Business Combinations

9 Months Ended

Sep. 30, 2019

Business combinations

During 2019, the Company completed two acquisitions which were accounted for as business combinations. The following is a listing of the acquisitions made during 2019:


•	In March 2019, the Company acquired Viesko Redi-Mix, Inc., a provider of ready-mixed concrete in Oregon. The results of Viesko Redi-Mix, Inc. are included in the construction materials and contracting segment.


•	In September 2019, the Company purchased the assets of Pride Electric, Inc., an electrical construction company in Washington. The results of Pride Electric, Inc. are included in the construction services segment.

All business combinations were accounted for in accordance with ASC 805 - Business Combinations. The results of the acquired businesses have been included in the Company's Consolidated Financial Statements beginning on the acquisition date. Pro forma financial amounts reflecting the effects of the business combinations are not presented, as these business combinations were not material to the Company's financial position or results of operations.

For all business combinations, the Company preliminarily allocates the purchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition dates and are considered provisional until final fair values are determined, or the measurement period has passed. The Company expects to record adjustments as it accumulates the information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant and equipment, total consideration and goodwill. The excess of the purchase price over the aggregate fair values is recorded as goodwill. The Company calculated the fair value of the assets acquired in 2019 and 2018 using a market or cost approach (or a combination of both). Fair values for some of the assets were determined based on Level 3 inputs including estimated future cash flows, discount rates, growth rates, sales projections, retention rates and terminal values, all of which require significant management judgment and are susceptible to change. The final fair value of the net assets acquired may result in adjustments to the assets and liabilities, including goodwill, and will be made as soon as practical, but no later than one year from the respective acquisition dates. Any subsequent measurement period adjustments are not expected to have a material impact on the Company's results of operations.

As of September 30, 2019, the gross aggregate consideration for acquisitions that occurred in 2019 was $54.5 million, subject to certain adjustments, and includes $1.2 million of debt assumed. The acquisitions are subject to customary adjustments based on, among other things, the amount of cash, debt and working capital in the business as of the closing date. The amounts included in the Consolidated Balance Sheet for these adjustments are considered provisional until final settlement has occurred. The purchase price adjustments for Viesko Redi-Mix, Inc., have been settled and the purchase price allocation is considered final.

During the third quarter of 2019, the Company finalized its valuation of the assets acquired and liabilities assumed in conjunction with the acquisition in 2018 of Sweetman Construction Company. As a result, measurement period adjustments were made to the previously disclosed provisional fair values. These adjustments did not have a material impact on the Company's consolidated results of operations. The purchase price adjustments for the three additional acquisitions in 2018 have been settled with no material adjustments made to the provisional accounting. The aggregate total consideration for the 2018 acquisitions and the final amounts allocated to the assets acquired and liabilities assumed were as follows:



	December 31, 2018		Measurement Period Adjustments			September 30, 2019
	(In thousands)
Assets
Current assets:
Receivables, net	$	18,984	$	—		$	18,984
Inventories	10,329		(228		)	10,101
Prepayments and other current assets	515		(14		)	501
Total current assets	29,828		(242		)	29,586
Property, plant and equipment	131,766		6,669			138,435
Deferred charges and other assets:
Goodwill	33,131		(6,669		)	26,462
Other Intangible assets, net	8,227		—			8,227
Other	927		—			927
Total deferred charges and other assets	42,285		(6,669		)	35,616
Total assets acquired	$	203,879	$	(242	)	$	203,637
Liabilities
Current liabilities	$	11,122	$	(242	)	$	10,880
Deferred credits and other liabilities:
Asset retirement obligation	914		—			914
Deferred income taxes	5,565		—			5,565
Total deferred credits and other liabilities	6,479		—			6,479
Total liabilities assumed	$	17,601	$	(242	)	$	17,359
Total consideration (fair value)	$	186,278	$	—		$	186,278