ACQUISITION OF BASF FACILITY
|6 Months Ended|
Jun. 30, 2016
|ACQUISITION OF BASF FACILITY [Abstract]|
|ACQUISITION OF BASF FACILITY||
7. ACQUISITION OF BASF FACILITY
On May 2, 2016, we purchased the idle BASF facility adjacent to our TC facility in exchange for $2.0 million in cash, transaction costs of approximately $11,000 plus an earnout provision calculated through calendar year 2020 based upon revenue generated by the facility but limited to $1.8 million. The cash payment was funded by working capital. The purchased facility includes production equipment similar to TC’s plus equipment that broadens TC's capabilities and potential markets. The 6.5-acre site also includes substantial storage capacity, several rail and truck loading sites and utility tie-ins to TC. The facility began operations in June 2016 in a limited capacity.
We have accounted for the purchase in accordance with the acquisition method of accounting under Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations” (“ASC 805”). In accordance with ASC 805, we used our best estimates and assumptions to assign fair value to the tangible assets and liabilities acquired at the acquisition date. These estimates are provisional and may be adjusted in future filings.
The assets and liabilities acquired have been included in our consolidated balance sheets and our consolidated statements of income since the date of acquisition.
We recorded an $11.5 million bargain purchase gain on the transaction as calculated in the table below (in thousands).
The business acquired has been idle for the periods presented thus proforma financial presentation would be identical to our consolidated results. We began operating the new facility in June 2016.
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).
Reference 1: http://www.xbrl.org/2003/role/presentationRef