BUSINESS COMBINATIONS

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

In June 2023, we entered into an asset purchase agreement with Consolidated Waste Services, LLC and its affiliates (dba as Twin Bridges), pursuant to which we agreed to acquire assets in the greater Albany, New York area for total consideration of approximately $219,000 ("Twin Bridges Acquisition"), subject to the terms and conditions set forth in the agreement. The Twin Bridges Acquisition includes two collection operations, one transfer station, one material recovery facility, one office building, and several satellite properties. The Twin Bridges Acquisition is subject to customary closing conditions, including the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Act, and the absence of any investigation by any governmental entity regarding the legality of the transactions contemplated by the asset purchase agreement. The waiting period under the Hart-Scott-Rodino Act has expired. On July 6, 2023, we received a subpoena duces tecum from the New York State Attorney General (“NYAG”) seeking information about the Twin Bridges Acquisition. We are cooperating with the NYAG to address the agency’s questions. The Twin Bridges Acquisition is expected to be funded with the net proceeds from an equity offering completed on June 16, 2023. See Note 9, Stockholders' Equity for further disclosure regarding the equity offering.

In the six months ended June 30, 2023, we acquired two businesses: the GFL Acquisition, which includes solid waste collection, transfer and recycling operations in Pennsylvania, Maryland and Delaware whose assets are allocated between our Mid-Atlantic region and Resource Solutions operating segments, as well as a stand alone solid waste business in our Western region. In the six months ended June 30, 2022, we acquired eight businesses primarily related to our solid-waste operations, which included solid-waste collection, recycling, transfer station and transportation businesses.

The operating results of these businesses are included in the accompanying unaudited consolidated statements of operations from each date of acquisition, with the exception of the GFL Acquisition whose operations did not commence until July 1, 2023, and the purchase price has been allocated to the net assets acquired based on fair values at each date of acquisition with the residual amounts recorded as goodwill. Purchase price allocations are based on information existing at the acquisition dates or upon closing the transactions, including contingent consideration. Acquired intangible assets other than goodwill that are subject to amortization include customer relationships, trade names and covenants not-to-compete. Such assets are amortized over a two-year to ten-year period from the date of acquisition. All amounts recorded to goodwill are expected to be deductible for tax purposes, with the exception of one of the GFL Subsidiaries acquired as a part of the GFL Acquisition in the six months ended June 30, 2023.

A summary of the purchase price paid and the purchase price allocation for acquisitions follows:


	Six Months Ended June 30,
	2023		2022
Purchase Price:
Cash used in acquisitions, net of cash acquired	$	544,359	$	55,053



Holdbacks to sellers and contingent consideration	1,900		3,842
Total consideration	$	546,259	$	58,895
Allocated as follows:
Current assets	$	15,364	$	7,584




Property, plant and equipment:
Land	2,213		2,804

Buildings and improvements	8,666		5,308
Machinery and equipment	90,276		6,712
Operating lease right-of-use assets	11,260		405
Intangible assets:

Covenants not-to-compete	10,550		1,415
Customer relationships	93,000		9,725
Other non-current assets	—		40
Deferred tax liability	(5,160)		—
Current liabilities	(15,195)		(3,577)







Operating lease liabilities, less current portion	(9,887)		(282)
Fair value of assets acquired and liabilities assumed	201,087		30,134
Excess purchase price allocated to goodwill	$	345,172	$	28,761

Certain purchase price allocations, including the GFL Acquisition which is subject to finalizing the third-party valuation, are preliminary and are based on information existing at the acquisition dates or upon closing the transaction. Accordingly, the purchase price allocations are subject to change.

Unaudited pro forma combined information that shows our operational results as though each acquisition completed since the beginning of the prior fiscal year had occurred as of January 1, 2022 is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues	$	335,363	$	335,299	$	645,821	$	626,980
Operating income	$	25,982	$	35,543	$	39,734	$	50,250
Net income	$	7,494	$	19,985	$	13,113	$	26,421

Basic earnings per share attributable to common stockholders:
Weighted average common shares outstanding	52,885		51,642		52,331		51,567
Basic earnings per common share	$	0.14	$	0.39	$	0.25	$	0.51
Diluted earnings per share attributable to common stockholders:
Weighted average common shares outstanding	52,980		51,781		52,427		51,720
Diluted earnings per common share	$	0.14	$	0.39	$	0.25	$	0.51

The unaudited pro forma results set forth in the table above have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisitions occurred as of January 1, 2022 or of the results of our future operations. Furthermore, the unaudited pro forma results do not give effect to all cost savings or incremental costs that may occur as the result of the integration and consolidation of the completed acquisitions.