Quarterly report [Sections 13 or 15(d)]

Acquisitions

v3.26.1
Acquisitions
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Acquisitions
8. Acquisitions:
Calabrian
On June 30, 2026 (the “Closing Date”), the Company completed its acquisition of the Calabrian sulfur dioxide and sulfur derivatives business ("Calabrian") from INEOS Calabrian Holdings Limited and INEOS Calabrian Canada Holdings Limited (the “Sellers”) for a purchase price of $190,000 subject to certain adjustments including indebtedness, cash, and working capital, pursuant to the share purchase agreement (the “Calabrian Acquisition”). The Company paid $183,286 in cash after certain customary adjustments for indebtedness, working capital and $4,753 of cash acquired at the closing of the transaction. The Calabrian Acquisition will broaden the Company's existing product offering through further expansion into the sulfur dioxide, sodium bisulfite, sodium thiosulfate and sodium metabisulfite product groups for mining, water treatment, energy and other specialty applications, including food and pharmaceuticals.
The Calabrian Acquisition is a business combination, therefore the acquisition method was applied. Under the acquisition method, the purchase price was allocated to the identifiable net assets acquired based on the fair values of the identifiable net assets acquired as of the Closing Date. The excess of the purchase price over fair values of the identifiable net assets acquired was recorded to goodwill.
The table below presents the provisional fair values allocated to the net assets acquired. The purchase accounting and purchase price allocation for Calabrian are preliminary and the Company continues to refine the preliminary valuation of certain acquired net 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, net of cash acquired $ 178,533 
Recognized amounts of identifiable net assets acquired:
Accounts receivable $ 13,997 
Inventories 2,525 
Property, plant and equipment 44,955 
Right-of-use lease assets 8,287 
Other intangible assets 81,600 
Other long-term assets 107 
Fair value of assets acquired 151,471 
Accounts payable 5,516 
Accrued liabilities 1,658 
Operating lease liabilities—current 2,000 
Deferred income taxes 28,911 
Operating lease liabilities—noncurrent 6,377 
Fair value of identifiable net assets acquired 107,009 
Goodwill 71,524 
Total purchase price allocated $ 178,533 
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, inventories and other working capital balances were recorded at fair market value. As of the Closing Date, the fair value of accounts receivable, inventories, and other working capital balances approximated historical cost. The gross contractual amount of accounts receivable at the Closing Date was $13,997, of which there was no amount deemed uncollectible.
Property, plant and equipment is mostly comprised of land, buildings, machinery and equipment (including furniture and fixtures) and construction in process. The preliminary estimated fair value of property, plant and equipment was primarily determined using a cost approach.
The fair value measurements of the identified intangible assets were based primarily on significant unobservable inputs and thus represent a Level 3 measurement as defined in ASC 820 - Fair Value Measurement. Definite-lived intangible assets consist primarily of developed technology and customer relationships. The acquired trade names are expected to have an indefinite useful life. The preliminary developed technology and trade names intangible assets’ fair values were determined utilizing the relief-from-royalty method. The preliminary customer relationships intangible assets' fair value was determined using the excess earnings method.
The goodwill recognized in the Calabrian Acquisition is primarily attributable to the acquisition of an assembled workforce and the significant synergies expected to arise from the integration of the operations of Calabrian into the Company’s operations. The goodwill was assigned to the Company’s single operating segment and is not deductible for tax purposes.
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:
Developed technology $ 20,900  15
Customer relationships 53,600  12.5
Total intangible assets subject to amortization $ 74,500 
Indefinite-lived intangible assets:
Trade names $ 7,100 
The unaudited pro forma financial information is presented in the table below for the three and six months ended June 30, 2026 and 2025, respectively, as if the Calabrian Acquisition had occurred on January 1, 2025:
Three months ended
June 30,		 Six months ended
June 30,
2026 2025 2026 2025
Sales $ 278,762  $ 201,325  $ 519,317  $ 367,369 
Net income (loss) $ 15,365  $ 5,644  $ 23,144  $ (5,853)
The unaudited pro forma combined financial information presented above includes the accounting effects of the acquisition of Calabrian, including, to the extent applicable, the following items: amortization charges from acquired intangible assets; depreciation associated with the step-up in fair value of fixed assets; interest expense associated with incremental borrowings under the Company’s Term Loan Credit Agreement to partially finance the acquisition (see Note 11); adjustments to align Calabrian accounting policies to the Company’s; and the related tax effects. The unaudited pro forma financial information also includes acquisition costs specifically related to the Calabrian Acquisition. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have occurred under the Company’s ownership and management.
There were no net sales and net income attributable to Calabrian for the six months ended June 30, 2026, as the Calabrian Acquisition closed on June 30, 2026. Acquisition and integration costs were $8,044 and $9,271 for the three and six months ended June 30, 2026, respectively, and are included in other operating expense, net in the Company’s condensed consolidated statements of income.
Upon the close of the transaction, the Company entered into a transition services agreement with affiliates of the Sellers pursuant to which the Company is receiving certain services to provide for the orderly transition of various functions and processes after the closing of the transaction. The services under the transition services agreement include information technology, tax and other administrative support services. These services are being provided at cost for a period up to 9 months, with the ability to extend the initial term. The Company did not incur charges pursuant to the transition services agreement during the six months ended June 30, 2026.
Cornerstone
On May 6, 2025 (the “Cornerstone Acquisition 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 “Cornerstone Acquisition”), the Company paid $41,480 in cash, consisting of the $35,000 purchase price plus $6,480 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 regenerated sulfuric acid to current and future customers.
The following table sets forth the calculation and final allocation of the purchase price to the identifiable assets acquired with respect to the Cornerstone Acquisition:
Purchase
Price Allocation
Cash paid $ 41,480 
Recognized amounts of identifiable assets acquired:
Accounts receivable $ 9,991 
Inventories 3,259 
Property, plant and equipment 25,000 
Other intangible assets 2,380 
Other long-term assets 695 
Fair value of identifiable assets acquired 41,325 
Goodwill 155 
Total purchase price allocated $ 41,480 
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 Cornerstone Acquisition Closing Date, the fair value of accounts receivable approximated historical cost. The gross contractual amount of accounts receivable at the Closing Date was $9,991, 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 for a sulfuric acid exchange balance that was settled in the amount of $450. 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 $ 2,380  15
Acquisition and integration costs were $312 and $576 for the three and six months ended June 30, 2026 and $1,949 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.