Acquisitions and Investments

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Acquisitions and Investments

Acquisitions and Investments

Specialized

On May 13, 2014, the Company acquired all of the operating units of Specialized Industries LP, a portfolio company of ELB Capital Management, LLC.  The purchase included the businesses of Super Products LLC, Wausau-Everest LP and Howard P. Fairfield LLC as well as several related entities ("Specialized"), including all brand names and related product names and trademarks (the "Acquisition") pursuant to the terms of the Membership Interests and Partnership Interests Purchase Agreement dated February 24, 2014 (the “Agreement”). The purchase price consideration was approximately $193 million, on a debt-free basis which included certain post-closing adjustments that were made within 90 days from the Acquisition date per the agreement.

In connection with the Acquisition on May 13, 2014, Alamo Group amended its revolving credit facility as disclosed in note 10.

Additional details of the acquisition, including allocation the purchase price to the net assets acquired, are included in note 2 to the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2014. During the first quarter of 2015, no adjustments were made to the allocation of the purchase price.  The Company continues to review its deferred tax attributes acquired in connection with the filing of the associated tax returns.

During the first quarter of 2015, the Specialized business units generated approximately $44.3 million of net sales and $2.3 million of net income which are included in the Company's consolidated financial statements.

Other Acquisitions

The Company also completed two smaller acquisitions during the second quarter of 2014. Kellands Agricultural Ltd. was acquired on April 2, 2014 and Fieldquip Australia PTY LTD was acquired on April 7, 2014. Both acquisitions were on a debt free basis and subject to certain post-closing adjustments with total consideration of $5,594,000 . Additional details of these acquisitions are included in note 2 to the consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2014.

Herder Implementos e Maquinas Agricolas Ltda. ("Herder") was acquired on March 9, 2015 on a debt free basis and subject to certain post-closing adjustments with total consideration of approximately $4.0 million subject to adjustments. This acquisition is being accounted for in accordance with ASC Topic 805. Accordingly, the total purchase price has been allocated on a preliminary basis to assets acquired and liabilities assumed based on their estimated fair values as of the completion of the acquisition. These allocations reflect various provisional estimates that were available at the time and are subject to change during the purchase price allocation period as valuations are finalized. The primary reason for the Herder acquisition was to establish a presence in South America which is a major global agricultural market. The revenue and earnings of Herder from the date of acquisition to March 31, 2015 were not material to the Company’s consolidated results of operations. In addition, assuming the acquisition had occurred as of January 1, 2014, the results of operations of Herder would not have had a material pro forma effect on the Company’s revenues, earnings and earnings per share for the years ended December 31, 2014 and 2015.