4. ACQUISITIONS

Air Serv Acquisition

On November 1, 2012, the Company acquired all of the outstanding stock of Air Serv, for an aggregate purchase price of $162.9 million in cash, including a $4.1 million working capital adjustment paid in the second quarter of 2013 (the “Air Serv Acquisition”). Approximately $11.9 million of the cash consideration was placed in an escrow account to satisfy any applicable indemnification claims, pursuant to the terms of the purchase agreement. The final purchase price allocation is subject to, among other items, further analysis of tax accounts, insurance balances, plant and equipment, and capital leases.

Air Serv provides integrated facility solutions services for airlines and freight companies at airports primarily in the United States. The operations of Air Serv are included in the Other segment as of November 1, 2012, the acquisition date. Included in the Company’s consolidated statements of income were revenues of $79.8 million and operating profit of $2.9 million for the three months ended April 30, 2013, and revenues of $163.7 million and operating profit of $4.9 million for the six months ended April 30, 2013.

HHA Acquisition

On November 1, 2012, the Company acquired all of the outstanding stock of HHA, for an aggregate purchase price of $33.7 million in cash, including a $0.6 million working capital adjustment received in the third quarter of 2013 (the “HHA Acquisition”). Approximately $2.0 million of the cash consideration was placed in an escrow account to satisfy any applicable indemnification claims and working capital shortfalls of which $0.6 million was released in the third quarter of 2013 in connection with the working capital adjustment.

HHA provides facility solutions, including housekeeping, laundry, patient assist, plant maintenance, and food services, to hospitals, healthcare systems, long-term care facilities, and retirement communities. The operations of HHA are included in the Building & Energy Solutions segment as of November 1, 2012, the acquisition date. Included in the Company’s consolidated statements of income were revenues of $13.1 million and operating profit of $0.4 million for the three months ended April 30, 2013, and revenues of $25.9 million and operating profit of $0.3 million for the six months ended April 30, 2013.

Calvert-Jones Acquisition

On November 1, 2012, the Company acquired substantially all of the assets and assumed certain liabilities of Calvert-Jones for a cash purchase price of $6.3 million, which is subject to an additional working capital adjustment (the “Calvert-Jones Acquisition”). Approximately $0.7 million of the cash consideration was placed in an escrow account to satisfy any applicable indemnification claims, pursuant to the terms of the purchase agreement.

Calvert-Jones provides mechanical and energy efficient products and solutions in the Washington, D.C. area. The operations of Calvert-Jones are included in the Building & Energy Solutions segment as of November 1, 2012, the acquisition date. Included in the Company’s consolidated statements of income were revenues of $4.8 million and operating loss of $0.2 million for the three months ended April 30, 2013, and revenues of $8.4 million and operating loss of $0.1 million for the six months ended April 30, 2013.

Preliminary Allocation of Consideration Transferred to Acquire Air Serv, HHA, and Calvert-Jones

The following table summarizes the preliminary allocation of consideration transferred to acquire Air Serv, HHA, and Calvert-Jones and the amounts of identified assets acquired and liabilities assumed at the acquisition date:


(in thousands)	Air Serv			HHA			Calvert-Jones
Purchase price:

Total cash consideration	$	162,881		$	33,680		$	6,250

Allocated to:
Cash and cash equivalents	$	10,686		$	832		$	—
Trade accounts receivable		52,552			3,161			1,241
Prepaid expenses and other		5,559			942			441
Property, plant and equipment		17,488			123			49
Other intangible assets		44,612			15,000			2,600
Goodwill		83,585			23,728			4,284
Other assets		27			468			—
Trade accounts payable		(4,609	)		(667	)		(1,200	)
Accrued liabilities		(26,019	)		(4,452	)		(861	)
Insurance claims		(9,151	)		—			—
Net deferred income tax liabilities		(5,563	)		(5,438	)		—
Other		(6,286	)		(17	)		(304	)

Net assets acquired	$	162,881		$	33,680		$	6,250

The amount allocated to goodwill for Air Serv and HHA is reflective of the Company’s identification of buyer-specific synergies that the Company anticipates will be realized by, among other things, reducing duplicative positions and back office functions and by reducing professional fees and other services. Goodwill is also attributable to the expected long-term business growth through the Company’s expansion of its vertical market expertise in servicing the end-to-end needs of airlines, airport authorities, and healthcare service markets. None of the goodwill associated with the acquisitions of Air Serv and HHA will be amortizable for income tax purposes as the Company acquired all of the outstanding stock of these companies.

Goodwill for the Calvert-Jones acquisition is attributable to the projected long-term business growth through the Company’s expansion of existing vertical and geographic market offerings in building and energy solutions. A significant portion of the goodwill associated with the Calvert-Jones acquisition is expected to be amortizable for income tax purposes.

Other intangible assets primarily consist of customer contracts and relationships with a weighted average life of 15 years for Air Serv, 13 years for HHA, and 12 years for Calvert-Jones.

The preliminary estimated fair value of trade accounts receivable acquired in the Air Serv acquisition reflects gross contractual amounts of $53.0 million, of which $0.4 million is expected to be uncollectable. The preliminary estimated fair value of trade accounts receivable acquired in the HHA and Calvert-Jones acquisitions approximates the contractual amounts.

We have incurred combined acquisition-related costs of $1.1 million, of which $0.3 million have been incurred in the six months ended April 30, 2013. These expenses are included in selling, general and administrative expenses in the unaudited consolidated statements of income.

Assuming these acquisitions were made at November 1, 2011, the consolidated pro forma results would not be materially different from reported results.

TEGG and CurrentSAFE Acquisition

On May 1, 2012, we acquired substantially all of the assets and assumed certain liabilities of TEGG Corporation (“TEGG”) and CurrentSAFE Corporation (“CurrentSAFE”) and also acquired certain software technology from TEGG’s shareholder, for an aggregate purchase price of $5.5 million in cash, net of cash acquired. The purchase price reflects a $0.1 million working capital adjustment received in the fourth quarter of 2012. Approximately $0.5 million of the cash consideration was placed in an escrow account to satisfy any applicable indemnification claims, pursuant to the terms of the purchase agreement. The assets acquired represent the franchise operations of TEGG and CurrentSAFE, and through this acquisition the Company expanded its electrical services to include electrical preventive and predictive maintenance solutions. The acquired net assets and results from operations have been included in the Company’s Building & Energy Solutions segment since May 1, 2012, the acquisition date. Assuming this acquisition was made at November 1, 2011, the consolidated pro forma results would not be materially different from reported results.