Acquisition (Notes)

9 Months Ended

Oct. 31, 2017

Business Combination Disclosure [Text Block]

Acquisition. On February 4, 2016, PPIH acquired the remaining 51% ownership of PPC, a coating and insulation company in Camrose, Alberta that serves the oil and gas industry in Western Canada. The purchase price was $13.1 million CAD ($9.6 million USD) in cash and debt at closing. This transaction was accounted for under the acquisition method of accounting. The following table represents the allocation of the total consideration in the acquisition of PPC:



Total purchase consideration:
Cash		$7,587
Loan payable	2,000
Purchase consideration to third party	9,587

Fair value of 49% previously held equity interest	7,492
Total purchase consideration		$17,079

Fair value of net assets acquired:
Cash and cash equivalents		$2,915
Property and equipment	13,124
Goodwill	2,279
Net working capital	406
Other assets (liabilities) net	(1,645		)
Net assets acquired		$17,079

The acquisition resulted in $2.3 million of goodwill. Goodwill is not deductible for income tax purposes. The Company incurred legal, professional and other costs related to this acquisition. These one-time costs of $0.2 million were recognized as general and administrative expenses.

In the first quarter of 2016, the Company recognized a non-cash loss of $1.6 million, which represents the difference between the pre-existing book value interest in PPC immediately prior to the acquisition remeasured to its fair value upon the acquisition date.