Acquisition (Notes)

12 Months Ended

Jan. 31, 2018

Note 4 - Acquisition

PPIH entered into a purchase agreement with its joint venture partner Aegion Corporation to acquire the remaining 51% ownership of PPC, a pipe coating company in Camrose, Alberta, which acquisition closed on February 4, 2016. PPIH had owned a 49% interest in PPC since 2009, when the joint venture was formed with Aegion to serve the oil and gas industry in Western Canada.

The purchase price was $13.1 million CAD ($9.6 million) in cash and debt at closing and is subject to certain post-closing adjustments. The accounting for this acquisition has been completed. The following table represents the allocation of the total consideration in the acquisition of PPC:



Total purchase consideration (in thousands):
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.