Quarterly report pursuant to Section 13 or 15(d)

BUSINESS COMBINATION

v3.21.2
BUSINESS COMBINATION
6 Months Ended
Jun. 30, 2021
BUSINESS COMBINATION  
BUSINESS COMBINATION

NOTE N — BUSINESS COMBINATION

On January 7, 2020 the Company acquired all of the outstanding shares of Aircraft Component Technologies, Inc. (ACT), a Florida corporation located in Miami, Florida, for $17.0 million in cash. The results of ACT operations have been included in the condensed consolidated financial statements since the acquisition date. All assets and liabilities of ACT were recorded at their fair market value, and to the extent that the purchase cost exceeded the fair market value of the net assets, that excess was recorded as goodwill, all of which is deductible for federal income tax purposes. The goodwill is attributable to the general reputation of the business and the collective experience of ACT’s management and employees. This business operates as part of our Tech Ops segment. ACT’s revenues and income from operations for the three months ended June 30, 2020 were $1.8 million and $0.4 million, respectively, and from January 7, 2020 through June 30, 2020 were $4.0 million and $1.1 million, respectively. The purchase price for ACT was allocated as follows (in thousands):

    

Acquisition 

Date 

Fair Values

Accounts receivable

$

1,442

Deposits, prepaid expenses, and other current assets

 

22

Property and equipment

 

381

Other intangible assets

 

10,096

Goodwill

 

6,002

Accounts payable

 

(134)

Accrued expenses

 

(833)

Total purchase price

$

16,976

The intangible assets included above consist of the following (in thousands):

    

Fair Value

Trademark and trade name (indefinite lived)

$

200

    

Fair Value

FAA part 145 certificate (indefinite lived)

$

796

    

Useful Life In 

    

Years

Fair Value

Customer relationships

 

10

$

9,100

The acquisition of ACT did not have a material impact on the consolidated results of operations for the three- and six-month period ended June 30, 2020.