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Acquisitions and Joint Ventures | 12 Months Ended
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Dec. 31, 2021
Business Combinations [Abstract] |
Acquisitions and Joint Ventures | 15. Acquisitions and Joint Ventures Environmental Integrated Solutions On June 4, 2020, the Company acquired 100% of the equity interests of Environmental Integrated Solutions (“EIS”) for $10.3 million in cash, which was financed through our revolving credit facility. As additional consideration, the former owners are entitled to earn-out payments based upon a multiple of specified financial results through December 31, 2021, which was estimated to be $0.6 million at the acquisition date. See Note 7 for additional information on the earnout. EIS engineers products that clean air through a variety of technologies including volatile organic compounds (“VOC”) abatement, odor control, regenerative thermal oxidizers, and other air pollution control solutions, which complements our Industrial Process Solutions segment businesses. The following table summarizes the approximate fair values of the assets acquired and liabilities assumed at the date of closing.
(Table only in thousands) |  |  |
Current assets (including cash of $4,212) |  | $ | 6,416 |
Property and equipment |  |  | 26 |
Other assets |  |  | 44 |
Goodwill |  |  | 7,022 |
Intangible - finite life |  |  | 4,840 |
Total assets acquired |  |  | 18,348 |
Current liabilities assumed |  |  | (6,514 | )
Deferred income tax liability |  |  | (920 | )
Net assets acquired |  | $ | 10,914 |
Goodwill recognized represents value the Company expects to be created by combining the various operations of the acquired businesses with the Company’s operations, including the expansion into markets within existing business segments, access to new customers and potential cost savings and synergies. Goodwill related to this acquisition is not deductible for tax purposes. The Company acquired customer lists and tradename intangible assets valued at $4.2 million and $0.6 million, respectively. These assets were determined to have useful lives of 10 years. Acquisition and integration expenses on the Consolidated Statements of Income are related to acquisition activities, which include retention, legal, accounting, banking, and other expenses. During 2021 and 2020, EIS accounted for $19.9 million and $8.1 million in revenue and $2.5 million and $(0.8) million of pre-tax income (loss) (inclusive of the earnout adjustment noted above), respectively. Mader On July 31, 2020, the Company entered into the JV Agreement with Mader in which CECO contributed the net assets of its Effox-Flextor damper business and Mader contributed the net assets of their damper business. Under the terms of the JV Agreement, CECO will hold 70% of the equity in the joint venture, and 50% voting interest. We determined CECO was the primary beneficiary of this variable interest entity and therefore the 30% noncontrolling equity interest is in the Consolidated Balance Sheet. The results of the joint venture are included in our Engineered Systems segment. The fair value of Mader’s net assets contributed was $1.0 million. As of December 31, 2021 and 2020 there were $8.9 million and $6.4 million in current assets, $8.7 million and $8.9 million in long-lived assets, and $9.0 million and $7.6 million in total liabilities related to the Effox-Mader joint venture, respectively included in our Consolidated Balance Sheets. During 2021 and 2020, the Effox-Madder joint venture accounted for $21.4 million and $7.7 million in revenue and $2.5 million and $(0.2) million of pre-tax income (loss). The following table summarizes the approximate fair values of the assets acquired and liabilities assumed at the JV agreement date.
(table only in thousands) |  |  |
Current assets (including cash of $229) |  | $ | 2,040 |
Property and equipment |  |  | 103 |
Goodwill |  |  | 2,085 |
Deferred income tax asset |  |  | 287 |
Total assets assumed |  |  | 4,515 |
Current liabilities assumed |  |  | (515 | )
Other liabilities |  |  | (500 | )
Long term debt |  |  | (2,508 | )
Net assets acquired |  | $ | 992 |
Goodwill recognized represents value the Company expects to be created by combining the various operations of the joint venture with the Company’s operations, including the expansion into markets within existing business segments, access to new customers and potential cost savings and synergies. Goodwill related to this joint venture is not deductible for tax purposes. The following unaudited pro forma financial information represents the Company’s results of operations as if the EIS acquisition and the joint venture with Mader had occurred on January 1, 2019:
|  | December 31, |
(table only in thousands, except per share data) |  | 2020 |  |  | 2019 |
Net sales |  | $ | 329,801 |  |  | $ | 368,027 |
Net income attributable to CECO Environmental Corp. |  |  | 9,728 |  |  |  | 26,980 |
Earnings per share: |  |  |  |  |  |
Basic |  | $ | 0.28 |  |  | $ | 0.77 |
Diluted |  | $ | 0.27 |  |  | $ | 0.76 |
The pro forma results have been prepared for informational purposes only and include adjustments to amortize acquired intangible assets with finite life, reflect additional interest expense on debt used to fund the acquisition, and to record the income tax consequences of the pro forma adjustments. These pro forma results do not purport to be indicative of the results of operations that would have occurred had the purchase been made as of the beginning of the periods presented or of the results of operations that may occur in the future. For the year ended December 31, 2021, the results of operations for the EIS acquisition and joint venture with Mader are included in the Company's results for the full year.

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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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