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SIGNIFICANT ACQUISITIONS AND DIVESTITURES | 12 Months Ended
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Dec. 31, 2020
Business Combinations [Abstract] |
SIGNIFICANT ACQUISITIONS AND DIVESTITURES | SIGNIFICANT ACQUISITIONS AND DIVESTITURES Acquisitions On December 13, 2019, the Company completed the acquisition of Zumbro. The Company made payments of $52,403 on the acquisition date, amounting to $47,058 to the former shareholders and $5,345 to Zumbro's lenders to pay Zumbro debt. Considering the cash acquired of $686, net payments made to the former shareholders were $46,372. In May 2020, the Company received an adjustment for working capital acquired of $561. The estimated goodwill of $18,505 arising from the acquisition consists largely of expected synergies, including the combined entities' experience and technical problem-solving capabilities, and acquired workforce. The goodwill is assigned to Human Nutrition & Health ("HNH") and $4,723 is deductible for income taxes. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed:
Cash and cash equivalents |  | $ | 686 |
Accounts receivable |  | 3,314 |
Inventories |  | 4,052 |
Prepaid & other current assets |  | 521 |
Property, plant and equipment |  | 15,245 |
Right of use assets |  | 3,181 |
Customer relationships |  | 8,200 |
Developed technology |  | 4,400 |
Trade name |  | 2,300 |
Other non-current assets |  | 10 |
Accounts payable & accrued expenses |  | (1,651) |
Lease liabilities |  | (3,181) |
Debt |  | (5,345) |
Deferred income taxes |  | (3,740) |
Goodwill |  | 18,505 |
Amount paid to shareholders |  | 46,497 |
Zumbro debt paid on purchase date |  | 5,345 |
Total amount paid on acquisition date |  | $ | 51,842 |
The estimated valuation of the fair value of tangible and intangible assets acquired and liabilities assumed are based on management's estimates and assumptions that are subject to change. In preparing our fair value estimates of the intangible assets and certain tangible assets acquired, management, among other things, consulted an independent advisor. Valuation methods utilized included cost and market approaches for property, plant and equipment, excess earnings method for customer relationships and the relief from royalty method for other intangible assets. Customer relationships are amortized over a 15-year period utilizing an accelerated method based on the estimated average customer attrition rate. Trade name and developed technology are amortized over 10 years and 12 years, respectively, utilizing the straight-line method as the consumption pattern of the related economic benefits cannot be reliably determined. The Company is indemnified for tax liabilities prior to the acquisition date. Indemnified tax liabilities will create an indemnification asset (receivable). An indemnification asset balance has not been established. On May 27, 2019, the Company acquired 100 percent of the outstanding common shares of Chemogas. The Company made payments of approximately €99,503 (translated to $111,324) on the acquisition date, amounting to approximately €88,579 (translated to $99,102) to the former shareholders and approximately €10,924 (translated to $12,222) to Chemogas' lender to pay Chemogas bank debt. Considering the cash acquired of €3,943 (translated to $4,412), net payments made to the former shareholders were €84,636 (translated to $94,690). The goodwill of $59,319 that arose on the acquisition date consists largely of expected synergies, including the combined entities' experience and technical problem-solving capabilities, and acquired workforce. The goodwill is assigned to the Specialty Products segment and is not tax deductible for income tax purposes. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed:
Cash and cash equivalents |  | $ | 4,412 |
Accounts receivable |  | 4,176 |
Inventories |  | 957 |
Property, plant and equipment |  | 15,972 |
Customer relationships |  | 39,158 |
Developed technology |  | 2,461 |
Trade name |  | 1,119 |
Other assets |  | 1,491 |
Accounts payable |  | (3,261) |
Bank debt |  | (12,222) |
Other liabilities |  | (1,030) |
Pension obligation (net) |  | (594) |
Deferred income taxes |  | (12,856) |
Goodwill |  | 59,319 |
Amount paid to shareholders |  | 99,102 |
Chemogas bank debt paid on purchase date |  | 12,222 |
Total amount paid on acquisition date |  | $ | 111,324 |
The valuation of the fair value of tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. In preparing our fair value estimates of the intangible assets and certain tangible assets acquired, management, among other things, consulted an independent advisor. Valuation methods utilized included cost and market approaches for property, plant and equipment, excess earnings method for customer relationships and the relief from royalty method for other intangible assets. Customer relationships are amortized over a 20-year period utilizing an accelerated method based on the estimated average customer attrition rate. Trade name and developed technology are amortized over 2 years and 10 years, respectively, utilizing the straight-line method as the consumption pattern of the related economic benefits cannot be reliably determined. The Company is indemnified for tax liabilities prior to the acquisition date. Indemnified tax liabilities will create an indemnification asset (receivable). At this time, an indemnification asset balance has not been established. In connection with Chemogas and Zumbro acquisitions, the Company incurred transaction and integration costs of $1,480 and $1,947 for the year ended December 31, 2020 and 2019, respectively. In 2018, the Company, through its subsidiary, Balchem Italia, completed one immaterial acquisition, Bioscreen Technologies Srl. Total transaction and integration costs related to recent acquisitions, including the Chemogas and Zumbro acquisitions described above, are recorded in general and administrative expenses. These costs amounted to $2,011, $2,273, and $1,786 for the years ended December 31, 2020, 2019 and 2018, respectively. DivestitureOn September 6, 2019, the Company sold an insignificant portion of its business. As a result of the transaction, the Company recorded a gain on sale, which was immaterial to the consolidated financial statements and included in general and administrative expenses. Operating results for the portion of the business sold were insignificant relative to the Company’s consolidated financial results for year ended December 31, 2019.

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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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