Quarterly report pursuant to Section 13 or 15(d)

Acquisitions

v3.8.0.1
Acquisitions
 9 Months Ended
Dec. 31, 2017
Business Combinations [Abstract]  
Acquisitions
Acquisitions
On October 30, 2017, 2071827 Alberta Ltd. ("MergerSub"), an indirect, wholly owned subsidiary of the Company, completed the acquisition of 100% of the equity interests of CCI and certain related real estate assets for $261,950 CAD (approximately $204,235 USD at the exchange rate as of October 30, 2017) in cash. MergerSub and CCI amalgamated immediately after the closing of the acquisition to form Thermon Heating Systems, Inc. ("THS"), an indirect, wholly-owned subsidiary of the Company. THS is engaged in industrial process heating, focused on the development and production of advanced heating and filtration solutions for industrial and hazardous area applications and is headquartered in Edmonton, Alberta, Canada. THS markets its products through several diverse brands known for high quality, safety and reliability, and serves clients in the energy, petrochemical, electrical distribution, power, transit and industrial end markets globally. We believe we will be able to leverage our existing global sales force to further expand the reach of THS's product offerings. We recognized $87,540 of goodwill in connection with the THS transaction. THS has contributed $16,057 and $2,851 of revenue and operating income, respectively, to our Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended December 31, 2017.
    Pro forma financial information- The following table presents selected unaudited pro forma information for the Company assuming the acquisition of CCI had occurred as of April 1, 2016. This pro forma financial information is presented for informational and illustrative purposes and does not purport to represent what the Company’s actual results would have been if the acquisition had occurred as of the date indicated or what such results would be for any future periods. In addition, the unaudited pro forma results do not include any anticipated synergies or other expected benefits of the acquisition or costs necessary to obtain the anticipated synergies and benefits. The pro forma financial information includes the amortization associated with the acquired intangible assets, interest expense associated with debt used to fund the acquisition, amortization of the inventory step-up, removal of aircraft and rent expense for assets not assumed in the transaction, acquisition related expenses, and the income tax affected for the pro forma results.

(Dollars in Thousands, except share and per share data)
 
 
Pro Forma Financial Information (Unaudited)
 
 
Three months ended December 31,
 
Nine months ended December 31,
 
 
2017
 
2016
 
2017
 
2016
Revenues
 
$
99,281

 
$
83,779

 
$
245,878

 
$
241,890

Net income available to Thermon Group Holdings, Inc. (loss)
 
362

 
4,550

 
(294
)
 
(1,716
)
Earnings per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.01

 
$
0.14

 
$
(0.01
)
 
$
(0.05
)
Diluted
 
$
0.01

 
$
0.14

 
$
(0.01
)
 
$
(0.05
)

    
The following table details the purchase price of the THS transaction:
Consideration to or on behalf of sellers at close
$
204,235

Fair value of total consideration transferred
204,235



    
The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed:
Assets acquired:
 
     Cash
$
1,534

     Accounts receivable
14,351

     Inventories
20,489

     Other current assets
731

     Property, plant and equipment
29,464

     Identifiable intangible assets
79,002

     Goodwill
87,540

Total assets
233,111

Liabilities assumed:
 
     Current liabilities
6,255

     Other non-current liabilities
500

     Non-current deferred tax liability
22,121

Total liabilities
28,876

Total consideration
$
204,235




In total, $3,839 of transaction costs were incurred related to the THS transaction, all of which were incurred during and prior to the three months ended December 31, 2017.

Our provisional estimate of identifiable intangible assets at December 31, 2017 that were related to the THS transaction, inclusive of currency translation adjustments for the period, consisted of the following:
 
Amortization period
 
Gross Carrying Amount at December 31, 2017
 
Accumulated Amortization
 
Net Carrying Amount at December 31, 2017
 
 
 
 
 
 
 
 
Products
10 Years
 
$
66,408

 
$
1,107

 
$
65,301

Customer relationships
17 Years
 
11,465

 
112

 
11,353

Backlog
1 Year
 
3,320

 
553

 
2,767

Total
 
 
$
81,193

 
$
1,772

 
$
79,421



The weighted average useful life of acquired finite lived intangible assets related to THS transaction is 10.6 years.