On August 30,2019, we completed our acquisition of PCM, acquiring 100 percent of the issued and outstanding shares of PCM for a cash purchase price of $745,562,000, which included cash and cash equivalents acquired of $84,637,000 and the payment of PCM’s outstanding debt. PCM is a provider of multi-vendor technology offerings, including hardware, software and services to small, mid-sized and corporate/enterprise commercial clients, state, local and federal governments and educational institutions across the United States, Canada and the United Kingdom. Based in El Segundo, California, PCM has 40 office locations globally and more than 4,000 teammates. We believe that this acquisition allows us to help existing PCM clients in positioning their businesses for future growth, transforming and securing their data platforms, creating modern and mobile experiences for their workforce and optimizing the procurement of technology. The addition of PCM complements our supply chain optimization solution offering, adding scale and clients in the mid-market and corporate space in North America.

The following table summarizes the purchase price and the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):

Purchase price net of cash and cash equivalents acquired				$	660,925
Fair value of net assets acquired:
Current assets	$	542,642
Identifiable intangible assets - see description below		251,400
Property and equipment		96,959
Other assets		32,373
Current liabilities		(367,613	)
Long-term liabilities, including deferred taxes		(86,996	)
Total fair value of net assets acquired					468,765
Excess purchase price over fair value of net assets acquired ("goodwill")				$	192,160

Under the acquisition method of accounting, the total purchase price as shown in the table above was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over fair value of net assets acquired was recorded as goodwill.

The estimated fair values of current assets and liabilities (other than deferred revenue and related deferred costs) are based upon their historical costs on the date of acquisition due to their short-term nature. The estimated fair values of the majority of property and equipment are also based upon historical costs as they approximate fair value. Certain long-term assets, including PCM’s IT systems, will be written down to the estimated fair value based on the economic benefit expected to be realized from the assets following the acquisition.

The preliminary estimated fair value of identified intangible assets of $251,400,000 consists primarily of customer relationships, trade names and non-compete agreements, which are valued at $238,900,000, $8,400,000 and $4,100,000, respectively. These estimated values will be determined using the multiple-period excess earnings method, the relief from royalty method and the lost income method, respectively. The identifiable intangible assets resulting from the acquisition has been amortized using the straight-line method over the following estimated useful lives: customer relationships – 12-15 years; trade names – 1 year; non-compete agreements – 2-3 years.

Amortization expense recognized relating to the acquired identifiable intangible assets for the period from the acquisition date through September 30, 2019 was $2,130,000.

Goodwill of $192,160,000, which was recorded in our North America and EMEA operating segments, represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed from PCM. The goodwill is not amortized and will be tested for impairment annually in the fourth quarter of our fiscal year. The addition of the PCM technical employees to our team and the opportunity to grow our business are the primary factors making up the goodwill recognized as part of the transaction. None of the goodwill is tax deductible.

The purchase price allocation is preliminary and was allocated using information currently available. Further information may lead to an adjustment of the purchase price allocation.

We have consolidated the results of operations for PCM since its acquisition on August 30, 2019. Consolidated net sales and gross profit for the three and nine months ended September 30, 2019 each include $172,468,000 and $27,753,000, respectively, from PCM.

The following table reports pro forma information as if the acquisition of PCM had been completed at the beginning of the earliest period presented (in thousands, except per share amounts):

		Three Months Ended September 30,				Nine Months Ended September 30,
		2019		2018		2019		2018
Net sales	As reported	$	1,912,547	$	1,747,726	$	5,434,034	$	5,331,090
	Pro forma	$	2,322,828	$	2,257,769	$	6,910,356	$	6,928,539
Net earnings	As reported	$	27,132	$	32,154	$	116,457	$	116,636
	Pro forma	$	24,678	$	31,876	$	115,321	$	114,250
Diluted earnings per share	As reported	$	0.76	$	0.89	$	3.23	$	3.24
	Pro forma	$	0.69	$	0.89	$	3.20	$	3.17

Effective August 1, 2018, we acquired 100 percent of the issued and outstanding shares of Cardinal, a digital solutions provider based in Cincinnati, Ohio, with offices across the Midwest and Southeast United States, for a cash purchase price, net of cash acquired, of approximately $78,400,000, including final working capital and tax gross up adjustments. Cardinal provides technology solutions to digitally transform organizations through their expertise in mobile applications development, Internet of Things and cloud enabled business intelligence. We believe that this acquisition strengthens our services capabilities and will bring value to our clients within our digital innovation services solution offering.

The fair value of net assets acquired was approximately $42,360,000, including $27,540,000 of identifiable intangible assets, consisting primarily of customer relationships that will be amortized using the straight line method over the estimated economic life of ten years. We finalized the fair value assumptions for identifiable intangible assets acquired in the fourth quarter of 2018. Goodwill acquired approximated $36,040,000 which was recorded in our North America operating segment. The goodwill is tax deductible. The working capital adjustment in the amount of $762,000 was finalized in the fourth quarter of 2018 and paid in January 2019. Additionally, we finalized the purchase price allocation when the tax gross up adjustment of $2,600,000 was agreed upon in April 2019. This resulted in a reduction of the previously recorded purchase price of $400,000 in the second quarter of 2019.

Other than the goodwill and intangible assets recorded in conjunction with the acquisitions of Cardinal and PCM, the only other change in consolidated goodwill and intangible assets as of September 30, 2019 compared to the balance as of December 31, 2018 resulted from foreign currency translation adjustments associated with the balances in our EMEA and APAC operating segments.