Note 2 - Acquisitions

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Business Combination Disclosure [Text Block]

2. Acquisitions

On October 1, 2021, the Company acquired substantially all of the net assets of Shaw, based in Powder Springs, Georgia, for $12.1 million. Shaw is a full-line distributor of stainless steel sheet, pipe, tube, bar and angles. Shaw also manufactures and distributes stainless steel bollards and water treatment systems. The acquisition includes Shaw's stainless-steel distribution and fabrication businesses as well as its architectural and barrier defense businesses. As of the effective date of the acquisition, Shaw’s results are included in the Company’s specialty metals flat products segment. Upon the acquisition, the Company entered into an amendment to its credit facility to include the eligible assets of Shaw as collateral.

On December 14, 2020, the Company acquired substantially all of the net assets of Action Stainless, based outside of Dallas, Texas, for $19.5 million. Action Stainless is a full line distributor of stainless steel and aluminum plate, sheet, angles, rounds, flat bar, tubing and pipe and offers a wide range of processing capabilities including plasma, laser and waterjet cutting and CNC machining. As of the effective date of the acquisition, Action Stainless results are included in the Company’s specialty metals flat products segment. Upon the acquisition, the Company entered into an amendment to its credit facility to include the eligible assets of Action Stainless as collateral.

The acquisitions are not considered significant and thus pro forma information has not been provided. The acquisitions were accounted for as business combinations and the assets and liabilities were valued at fair market value. The table below summarizes the final purchase price allocation of the fair market values of the assets acquired and liabilities assumed.

	Shaw			Action Stainless
	As of			As of
Details of Acquisition (in thousands)	October 1, 2021			December 14, 2020
Assets acquired
Accounts receivable, net	$	1,510		$	3,239
Inventories		3,129			3,656
Property and equipment		1,886			10,610
Prepaid expenses and other		5,986			204
Goodwill		5,262			1,894
Intangible assets		2,750			4,410
Total assets acquired		20,523			24,013
Total liabilities assumed		(8,418	)		(4,513	)
Cash paid	$	12,105		$	19,500

The purchase price allocations presented above are based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using Level 3 valuation techniques including income, cost and market approaches. The fair value estimates involve the use of estimates and assumptions, including, but not limited to, the timing and amounts of future cash flows, revenue growth rates, discount rates, and royalty rates. The total liabilities assumed for Action Stainless include an immaterial earn-out amount.