XML 25 R10.htm IDEA: XBRL DOCUMENT
v3.21.2

Business Combinations | 9 Months Ended
--- | ---
Sep. 30, 2021
Business Combinations [Abstract] |
Business Combination Disclosure | Business Combination Eagle Proppants Holdings On September 18, 2020, the Company entered into an Equity Purchase and Sale Agreement (the “Purchase Agreement”) with Eagle Materials Inc., a Delaware corporation (“Eagle”), pursuant to which the Company acquired all of the issued and outstanding interests in Eagle Oil and Gas Proppants Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Eagle (“Eagle Proppants Holdings”), from Eagle for aggregate non-cash consideration of approximately $2,080. In satisfaction of the purchase price, the Company issued to Eagle 1,504 shares of its common stock; the Company issued an additional 14 shares of its common stock in January 2021 as settlement of the net working capital adjustment. The number of shares issued was determined by the weighted average trading price of the Company’s common stock over the twenty days preceding the date of the Purchase Agreement. The primary assets of Eagle Proppants Holdings and its subsidiaries include a frac sand mine and related processing facility in Utica, Illinois and a transload facility in nearby Peru, Illinois. The Utica facility has approximately 1.6 million tons of annual processing capacity and has access to the BNSF rail line through the Peru, Illinois transload facility. The table below presents the calculation of the total purchase consideration:
Base price consideration |  | $ | 2,000 |
20-day volume weighted average price of Smart Sand stock |  | $ | 1.33 |
Shares issued |  | 1,504 |
Closing share price on September 18, 2020 |  | $ | 1.37 |
Total equity issued |  | $ | 2,060 |
Net working capital adjustment |  | $ | 20 |
Total purchase consideration |  | $ | 2,080 |
The Company’s final allocation of the purchase price in connection with the acquisition was calculated as follows:
|  |  |  | Fair Value
Assets Acquired |  |
| Cash |  | $ | 309 |
| Accounts receivable |  | 75 |
| Inventory |  | 2,459 |
| Prepaid expenses and other current assets |  | 124 |
| Property, plant and equipment |  | 60,310 |
| Right-of-use assets |  | 9,603 |
|  | Total assets acquired |  | 72,880 |
Liabilities Assumed |  |
| Accounts payable |  | 16 |
| Accrued expenses and other liabilities |  | 2,008 |
| Asset retirement obligations |  | 8,424 |
| Operating lease liabilities |  | 9,603 |
| Deferred income taxes |  | 11,149 |
|  | Total liabilities assumed |  | 31,200 |
|  | Estimated fair value of net assets acquired |  | $ | 41,680 |
The estimated aggregate fair value of the net assets acquired was $41,680, which exceeded the total consideration and results in a bargain purchase gain of $39,600 on the acquisition date, which is included in net income for the year ended December 31, 2020. The Company believes that the seller wanted to exit the business relatively quickly and that there were a limited number of potential buyers due to the downturn in the market, which resulted in the bargain purchase gain. The Company determined the fair values of the acquired assets and assumed liabilities based on the highest and best use of such assets as required by GAAP. Cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other liabilities were based on underlying assets and liabilities whose carrying value approximates fair value. The Company acquired $2,050 of contractual receivables; however, it does not expect to collect on $1,975 of such contractual receivables as these customers are in bankruptcy proceedings. The fair value of inventory was determined using market prices the Company expected to receive for the inventory when it is sold. Operating leases were considered to be at market rates and the fair values of the associated operating lease liabilities and right-of-use assets were determined using the Company’s lease accounting policies. The fair value of the asset retirement obligations was calculated consistently with the Company’s other asset retirement obligations and includes assumptions about inflation and discount rates over time to represent the estimated future cost of dismantling, restoring and reclaiming the plant and mines in accordance with legal obligations. Deferred income taxes represent the temporary differences between future expenses for GAAP purposes and income tax purposes at the Company’s applicable enacted tax rate. The Company determined the fair values of the property, plant and equipment with the assistance of external valuation specialists. The fair value was based on the highest and best use, as required by GAAP, which was determined to be the orderly liquidation value rather than the value imputed by other valuation methods. Total acquisition costs incurred in the year ended December 31, 2020 were $891. The Company’s allocation of the purchase price was complete as of December 31, 2020.

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration