Annual report pursuant to Section 13 and 15(d)

ACQUISITION OF B PLANT

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ACQUISITION OF B PLANT
12 Months Ended
Dec. 31, 2017
ACQUISITION OF B PLANT [Abstract]  
ACQUISITION OF B PLANT
NOTE 3 – ACQUISITION OF B PLANT

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.  We refer to the facility as "B Plant".

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.

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).

Cash paid
 
$
2,011
       
Estimated earnout liability
   
733
       
Purchase Price
         
$
2,744
 
                 
Fixed assets at FMV
               
Land
   
980
         
Site improvements
   
30
         
Buildings
   
1,350
         
Production equipment
   
11,933
         
             
14,293
 
                 
Bargain purchase gain
         
$
11,549
 
 
The business acquired had 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.