v3.26.1
Acquisitions
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Acquisitions

13. Acquisitions

2026 Acquisition

For the six months ended June 30, 2026, the Company completed an acquisition of Edge Controls (“Edge”) for a purchase price consideration of approximately $46 million, net of cash acquired. Edge is a leading provider of automation & controls, SCADA, pump, motor and drive products and services and expands the Company's product range and enhances the Company’s automation capabilities and ability to deliver higher-value, integrated solutions to the Company's customers. The Company has included the financial results of Edge in its consolidated financial statements from the date of the acquisition.

The Company completed its preliminary valuations as of the acquisition date of the acquired net assets and recognized goodwill of $27 million and intangible assets of $5 million in the U.S. segment, which are subject to change. The primary areas of the preliminary valuation that are not yet finalized relate to adjustments to working capital and intangible assets. If additional information is obtained about these assets and liabilities within the measurement period (not to exceed one year from the date of acquisition), the Company will refine its estimate of fair value to allocate the purchase price more accurately; any such revisions are not expected to be significant. The goodwill recognized is primarily attributable to expected synergies and is deductible for income tax purposes. The Company has not presented supplemental pro forma information because the acquired operations did not materially impact the Company’s consolidated operating results.

For the six months ended June 30, 2026, the Company recognized measurement period adjustments based on information that was received subsequent to the acquisition date that related to conditions that existed as of the acquisition date. These adjustments resulted in a decrease of $4 million to working capital and an increase of $4 million to goodwill.

2025 Acquisitions

MRC Global Acquisition. In 2025, the Company completed the acquisition of MRC Global in an all-stock transaction for a purchase price consideration of $1,763 million, net of cash acquired. MRC Global shareholders received 0.9489 shares of DNOW common stock for each share of MRC Global common stock. Existing indebtedness of MRC Global was repaid at acquisition.

The Company completed its preliminary valuations as of the acquisition date of the acquired net assets and recognized goodwill of $383 million, $289 million in the U.S. segment and $94 million in the International segment and intangible assets of $510 million in the U.S. segment, which are subject to change. The fair values of trade names in the acquisition were determined using a relief-from-royalty method, and customer relationships acquired were determined using a multi-period excess earnings method. These methods utilize unobservable inputs that are significant to these fair value measurements and thus classified as Level 3 inputs. The amounts recognized for assets acquired and liabilities assumed are provisional and subject to revision as more information becomes available. The primary areas of the preliminary valuation that are not yet finalized relate to the fair values of certain intangible assets pending the completion of a final third-party valuation report, the final determination of net working capital and the tax basis of acquired assets and assumed liabilities. The Company expects to finalize the valuation and the purchase price allocation as soon as practicable but no later than one year from the acquisition date. Any adjustments to these provisional amounts will be recorded as an adjustment to goodwill.

The following table summarizes the purchase price allocation detail as of the acquisition date and measurement period adjustments related to conditions that existed as of the acquisition date recognized during the six months ended June 30, 2026 (in millions):

 

 

As initially
reported

 

Measurement period
adjustments

 

June 30, 2026
(as adjusted)

 

Equity consideration for the conversion of MRC Global common stock outstanding

 

$

1,185

 

$

—

 

$

1,185

 

Fair value of replacement MRC Global RSUs and MRC Global PSUs attributable to the purchase price

 

 

12

 

 

—

 

 

12

 

Repayment of certain existing indebtedness of MRC Global

 

 

643

 

 

—

 

 

643

 

Purchase price consideration

 

$

1,840

 

$

—

 

$

1,840

 

 

 

 

 

 

 

 

 

Fair value of net assets acquired:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

77

 

$

—

 

$

77

 

Receivables, net

 

 

514

 

 

(19

)

 

495

 

Inventories, net

 

 

971

 

 

(53

)

 

918

 

Prepaid and other current assets

 

 

36

 

 

—

 

 

36

 

Property, plant and equipment, net

 

 

123

 

 

1

 

 

124

 

Operating right-of-use assets

 

 

126

 

 

2

 

 

128

 

Other assets

 

 

13

 

 

—

 

 

13

 

Trade names (1)

 

 

230

 

 

—

 

 

230

 

Customer relationships (2)

 

 

280

 

 

—

 

 

280

 

Accounts payable

 

 

(383

)

 

(1

)

 

(384

)

Accrued liabilities

 

 

(166

)

 

1

 

 

(165

)

Other current liabilities

 

 

(2

)

 

—

 

 

(2

)

Long-term operating lease liabilities

 

 

(108

)

 

8

 

 

(100

)

Deferred income tax liabilities

 

 

(193

)

 

8

 

 

(185

)

Other long-term liabilities

 

 

(59

)

 

—

 

 

(59

)

Noncontrolling interests

 

 

(2

)

 

—

 

 

(2

)

Accumulated other comprehensive loss

 

 

—

 

 

1

 

 

1

 

Total fair value of net assets acquired

 

 

1,457

 

 

(52

)

 

1,405

 

Goodwill (3)

 

$

383

 

$

52

 

$

435

 
(1)
Trade names acquired are indefinite-lived intangible assets.
(2)
Customer relationships acquired are amortized over a 15-year weighted average period.
(3)
The amount of goodwill represents the excess of its purchase price over the fair value of net assets acquired. Goodwill includes the expected benefit that the Company believes will result from combining its operations with those of the business acquired and is not deductible for income tax purposes.

Singapore Acquisition. The Company completed its valuations as of the acquisition date of the acquired net assets and recognized goodwill of $3 million and intangible assets of $2 million in the International segment. The goodwill recognized is primarily attributable to expected synergies and is not deductible for income tax purposes. For the six months ended June 30, 2026, the Company recognized measurement period adjustments based on information that was received subsequent to the acquisition date that related to conditions that existed as of the acquisition date. These adjustments resulted in a decrease of less than $1 million to working capital and to goodwill.