NOTE 2 – ACQUISITIONS:

Acquisition of Åkers

On March 3, 2016, the Corporation acquired 100% of the voting equity interest of Åkers from Altor Fund II GP Limited. The purchase price approximated $74,155 and was comprised of $29,399 in cash, $22,619 in the form of three-year promissory notes (Note 8), and 1,776,604 shares of common stock of the Corporation which, based on the closing price of the Corporation’s common stock as of the date of closing, had a fair value of $22,137.

The acquisition added roll production facilities in Sweden, the United States, Slovenia, and China; and a number of sales offices. It enabled cast roll production in the United States, forged roll production in Europe, and a low-cost product alternative for customers.

Operating results of the acquired entities are included in the Forged and Cast Engineered Products segment from the date of acquisition. For the ten months ended December 31, 2016, net sales for Åkers approximated $121,079 and loss before income taxes, including the effects of purchase accounting, approximated $10,130.

The fair value of assets acquired and liabilities assumed as of the date of acquisition is as follows:

Current assets (excluding inventories)	$	41,703
Inventories		30,332
Property, plant and equipment		71,871
Intangible assets		11,784
Other noncurrent assets		8,068
Current liabilities		(71,690	)
Noncurrent liabilities		(43,153	)
Net assets acquired		48,915
Noncontrolling interest		(2,019	)
Goodwill		27,259
Base purchase price	$	74,155

Goodwill is not amortized but is tested for impairment at the reporting unit level annually, as of October 1, or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Based on the first step of the two-step quantitative goodwill impairment test performed as of October 1, 2016, the Corporation determined that the carrying value of the Forged and Cast Engineered Products reporting unit was greater than its estimated fair value, and the second step of the two-step quantitative goodwill impairment test was performed to determine the amount of the impairment charge.

As a result of the second step evaluation, the Corporation determined that the goodwill reported in the Forged and Cast Engineered Products reporting unit was fully impaired, primarily due to depressed market conditions and limitations inherent in its current market capitalization, and, accordingly, recorded a goodwill impairment charge of $26,261 for the year ended December 31, 2016. The goodwill impairment charge represents a full impairment and differs from the amount recognized as of the acquisition date due to changes in foreign currency exchange rates used to translate goodwill from the entities’ local currency to the U.S. dollar.

Acquisition of ASW

On November 1, 2016, the Corporation acquired 100% of the voting equity interest of ASW, a specialty steel producer, from CK Pearl Fund, Ltd., CK Pearl Fund L.P. and White Oak Strategic Master Fund, L.P. to support its diversification efforts in the open-die forging market. The purchase price of $13,116 consisted of $3,500 in cash and $9,616 in the assumption of outstanding indebtedness. The fair value of assets acquired and liabilities assumed as of the date of the acquisition is summarized below.

Current assets (excluding inventories)	$	6,525
Inventories		6,956
Property, plant and equipment		10,310
Current liabilities		(10,675	)
Outstanding indebtedness		(9,616	)
Base purchase price	$	3,500

Operating results of ASW are included in the Forged and Cast Engineered Products segment from the date of acquisition. For the two months ended December 31, 2016, net sales for ASW approximated $7,523 and loss before income taxes approximated $1,781.

Acquisition-Related Transaction Costs

Acquisition-related transaction costs of $3,056 and $3,383 for the year ended December 31, 2016, and 2015, respectively, were incurred relating principally to the purchase of Åkers and ASW and are included in selling and administrative costs.

Pro Forma Financial Information for the Åkers and ASW Acquisitions (unaudited)

The following financial information presents the combination of the results of operations of Ampco, Åkers and ASW as though the acquisition date for both of the business combinations had occurred as of January 1, 2015. Pro forma adjustments have been made to (i) include the net incremental depreciation and amortization expense associated with recording property, plant and equipment and definite-lived intangible assets at fair value and (ii) remove debt-related expenses associated with previous debt facilities not assumed by the Corporation. The following pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the acquisition occurred at the beginning of 2015:

	Year Ended December 31,
	2016			2015
Net sales	$	393,243		$	440,265
Loss before income taxes (includes noncontrolling interest)	$	(63,498	)	$	(11,945	)
Net loss attributable to Ampco-Pittsburgh	$	(85,778	)	$	(24,740	)
Net loss per common share (basic) attributable to Ampco-Pittsburgh	$	(6.94	)	$	(2.03	)

Other Acquisition

On July 29, 2015, the Corporation acquired the assets of AUP. The purchase price of $5,000 was funded by available cash. The pro forma impact on Corporation’s net sales and loss before income taxes was not significant to its consolidated results for 2015.