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Business Combinations | 12 Months Ended
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Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
Business Combinations | Business Combinations Fronti Fabrications, Inc. Acquisition On May 31, 2022, we acquired 100% of the equity interests of Fronti Fabrications, Inc. (“Fronti”) for $20.6 in cash or $20.4 net of $0.2 cash acquired. Fronti is a specialist in engineering, machining and welding for the cryogenic and gas industries, and also supplies new build pressure vessels and cold boxes, and performs repairs with certification to American Society of Mechanical Engineers (ASME) code. The preliminary estimated fair value of the total net assets acquired includes goodwill, identifiable intangible assets and other net assets at the date of acquisition in the amounts of $14.3, $5.3 and $1.0, respectively. Goodwill and intangible assets recorded for the Fronti acquisition are expected to be deductible for tax purposes. CSC Cryogenic Service Center AB Acquisition On May 16, 2022, we acquired 100% of the equity interests of CSC Cryogenic Service Center AB (“CSC”) for $3.8 in cash. The preliminary estimated fair value of the total net assets acquired include goodwill and other net assets at the date of acquisition in the amounts of $3.1 and $0.7. Goodwill recorded for the CSC acquisition is not expected to be deductible for tax purposes. CSC brings a strong service footprint in the Nordic region with many overlapping customers to Chart, allowing us to broaden our service and repair presence geographically. Earthly Labs Inc. Acquisition On December 14, 2021, we acquired the remaining 85% of Earthly Labs, Inc. (“Earthly Labs).” The acquisition was completed for cash and stock for a previously disclosed purchase price of $63.1. During the first quarter of 2022, we adjusted the value of the stock consideration to reflect a common stock price of $160.63 per share, which lowered the purchase price to $61.9 or $58.4 net of $3.5 cash acquired. 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 existing carbon dioxide emissions from industrial sources while converting molecules to value. The fair value of the total net assets acquired includes goodwill, identifiable intangible assets and other net liabilities at the date of acquisition in the amounts of $34.3, $45.5 and $9.8, respectively (as previously reported: $47.2, $27.0 and $11.1, respectively). Amounts previously reported were preliminary and based on provisional fair values. During 2022, we received and analyzed new information about certain assets acquired and subsequently adjusted their fair values accordingly. Intangible assets consists of unpatented technology, trade names, customer relationships and backlog. Goodwill and intangible assets recorded for the Earthly Labs acquisition are not expected to be deductible for tax purposes. During the fourth quarter of 2022 the Earthly Labs purchase price allocation was finalized. AdEdge Acquisition On August 27, 2021, we acquired 100% of the equity interests of AdEdge Holdings, LLC (“AdEdge”) for $37.5 in cash, net of $1.4 of cash acquired and a final net working capital adjustment of $0.8 finalized during the first quarter of 2022. 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 fair value of the total net assets acquired includes goodwill, identifiable intangible assets and other net assets at the date of acquisition in the amounts of $16.4, $19.0 and $3.5, respectively. During 2022, we increased goodwill by $0.5, which mainly included the $0.8 final net working capital adjustment mentioned above, a retention bonus adjustment and an adjustment to the trade name. Goodwill and intangible assets recorded for the AdEdge acquisition are expected to be deductible for tax purposes. During the third quarter of 2022 the AdEdge purchase price allocation was finalized. As discussed in Note 6, “Investments,” we previously held a 50% ownership interest in a joint venture in AdEdge India. On May 4, 2022, we acquired the remaining 50% of the shares for $0.4 in cash (subject to certain customary adjustments) or $0.3 net of $0.1 cash acquired. AdEdge India focuses on water and wastewater treatment and surface water bodies rejuvenation in the South Asian markets. 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 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 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. Goodwill was established due to the benefits outlined above, as well as the benefits derived from the 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. During the third quarter of 2022 the LAT purchase price allocation was finalized. The following table summarizes the 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 (1) | 42.3
Other assets (1) | 4.2
Property, plant and equipment | 2.6
Cash and cash equivalents | 1.4
Liabilities (1) | (16.2) |
Net assets acquired | $ | 78.0 |
_______________ (1)As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2021, we reported goodwill, other assets and liabilities of $42.1, $4.6 and $16.4, respectively. During 2022, we recorded purchase price adjustments that increased goodwill by $0.2, decreased other assets by $0.4 and decreased liabilities by $0.2. Information regarding identifiable intangible assets acquired in the LAT acquisition is presented below:
| Weighted-average Estimated Useful Life |  | 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 fair value of the total net assets acquired includes 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. Intangible assets consists of customer relationships, unpatented technology, trademarks and trade names, backlog and non-compete agreements. Goodwill and intangible assets recorded for the Cryo Technologies acquisition are expected to be deductible for tax purposes. During the first quarter of 2022, the Cryo Technologies purchase price allocation was finalized. Preliminary Purchase Price Allocations The purchase price allocations of Fronti and CSC 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 our Sustainable Energy Solutions, Inc. business (“SES”) and $3.2 for our BlueInGreen, LLC business (“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, 2023 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, 2022, the estimated fair value of contingent consideration related to SES decreased by $2.8 while the estimated fair value of contingent consideration related to BIG decreased by $1.1. 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 both December 31, 2022 and 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, 2022 and 2021. The following table represents the changes to our contingent consideration liabilities:
| SES |  | BIG |  | Total
Balance at December 31, 2021 | $ | 19.1 |  |  | $ | 2.1 |  |  | $ | 21.2 |
Decrease in fair value of contingent consideration liabilities | (2.8) |  |  | (1.1) |  |  | (3.9) |
Balance at December 31, 2022 | $ | 16.3 |  |  | $ | 1.0 |  |  | $ | 17.3 |

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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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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