Quarterly report [Sections 13 or 15(d)]

Acquisition

v3.25.2
Acquisition
 6 Months Ended
Jun. 30, 2025
Business Combination [Abstract]  
Acquisition
7. Acquisition:
On May 6, 2025 (the “Closing Date”), the Company completed its acquisition of the sulfuric acid production assets of Cornerstone Chemical Company LLC (“Cornerstone”) located in Waggaman, Louisiana. As part of an asset purchase agreement (the “Acquisition”), the Company paid $41,315 in cash, consisting of the $35,000 purchase price plus $6,315 of adjustments for working capital, pursuant to the agreement. The sulfuric acid production assets will be used to increase capacity of virgin sulfuric acid and sulfuric acid regeneration services to current and future customers.
The Acquisition is a business combination, therefore the acquisition method was applied. Under the acquisition method, the purchase price was allocated to the identifiable assets acquired based on the fair values of the identifiable assets acquired as of the Closing Date. The excess of the purchase price over fair values of the identifiable assets acquired was recorded to goodwill.
The table below presents the provisional fair values allocated to the assets acquired. The purchase accounting and purchase price allocation for Cornerstone are preliminary and the Company continues to refine the preliminary valuation of certain acquired assets which could impact the amount of residual goodwill recorded. The Company intends to finalize the amounts recognized as it obtains the information necessary to complete the analysis, but no later than one year from the date of the acquisition. Final determination of the fair values may result in further adjustments to the values presented in the following table:
Preliminary Purchase
Price Allocation
Cash paid $ 41,315 
Recognized amounts of identifiable assets acquired:
Accounts receivable $ 9,812 
Inventories 3,055 
Property, plant and equipment 25,000 
Other intangible assets 2,390 
Other long-term assets 695 
Fair value of identifiable assets acquired 40,952 
Goodwill 363 
Total assets acquired $ 41,315 
 
Adjustments to the preliminary amounts during the measurement period that result in changes to depreciation, amortization or other income effects will be recognized in the reporting period(s) in which the adjustments are determined.
In accordance with the requirements of the purchase method of accounting for acquisitions, accounts receivable and inventories were recorded at fair market value. As of the Closing Date, the fair value of accounts receivable approximated historical cost. The gross contractual amount of accounts receivable at the Closing Date was $9,812, of which there was no amount deemed uncollectible. Fair value of inventory is defined as estimated selling prices less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity.
Prior to the acquisition, the Company had a preexisting relationship with Cornerstone. The Company had a net payable of $619 for a sulfuric acid exchange balance. As part of the acquisition terms, the payable was settled at cost, which was recorded separate from the business combination.
The valuation of intangibles assets acquired and the related weighted-average amortization period are as follows:
Amount Weighted-Average
Expected Useful Life
(in years)
Intangible assets subject to amortization:
Customer relationships $ 2,390  15
Net sales and net income attributable to Cornerstone during the period from the Closing Date through June 30, 2025 were immaterial. Pro forma financial information has not been presented as it is immaterial for the three and six months ended June 30, 2025. Acquisition and integration costs were $806 and $2,755 for the three and six months ended June 30, 2025, respectively, and are included in other operating expense, net in the Company’s condensed consolidated statements of income.
The Company entered into an agreement with Cornerstone to lease the land where the acquired assets are located for a 7 year term plus renewal options. Additionally, Cornerstone will charge the Company for site services and utilities for the location.