Acquisitions

6 Months Ended

Jun. 30, 2011

Acquisitions [Abstract]

Acquisitions

3. Acquisitions

On March 1, 2009, the Company acquired International Lift Systems (“ILS”), a Louisiana limited partnership.  As a result of this acquisition, the Company entered into a hold back agreement with the former owners of ILS.  The total hold back is $4.5 million payable in three equal installments of $1.5 million each plus interest.  Interest is calculated annually at 4% of the remaining balance of the hold back portion.  The first installment was paid on March 1, 2010; the second installment, plus interest to date, was paid on March 1, 2011; and the third installment, plus interest to date, is payable on March 1, 2012.  These hold back payments are not contingent upon any subsequent events.  At June 30, 2011, the liabilities for this hold back payment was included in the accrued liabilities section of the Company’s condensed consolidated balance sheet.

On November 1, 2010, the Company completed the acquisition of Petro Hydraulic Lift Systems, LLC (“PHL”) and certain related companies, based in South Louisiana.  PHL specializes in the design, manufacture and leasing of hydraulic rod pumping units for oil and gas wells.  In connection with the acquisition, the Company also entered into a royalty agreement with the former owners of PHL.  The agreement is for a ten year period, beginning November 1, 2010, and is payable at a rate of 5% for the first five years and 8% for the subsequent five years.  Royalties are payable quarterly and are based on product revenues.

Revenues and earnings to date for the PHL acquisition are not material.  Pro forma schedules have not been included as the impact on the prior and current periods presented is not material.

The PHL preliminary purchase price allocation, which is based on relevant facts and circumstances and discussions with an independent third-party consultant, are subject to change upon completion of the final valuation analysis by the Company’s management.  The final valuation for PHL, which is required to be completed by October 2011, is not expected to result in material changes to the preliminary allocations.