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Acquisitions | 6 Months Ended
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Jun. 30, 2020
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS 2020 Acquisitions On February 13, 2020, the Company purchased substantially all of the assets of Delta Separations, LLC, a California limited liability company, and Teaching Tech, LLC, a California limited liability company (collectively described as "Delta Separations"). Delta Separations was a privately-held engineering company primarily engaged in the assembly and sale of centrifugal ethanol-based extraction systems. The results of Delta Separations have been included in the Company's consolidated financial results since the date of acquisition within the Company's Renewable Energy and Conservation segment. The purchase consideration for the acquisition of Delta Separations was $47.1 million, which includes a working capital adjustment and certain other adjustments provided for in the asset purchase agreement. The purchase price for the acquisition of the assets was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess consideration was recorded as goodwill and approximated $32.9 million, all of which is deductible for tax purposes. Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and presence in the extraction processing markets. The allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):
Working capital | $ | 4,063 |
Property, plant and equipment | 219 |
Acquired intangible assets | 13,000 |
Other assets | 951 |
Other liabilities | (4,027) |
Goodwill | 32,906 |
Fair value of purchase consideration | $ | 47,112 |
The intangible assets acquired in this acquisition consisted of the following (in thousands):
| Fair Value |  | Weighted-Average Amortization Period
Trademarks | $ | 6,000 |  |  | Indefinite
Technology | 3,200 |  |  | 10 years
Customer relationships | 3,200 |  |  | 11 years
Non-compete agreements | 300 |  |  | 5 years
Backlog | 300 |  |  | 0.25 years
Total | $ | 13,000 |  |  |
On January 15, 2020, the Company purchased substantially all of the assets of Thermo Energy Systems Inc. ("Thermo"), a Canadian-based, privately held provider of commercial greenhouse solutions in North America supporting the plant based organic food market. The results of Thermo have been included in the Company's consolidated financial results since the date of acquisition within the Company's Renewable Energy and Conservation segment. The preliminary purchase consideration for the acquisition of Thermo was $7.3 million. The purchase price for the acquisition was preliminarily allocated to the assets acquired and liabilities assumed based upon their respective estimated fair values and the remaining consideration was recorded to goodwill. Goodwill of approximately $16.1 million was recorded, all of which is deductible for tax purposes. Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and increased presence in the commercial greenhouse markets. The preliminary allocation of the purchase price is subject to adjustments during the measurement period as third-party valuations are finalized. The final purchase price allocation will be completed no later than the first quarter of 2021. The preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):
Cash | $ | 135 |
Working capital | (19,718) |
Property, plant and equipment | 1,069 |
Acquired intangible assets | 9,750 |
Other current assets | 35 |
Other assets | 1,335 |
Other liabilities | (1,335) |
Goodwill | 16,062 |
Fair value of purchase consideration | $ | 7,333 |
The intangible assets acquired in this acquisition consisted of the following (in thousands):
| Fair Value |  | Weighted-Average Amortization Period
Trademarks | $ | 660 |  |  | 3 years
Technology | 2,639 |  |  | 15 years
Customer relationships | 6,451 |  |  | 10 years
Total | $ | 9,750 |  |  |
2019 Acquisition On August 30, 2019, the Company acquired all of the outstanding membership interests of Apeks LLC ("Apeks"), a designer and manufacturer of botanical oil extraction systems and equipment. The results of Apeks have been included in the Company's consolidated financial results since the date of acquisition within the Company's Renewable Energy and Conservation segment. The aggregate purchase consideration for the acquisition of Apeks was $12.6 million, which includes a working capital adjustment and certain other adjustments provided for in the membership interest purchase agreement. The purchase price for the acquisition was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess consideration was recorded as goodwill and approximated $6.4 million, all of which is deductible for tax purposes. Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and presence in the extraction processing markets. The allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):
Cash | $ | 4,154 |
Working capital | (1,515) |
Property, plant and equipment | 1,059 |
Acquired intangible assets | 3,000 |
Other assets | 508 |
Other liabilities | (1,081) |
Goodwill | 6,436 |
Fair value of purchase consideration | $ | 12,561 |
The intangible assets acquired in this acquisition consisted of the following (in thousands):
| Fair Value |  | Weighted-Average Amortization Period
Trademarks | $ | 1,400 |  |  | Indefinite
Technology | 900 |  |  | 7 years
Customer relationships | 700 |  |  | 6 years
Total | $ | 3,000 |  |  |
In determining the allocation of the purchase price to the assets acquired and the liabilities assumed, the Company uses all available information to make fair value determinations using Level 3 unobservable inputs in which little or no market data exists, and therefore, engages independent valuation specialists to assist in the fair value determination of the acquired long-lived assets. The acquisitions of Delta Separations, Thermo and Apeks were funded from available cash on hand. The Company incurred certain acquisition-related costs composed of legal and consulting fees. These costs were recognized as a component of selling, general, and administrative expenses in the consolidated statement of operations. The Company also recognized costs as a component of cost of sales related to the sale of inventory at fair value as a result of allocating the purchase price of recent acquisitions. The acquisition-related costs consisted of the following for the three and six months ended June 30 (in thousands):
| Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
| 2020 |  | 2019 |  | 2020 |  | 2019
Selling, general and administrative costs | $ | 588 |  |  | $ | 4 |  |  | $ | 1,848 |  |  | $ | 4 |
Cost of sales | 634 |  |  | — |  |  | 634 |  |  | — |
Total acquisition-related costs | $ | 1,222 |  |  | $ | 4 |  |  | $ | 2,482 |  |  | $ | 4 |

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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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- References No definition available. + Details
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