CLB 2018 Annual Report

F-15 4. ACQUISITIONS In September 2018, we acquired Guardian Global Technologies Ltd., a business providing downhole technologies associated with perforating systems for $49.1 million in cash. These downhole technologies will significantly enhance Core Lab's Production Enhancement operations and its ability to bring new and innovative product offerings to our clients. We have estimated the fair values of tangible assets acquired to be $4.2 million, and intangible assets, including patents, customer-relationship benefits, non- compete agreements and trade secrets to be $3.6 million. We have accounted for this acquisition by allocating the purchase price to the net assets acquired based on their estimated fair values at the date of acquisition which resulted in an increase to goodwill of $41.3 million. We have not finalized the assessment of the fair values of assets acquired and liabilities assumed; estimates of certain assets and liabilities require significant judgments and assumptions, and our estimates of acquisition date fair value will be determined upon finalization of our analysis. The fair value estimates are subject to adjustment during the measurement period subsequent to the acquisition date, not to exceed one year. The acquisition is included in the Production Enhancement business segment. Acquisition-related costs totaling $0.7 million that were incurred and expensed in the third quarter of 2018 are included in Other (income) expense, net in the accompanying Consolidated Statements of Operations. These costs consisted of various advisory fees, and other direct incremental costs. The acquisition of this business did not have a material impact on our Consolidated Balance Sheets or Consolidated Statements of Operations. We had no significant acquisitions during the years ended December 31, 2017 and 2016. 5. INVENTORIES Inventories consisted of the following at December 31, 2018 and 2017 (in thousands): 2018 2017 Finished goods $ 26,636 $ 21,668 Parts and materials 13,704 10,613 Work in progress 5,324 1,036 Total inventories $ 45,664 $ 33,317 We include freight costs incurred for shipping inventory to our clients in the Cost of product sales caption in the accompanying Consolidated Statements of Operations. 6. PROPERTY, PLANT AND EQUIPMENT, NET The components of property, plant and equipment, net were as follows at December 31, 2018 and 2017 (in thousands): 2018 2017 Land $ 11,383 $ 11,520 Building and leasehold improvements 115,875 115,270 Machinery and equipment 272,916 261,723 Total property, plant and equipment 400,174 388,513 Less - accumulated depreciation (277,257) (265,415) Property, plant and equipment, net $ 122,917 $ 123,098 7. INTANGIBLES, NET The components of intangibles, net as of December 31, 2018 and 2017 are as follows (in thousands):