Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2019

The Company's acquisition and divestiture activities are summarized below:



	Year Ended December 31,
	2019		2018		2017
	(in millions)
Acquisitions:
Purchase price	$	39.2	$	334.1	$	63.0
Net cash paid	$	32.9	$	333.2	$	47.5
Goodwill recorded	$	12.6	$	120.9	$	25.0

Acquisitions - ACG Materials

On December 5, 2018, we completed the stock acquisition of ACG Materials (“ACG”), a producer of specialty materials and aggregates which is included in our Construction Products Group. The purchase price of $309.1 million was funded with a combination of cash on-hand and a $180.0 million borrowing under the Company's credit facility. Acquisition-related transaction costs incurred after the Separation were insignificant. Costs incurred by the Former Parent prior to the Separation were included in the allocation of corporate costs in accordance with the methodology described in Note 1.

The acquisition was recorded as a business combination with valuations of the acquired assets and liabilities at their acquisition date fair value using level three inputs, defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents our final purchase price allocation (in millions):



Accounts receivable	$	23.8
Inventories	12.5
Property, plant, and equipment	77.8
Mineral reserves	137.3
Goodwill	105.5
Other assets	6.3
Accounts payable	(10.2		)
Accrued and other liabilities	(14.5		)
Capital lease obligations	(8.3		)
Deferred income taxes	(21.1		)
Total net assets acquired	$	309.1

The goodwill acquired, none of which is tax deductible, primarily relates to ACG's geographic footprint, market position, and existing workforce. Revenues included in the Consolidated Statement of Operations from the date of the acquisition were approximately $11.7 million during the year ended December 31, 2018, whereas operating profit during the same period was insignificant.

The following table represents the unaudited pro-forma consolidated operating results of the Company as if the ACG acquisition had been completed on January 1, 2017. The unaudited pro-forma information makes certain adjustments to depreciation, depletion, and amortization expense to reflect the fair value recognized in the purchase price allocation, as well as to align ACG's capital structure and debt financing with that of the Company at the acquisition date. As a measure of unaudited pro-forma earnings, we have presented income before income taxes because our effective tax rates for 2018 and 2017 were impacted by one-time effects of the Act that would be impracticable to calculate for ACG. The unaudited pro-forma information should not be considered indicative of the results that would have occurred if the acquisition had been completed on January 1, 2017, nor is such unaudited pro-forma information necessarily indicative of future results.



	Year Ended December 31, 2018		Year Ended December 31, 2017
	(in millions)
Revenues	$	1,604.1	$	1,594.4
Income before income taxes	$	97.6	$	133.6

Acquisitions - Other

In June 2019, we completed acquisitions of certain assets and liabilities of an inland barge components business within our Transportation Products Group and the acquisition of certain assets and liabilities of a construction aggregates business in our Construction Products Group. In August 2019, we completed the acquisitions of certain assets and liabilities of two construction aggregates businesses in our Construction Products Group. The total purchase price for the four businesses acquired in 2019 was $39.2 million, a portion of which includes estimated payments to the seller of a construction aggregates business over the next 10 years. The acquisitions have been recorded as business combinations based on preliminary valuations of the assets acquired and liabilities assumed at their acquisition date fair value using level three inputs. The valuation resulted in the recognition of $12.2 million of goodwill in our Transportation Products Group and $0.4 million in our Construction Products Group. Such assets and liabilities were not significant in relation to assets and liabilities at the consolidated and segment level.

In March 2018, we completed the acquisition of certain assets of an inland barge business with a purchase price and net cash paid of $25.0 million. The acquisition was recorded as a business combination based on valuations of the acquired assets and liabilities at their acquisition date fair value using level three inputs. The valuation resulted in the recognition of $9.5 million of goodwill in our Transportation Products Group. Such assets and liabilities were not significant in relation to assets and liabilities at the consolidated and combined or segment level.

In May 2017, we completed the acquisition of the assets of a lightweight aggregates business paid for with cash of $6.2 million. In October 2017, we completed the acquisition of the assets of a lightweight aggregates business paid for with shares of Trinity stock valued at $14.7 million. In July 2017, we completed the acquisition of the assets of a trench shoring products business for $42.1 million. All three acquisitions were in our Construction Products Group. These acquisitions were recorded as business combinations based on valuations of the acquired assets and liabilities at their acquisition date fair value using level three inputs. Such assets and liabilities were not significant in relation to assets and liabilities at the consolidated or segment level.

Acquisitions - Cherry

On January 6, 2020, we completed the stock acquisition of Cherry Industries, Inc. and affiliated entities (“Cherry”), a leading producer of natural and recycled aggregates in the Houston, Texas market which will be included in our Construction Products Group. The purchase price of approximately $298.0 million was funded with a combination of cash on-hand and advances under a new $150.0 million five-year term loan. See Note 7 Debt for additional information on our credit facility. Transaction costs incurred during the year ended December 31, 2019 related to the Cherry acquisition were not significant. The acquisition will be recorded as a business combination. We expect to complete our purchase price allocation as soon as reasonably possible not to exceed one year from the acquisition date. Due to the timing of the acquisition, additional quantitative disclosures are, at this time, impracticable.

Divestitures

During the fourth quarter of 2018, the Company completed the divestiture of certain businesses whose revenues were included in the Other component of the Energy Equipment Group. The net proceeds from these divestitures were not significant. Prior to the sales, the Company recognized a pre-tax impairment charge of $23.2 million on these businesses.

We have concluded that the divestiture of these businesses did not represent a strategic shift that would result in a material effect on our operations and financial results; therefore, these disposals have not been reflected in discontinued operations in our Consolidated and Combined Financial Statements.

There was no divestiture activity during the years ended December 31, 2019 and December 31, 2017.