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Acquisitions and Dispositions | 12 Months Ended
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Sep. 30, 2017
Business Combinations [Abstract] |
Acquisitions and Dispositions | Acquisitions and Dispositions Acquisition of Orange-Co, LP Assets On December 2, 2014, the Company completed the acquisition of certain citrus and related assets of Orange-Co, LP, including 51% of the ownership interests of Citree, pursuant to an Asset Purchase Agreement, which is referred to as the Orange-Co Purchase Agreement, dated as of December 1, 2014. The assets the Company purchased include approximately 20,263 acres of citrus groves in DeSoto and Charlotte Counties, Florida, which comprise one of the largest contiguous citrus grove properties in the state of Florida. Total assets acquired were approximately $277,792,000, net of approximately $2,060,000 in cash acquired and approximately $4,838,000 in fair value attributable to noncontrolling interest in Citree, including: (i) approximately $147,500,000 in initial cash consideration funded from the proceeds of the sugarcane disposition and new term loan debt; (ii) $7,500,000 in additional cash consideration released from escrow in equal parts, subject to certain limitations, on December 1, 2015 and June 1, 2016; (iii) the refinancing of Orange-Co, LP’s outstanding debt including approximately $92,290,000 in term loan debt and a working capital facility of approximately $27,857,000 and (iv) the assumption of certain other liabilities totaling approximately $4,705,000. On December 1, 2014, Alico deposited an irrevocable standby letter of credit issued by Rabo Agrifinance, Inc. in the aggregate amount of $7,500,000 into an escrow account to fund the additional cash consideration. On December 1, 2015 and June 1, 2016, the Company paid $3,750,000 of additional consideration, as contemplated by the Orange-Co Purchase Agreement. The Company's $3,750,000 irrevocable letter of credit securing the final payment of the additional consideration was terminated following the final cash consideration payment. This acquisition was accounted for under the acquisition method of accounting. Accordingly, the Company recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisition were expensed as incurred. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and noncontrolling interests is recognized as goodwill. All goodwill recognized will be deductible for income tax purposes. For the fiscal years ended September 30, 2017 and 2016 the Company incurred approximately $0 and $31,000, respectively, in professional and legal costs in connection with the Orange-Co acquisition. These costs are included in general and administrative expenses in the Consolidated and Combined Statements of Operations. The following table summarizes the final allocation of the acquisition cost to the assets acquired and liabilities assumed at the date of acquisition, based on their estimated fair values:
(in thousands) |
Assets: | Amount
Accounts receivable | $ | 888 |
Other current assets | 845 |
Inventories | 35,562 |
Property and equipment: |
Citrus Trees | 164,123 |
Land | 63,395 |
Equipment and other facilities | 13,431 |
Goodwill | 2,246 |
Other assets | 2,140 |
Total assets, net of cash acquired | $ | 282,630 |
Liabilities: |
Accounts payable and accrued liabilities | $ | 4,205 |
Debt | 500 |
Contingent consideration | 7,500 |
Total liabilities assumed | $ | 12,205 |
Assets acquired less liabilities assumed | $ | 270,425 |
Less: fair value attributable to noncontrolling interest | (4,838 | )
Total purchase consideration | $ | 265,587 |
Cash proceeds from sugarcane disposition | $ | 97,126 |
Working capital line of credit | 27,857 |
Term loans | 140,604 |
Total purchase consideration | $ | 265,587 |
The unaudited pro-forma information below for the fiscal years ended September 30, 2015 and 2014 gives effect to this acquisition as if the acquisitions had occurred on October 1, 2013. The pro-forma financial information is not necessarily indicative of the results of operations if the acquisition had been effective as of this date.
(in thousands except per share amounts) | Fiscal Year Ended September 30,
| 2015 |  | 2014
| (unaudited)
Revenues | $ | 153,654 |  |  | $ | 175,420 |
Income from operations | $ | 19,489 |  |  | $ | 35,450 |
Net income attributable to Alico Inc. common stockholders | $ | 12,723 |  |  | $ | 22,906 |
Basic earnings per common share | $ | 1.58 |  |  | $ | 3.12 |
Diluted earnings per common share | $ | 1.58 |  |  | $ | 3.12 |
Deferred Gain on Sale On November 21, 2014, the Company completed the sale of approximately 36,000 acres of land used for sugarcane production and land leasing in Hendry County, Florida to Global Ag Properties, LLC (“Global”) for approximately $97,900,000 in cash. It had previously leased approximately 30,600 of these acres to United States Sugar Corporation (the “USSC Lease”). The USSC Lease was assigned to Global in conjunction with the land sale. The sales price is subject to post-closing adjustments over a ten year period. The Company realized a gain of approximately $42,753,000 on the sale. Initially, $29,140,000 of the gain was deferred due to the Company’s continuing involvement in the property pursuant to a post-closing agreement and the potential price adjustments. The deferral represents the Company’s estimate of the maximum exposure to loss as a result of the continuing involvement (see below). A net gain of approximately $13,613,000 was recognized at the time of the sale and is recognized in Other (expense) income in the Consolidated Statements of Operations for the fiscal year ended September 30, 2015. The Company estimated its maximum exposure to loss over the ten year period to total approximately $42,172,000 on an aggregate undiscounted basis. This estimated maximum exposure to loss was discounted at five percent to determine the initial deferred gain. In May 2017 and 2016, the Company made payments of $1,580,000 and $1,702,000, respectively, to Global pursuant to the sales contract. The amount of USSC’s lease is tied to the market price of sugar, and the Company's payment is required annually in advance, to supplement the lease paid by USSC in the event that the sugar prices are below certain thresholds. The 2016 sugar price remained below the threshold and therefore none of the amount advanced in 2016 will be returned to the Company. The Company has recognized approximately $1,413,000 and $1,406,000 in interest expense and approximately $538,000 and $618,000 of the deferred gain for the fiscal years ended September 30, 2017 and 2016, respectively. Deferred gain on sale consists of the following at September 30, 2017 and September 30, 2016:
(in thousands) | September 30,
| 2017 |  | 2016
Deferred gain on sale | $ | 27,482 |  |  | $ | 28,440 |
Annual guarantee payment, net | (1,042 | ) |  | (1,236 | )
Total deferred gain on sale | $ | 26,440 |  |  | $ | 27,204 |
Estimated payments over the remaining term of the post-closing agreement are summarized in the following table.
(in thousands) |
2018 | $ | 1,924 |
2019 | 2,561 |
2020 | 2,992 |
2021 | 3,346 |
2022 | 3,725 |
Thereafter | 18,696 |
Total | $ | 33,244 |
These estimated payments represent undiscounted cash flows.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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