XML 27 R16.htm IDEA: XBRL DOCUMENT v3.25.3
Acquisition
 9 Months Ended
Sep. 30, 2025
Acquisition  
Acquisition

Note 10 – Acquisition

On June 6, 2024, the Company’s subsidiary Hudson Technologies Company completed the acquisition of substantially all the business assets of USA United Suppliers of America, Inc. (d/b/a USA Refrigerants) (“USA Refrigerants”) and B&B Jobber Services, Inc. (collectively, the “USA Refrigerants Acquisition”). The consideration for the USA Refrigerants Acquisition was approximately $20.7 million in cash, paid at the closing, and provides for a further contingent payment of up to $2.0 million payable, to the extent earned, approximately 18 months from the closing date. The Company estimated the fair value of this contingent earn-out liability to be $1.6 million as of June 6, 2024 and December 31, 2024, which was recorded in other short-term liabilities on the consolidated balance sheet. The Company determined the earn-out criteria would not be met and as a result in the third quarter of 2025, the Company reduced the earn-out liability to zero. The Company recognized $1.6 million as other income in the Consolidated Statement of Income.

The following table summarizes the final fair values of the assets acquired and liabilities assumed from the USA Refrigerants Acquisition:

Consideration

​

​

​

​

​

Cash

    

$

20,670

Contingent consideration

​

 

1,600

Total consideration transferred

​

$

22,270

​

Identifiable assets acquired

​

​

​

​

​

​

​

​

    

Amortization life

​

Fair Value

​

    

(in months)

    

(in thousands)

Inventories

​

​

​

$

5,073

Covenant not to compete

​

60

​

 

60

Customer relationships

​

24

​

 

1,120

Tradename

​

60

​

 

1,540

Total identified assets

​

​

​

​

7,793

Goodwill

​

​

​

 

14,477

Total net assets acquired

​

​

​

$

22,270

​

The fair values of the acquired intangibles were determined using discounted cash flow models using a discount factor based on an estimated risk-adjusted weighted average cost of capital. The customer relationships were valued using the multi-period excess-earnings method, a form of the income approach.

The acquisition resulted in the recognition of $14.5 million of goodwill, of which $12.9 million will be deductible for tax purposes. Goodwill largely consists of expected growth in revenue from new customer acquisitions over time.

The following table provides unaudited pro forma total revenues and results of operations for the periods ended September 30, 2024 as if USA Refrigerants had been acquired on January 1, 2022. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as a step-up in basis in inventory, and amortization expense on intangible assets arising from the acquisition. The pro forma results do not include any anticipated cost synergies or other effects of any planned integration. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the USA Refrigerants Acquisition been completed at the beginning of 2022, nor are they indicative of the future operating results of the combined companies (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

Three Months

​

Nine Months

​

​

ended September 30,

​

ended September 30,

​

    

2024

    

2024

(in thousands)

 

​

​

​

​

​

Revenues

​

$

61,943

​

$

211,408

Net income

​

​

7,806

​

​

29,297

​

In relation to the USA Refrigerants Acquisition, the Company incurred acquisition costs of $0.3 million for the three-month and nine-month periods ended September 30, 2024, respectively, which are included in selling, general and administrative expenses in the consolidated statements of income.