3. ACQUISITIONS

The Company has made the following acquisitions within the Transit Segment:

• On January 31, 2013, the Company acquired Napier Turbochargers Ltd. (“Napier”), a UK-based provider of turbochargers and related parts for the worldwide power generation and marine markets, for a net purchase price of approximately $112.3 million, net of cash, resulting in preliminary goodwill of $70.8 million, none of which will be deductible for tax purposes.

• On October 1, 2012, the Company acquired LH Group (“LH”), a UK-based provider of maintenance and overhaul services for the passenger transit market, for a net purchase price of approximately $48.1 million, net of cash, resulting in preliminary goodwill of $20.4 million, none of which will be deductible for tax purposes.

• On July 13, 2012, the Company acquired Tec Tran Corp. and its affiliates (“Tec Tran”), the only U.S.-owned manufacturer of hydraulic braking systems for transit cars, based in North Carolina, for a net purchase price of approximately $8.3 million, net of cash, resulting in preliminary additional goodwill of $1.7 million, which will be deductible for tax purposes.

• On June 14, 2012, the Company acquired Mors Smitt Holding (“Mors Smitt”), a leading manufacturer of electronic components for rail and industrial markets with operations in the Netherlands, the United Kingdom, the U.S., France, China and Hong-Kong, for a net purchase price of approximately $90.0 million, net of cash, resulting in preliminary additional goodwill of $42.5 million, none of which will be deductible for tax purposes.

The Company has made the following acquisitions within the Freight Segment:

• On February 26, 2013, the Company acquired Transdyne (“Transdyne”), a distributor of wear-protection components and other hardware used primarily on railroad freight cars, for a net purchase price of approximately $2.4 million, net of cash, resulting in preliminary goodwill of $1.5 million, which will be deductible for tax purposes

• On July 31, 2012, the Company acquired Winco Equipamentos Ferroviarios Ltda. (“Winco”), an established marketing and sales company and provider of freight car components with capabilities including value-added engineering and assembly, service, technical support and logistics, based in Brazil, for an initial net payment of approximately $3.7 million, net of cash, resulting in preliminary additional goodwill of $4.8 million, none of which will be deductible for tax purposes. In addition to the $3.7 million, the purchase agreement includes contingent consideration to be paid in future periods based on the achievement of certain financial results.

The acquisitions listed above include escrow deposits of $12.2 million, which act as security for indemnity and other claims in accordance with the purchase and related escrow agreements.

For the Mors Smitt, Tec Tran, Winco, LH and Napier acquisitions, the following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition.


	Transdyne	Napier	LH	Winco	Tec Tran	Mors Smitt

In thousands	February 26, 2013	January 31, 2013	October 1, 2012	July 31, 2012	July 13, 2012	June 14, 2012

Current assets	$ 1,062	$ 17,362	$ 19,126	$ 1,584	$ 1,955	$ 23,787
Property, plant & equipment	83	5,527	5,553	47	116	10,530
Goodwill and other intangible assets	1,483	99,883	39,033	7,401	6,717	79,298
Other assets	—	—	—	—	—	944

Total assets acquired	2,628	122,772	63,712	9,032	8,788	114,559
Total liabilities assumed	(226)	(10,431)	(15,592 )	(5,376 )	(470 )	(24,571 )

Net assets acquired	$ 2,402	$112,341	$ 48,120	$ 3,656	$ 8,318	$ 89,988

Of the allocation of $92.1 million of acquired intangible assets for the companies listed in the above table exclusive of goodwill, $61.0 million was assigned to customer relationships, $25.0 million was assigned to trade names, $2.5 million was assigned to patents, $0.6 million was assigned to non-compete agreements and $3.0 million was assigned to customer backlog. The trade names are considered to have an indefinite useful life, while the customer relationships’ average useful life is 20 years, the patents’ useful life is eight years, and the non-compete agreements average useful life is two years.

The following unaudited pro forma financial information presents income statement results as if the acquisitions listed above had occurred on January 1, 2012:


In thousands	Three Months Ended March 31, 2013	Three Months Ended March 31, 2012

Net sales	$ 620,325	$ 632,366
Gross profit	184,523	185,855
Net income attributable to Wabtec shareholders	70,513	64,779
Diluted earnings per share
As Reported	$ 1.44	$ 1.22
Pro forma	$ 1.46	$ 1.34