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Business Combinations | 12 Months Ended
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Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
Business Combinations | Business Combinations Earthly Labs Inc. Acquisition As discussed in Note 6, “Investments”, we previously held a 15% equity investment in Earthly Labs. On December 14, 2021, we acquired the remaining 85% of Earthly Labs for approximately $63.1 (subject to certain customary adjustments) or $59.6 net of $3.5 cash acquired, of which approximately 63% was paid in cash ($39.7) and 37% was paid in shares of common stock of Chart, par value $0.01 to certain sellers of Earthly Labs who are accredited investors (0.14 shares or $23.4). Such shares of common stock of Chart were valued for this purpose by using a 5-day volume-weighted average price per share of $169.42. In connection with the Earthly Labs acquisition, Chart shall pay to the sellers a royalty on sales of a carbon capture unit for residential use launched for sale to the public by Chart, which has not yet been developed. Refer to the “Contingent Consideration” section below for further discussion. Earthly Labs is a leading provider of small-scale carbon capture systems offering an affordable, small footprint technology platform called “CiCi ®” to capture, recycle, reuse, track and sell CO2. Earthly Labs proprietary approach includes hardware, software and services to address half of all existing carbon dioxide emissions from industrial sources while converting molecules to value. The preliminary estimated fair value of the total net assets acquired include goodwill, identifiable intangible assets and other net liabilities at the date of acquisition in the amounts of $47.2, $27.0 and $11.1, respectively. Intangible assets consists of unpatented technology, trade names, customer relationships and backlog. AdEdge Holdings, LLC Acquisition On August 27, 2021, we acquired 100% of the equity interests of AdEdge Holdings, LLC (“AdEdge”) for approximately $37.5 in cash (subject to certain customary adjustments), net of $1.4 of cash acquired. AdEdge is a water treatment technology and solution provider specializing in the design, development, fabrication and supply of water treatment solutions, specialty medias, legacy and innovative technologies that remove a wide range of contaminants from water. The preliminary estimated fair value of the total net assets acquired include goodwill, identifiable intangible assets and other net assets at the date of acquisition in the amounts of $15.9, $18.2 and $4.8, respectively. L.A. Turbine Acquisition On July 1, 2021, we acquired 100% of the equity interests of L.A. Turbine (“LAT”) for approximately $76.6 in cash (subject to certain customary adjustments), net of $1.4 of cash acquired. LAT is a global leader in turboexpander design, engineering, manufacturing, assembly and testing process for new and aftermarket equipment, with significant in-house engineering expertise. The preliminary estimated useful lives of identifiable finite-lived intangible assets range from less than one year to 15 years. The excess of the purchase price over the estimated fair values is assigned to goodwill. LAT complements our Heat Transfer Systems and Specialty Products segments with the addition of its application-specific, highly engineered turboexpanders which further differentiates Chart’s end market diversity especially in hydrogen and helium liquefaction in addition to industrial gas, natural gas processing, power generation and petrochemical applications. Furthermore, LAT’s aftermarket business will further bolster our Repair, Service & Leasing segment. The addition of LAT’s turboexpanders new equipment and aftermarket businesses allows Chart to offer a broader technology solution for our customers. Management anticipates the combination of strong engineering cultures will continue to further develop full service solutions for our customers. The preliminary estimated goodwill was established due to the benefits outlined above, as well as the benefits derived from the anticipated synergies of LAT integrating with our Heat Transfer Systems, Specialty Products and Repair, Service & Leasing segments. Goodwill recorded for the LAT acquisition is not expected to be deductible for tax purposes. The following table summarizes the preliminary estimated fair value of the assets acquired in the L.A. Turbine acquisition at the acquisition date:
Net assets acquired: |
Identifiable intangible assets | $ | 43.7 |
Goodwill | 42.1
Other assets | 4.6
Property, plant and equipment | 2.6
Cash and cash equivalents | 1.4
Liabilities | (16.4) |
Net assets acquired | $ | 78.0 |
Information regarding preliminary estimated identifiable intangible assets acquired in the L.A. Turbine acquisition is presented below:
| Weighted-average Estimated Useful Life |  | Preliminary Estimated Asset Fair Value
Finite-lived intangible assets acquired: |  |  |
Unpatented technology | 14.5 years |  | $ | 33.4 |
Customer relationships | 14.5 years |  | 1.5
Backlog | 2.5 years |  | 0.7
Other identifiable intangible assets (1) | 3.4 years |  | 0.2
Total finite-lived intangible assets acquired | 14.2 years |  | 35.8
Indefinite-lived intangible assets acquired: |  |  |
Trademarks and trade names |  |  | 7.9
Total intangible assets acquired |  |  | $ | 43.7 |
_______________ (1)Other identifiable intangible assets is included in “Patents and other” in Note 9, “Goodwill and Intangible Assets.” Cryogenic Gas Technologies, Inc. Acquisition On February 16, 2021, we acquired 100% of the equity interests of Cryogenic Gas Technologies, Inc. (“Cryo Technologies”) for approximately $55.0 in cash (subject to certain customary adjustments), net of $0.6 cash acquired. Cryo Technologies is a global leader in custom engineered process systems to separate, purify, refrigerate, liquefy and distribute high value industrial gases such as hydrogen, helium, argon and hydrocarbons with design capabilities for cold boxes for hydrogen and helium use. The distribution systems Cryo Technologies supplies are located within the helium and hydrogen liquefaction facilities and are inclusive of trailer loading systems, which facilitates the first step in product distribution. The estimated fair value of the total net assets acquired include goodwill, identifiable intangible assets and other net assets at the date of acquisition in the amounts of $34.9, $19.5 and $1.2, respectively. The purchase price allocation reported at March 31, 2021 was preliminary and was based on provisional fair values. During the remainder of 2021 we received and analyzed new information about certain intangible assets and subsequently increased their fair value by $17.6. Intangible assets consists of customer relationships, unpatented technology, trademarks and trade names, backlog and non-competition agreements. Sustainable Energy Solutions, Inc. Acquisition On December 23, 2020, we completed the acquisition of Sustainable Energy Solutions, Inc. (“SES”). SES’s Cryogenic Carbon Capture™ (CCC) technology eliminates most emissions from fossil fuels while enabling better use of intermittent renewables through grid-scale energy storage. The stock purchase was completed for a closing purchase price of $20.0 in cash at closing, subject to a post-closing working capital adjustment, plus a potential earn-out not to exceed $25.0. The estimated fair value of the net assets acquired and goodwill at the date of acquisition was $13.4 and $24.0, respectively. Net assets includes $17.3 in intangible assets, which consists of unpatented technology, trade names and non-compete contracts. There were no changes to the fair value of intangible assets of SES during 2021. BlueInGreen, LLC Acquisition On November 3, 2020, we completed the acquisition of BlueInGreen, LLC (“BIG”), a leading dissolved-gas expert providing custom-engineered solutions for water treatment and industrial process applications that delivers tangible economic, social and environmental value. The stock purchase was completed for a purchase price of $20.3 in cash at closing (subject to customary adjustments), plus a potential earn-out not to exceed $6.0. The estimated fair value of the net assets acquired and goodwill at the date of acquisition was $7.7 and $16.0, respectively. The purchase price allocation reported at December 31, 2020 was preliminary and was based on provisional fair values. During 2021, we received and analyzed new information about certain intangible assets and subsequently decreased their estimated fair value by $1.4. Net assets includes $6.2 in intangible assets, which consists of non-compete contracts, unpatented technology, trademarks and trade names, certifications and licenses and customer relationships. Alabama Trailers Acquisition On October 13, 2020, we completed the acquisition of the Theodore, Alabama cryogenic trailer and hydrogen trailer (transport) assets of Worthington Industries, Inc. (NYSE: WOR) for $10.0 in cash (“Alabama Trailers”). Worthington Industries, Inc. exited the hydrogen trailer business and sold the business to Chart at a discount. As a result of the acquisition, we recorded a bargain purchase gain of $5.0. Alabama Trailers designs, manufactures and sells cryogenic trailers and hydrogen trailers used in industrial gas and energy applications. The purchase price allocations of Earthly Labs, AdEdge and LAT are preliminary and are based on provisional fair values and subject to revision as we finalize third-party valuations and other analyses. Final determination of the fair values may result in further adjustments to the value of net assets acquired. Contingent Consideration The estimated fair value of contingent consideration was $16.9 for SES and $3.2 for BIG at the date of acquisitions and was valued according to a discounted cash flow approach, which included assumptions regarding the probability of achieving certain targets and a discount rate applied to the potential payments. Potential payments are measured between the period commencing January 1, 2022 and ending on December 31, 2028 based on the attainment of certain earnings targets. The potential payments related to both SES and BIG contingent consideration on a combined basis is between $0.0 and $31.0. For the year ended December 31, 2021, the estimated fair value of contingent consideration related to SES increased by $2.2 while the estimated fair value of contingent consideration related to BIG decreased by $1.1. In connection with the Earthly Labs acquisition, Chart shall pay to the sellers a royalty on sales of a carbon capture unit for residential use launched for sale to the public by Chart in an amount equal to 4% of such sales. Potential royalty payments shall be paid to the sellers during the three year period following Chart’s launch of this product. This product has not yet been developed and as such, the fair value of the contingent consideration liability that arises from this arrangement was insignificant as of December 31, 2021. Valuations are performed using Level 3 inputs as defined in Note 2, “Significant Accounting Policies” and are evaluated on a quarterly basis based on forecasted sales and earnings targets. Contingent consideration liabilities are classified as other current liabilities and other long-term liabilities in the consolidated balance sheets. Changes in the fair value of contingent consideration liabilities, including accretion, are recorded as selling, general and administrative expenses in the consolidated statements of income and comprehensive income. No cash consideration was transferred for contingent consideration as of the acquisition dates and as such, the arrangements represent a noncash investing activity in the statement of cash flows for the years ended December 31, 2021 and 2020. The following table represents the changes to our contingent consideration liabilities:
| SES |  | BIG |  | Total
Balance at December 31, 2020 (1) | $ | 16.9 |  |  | $ | 3.2 |  |  | $ | 20.1 |
Increase (decrease) in fair value of contingent consideration liabilities | 2.2 |  | (1.1) |  |  | 1.1 |
Balance at December 31, 2021 | $ | 19.1 |  |  | $ | 2.1 |  |  | $ | 21.2 |
_______________ (1)For the year ended December 31, 2020, the fair value of contingent consideration liabilities was unchanged.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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