,000

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(1) Contingent consideration is payable to the seller based on the acquired business exceeding a revenue target over an eighteen month period ending January 2021. Achievement of the revenue target is considered probable.

The following table summarizes the final fair values of the assets acquired at the acquisition date:



(in thousands)
Inventory	$	1,840
Customer relationships	2,650
Technology - Technical know-how	4,000
Goodwill	5,510
Total assets acquired	$	14,000

The amortization period is 15 years for acquired customer relationships and technology. The goodwill recognized as a result of the acquisition is tax deductible and primarily reflects the expected benefits to be derived from operational synergies.

In October 2017, Apergy acquired 100% of the voting stock of PCP Oil Tools S.A. and Ener Tools S.A. (“PCP Tools”), a supplier of progressive cavity pump products and services for total consideration of $8.8 million, net of cash acquired. This acquisition is a part of our Production & Automation Technologies segment and broadens our ability to supply customers in Argentina. We recorded non-deductible goodwill of $5.1 million, customer intangible assets of $4.5 million, and net working capital that is not material to the consolidated financial statements. The goodwill recorded as a result of the acquisition reflects the benefits expected to be derived from product line expansion and operational synergies. The intangible assets acquired are being amortized over nine years.

Results of operations of the acquired businesses have been included in our consolidated financial statements from their acquisition dates. Pro forma results of operations have not been presented as the effects of the acquisitions are not material to our consolidated financial statements.