Acquisitions

12 Months Ended

Dec. 31, 2019

ACQUISITIONS

Martin Transport, Inc. Stock Purchase Agreement. On January 2, 2019, the Partnership acquired all of the issued and outstanding equity interests of MTI, a wholly-owned subsidiary of Martin Resource Management Corporation which operates a fleet of tank trucks providing transportation of petroleum products, liquid petroleum gas, chemicals, sulfur and other products, as well as owns 23 terminals located throughout the U.S. Gulf Coast and Southeastern United States for total consideration as follows:



Purchase price¹	$	135,000
Plus: Working Capital Adjustment	2,795
Less: Finance lease obligations assumed	(11,682		)
Cash consideration paid	$	126,113

¹The stock purchase agreement also includes a $10,000 earn-out based on certain performance thresholds. The performance threshold related to financial results for the year ended December 31, 2019 was not achieved, which resulted in a reduction in the potential earn-out by $3,333.

The transaction closed on January 2, 2019 and was effective as of January 1, 2019 and was funded with borrowings under the Partnership's revolving credit facility.

This acquisition is considered a transfer of net assets between entities under common control. The acquisition of MTI was recorded at the historical carrying value of the assets at the acquisition date, which were as follows:



Accounts receivable, net	$	11,724
Inventories	1,138
Due from affiliates	1,042
Other current assets	897
Property, plant and equipment, net	25,383
Goodwill	489
Other noncurrent assets	362
Current installments of finance lease obligations	(5,409		)
Accounts payable	(2,564		)
Due to affiliates	(482		)
Other accrued liabilities	(2,588		)
Finance lease obligations, net of current installments	(6,272		)
Historical carrying value of assets acquired	$	23,720

The excess purchase price over the historical carrying value of the assets at the acquisition date was $102,393 and was recorded as an adjustment to "Partners' capital (deficit)".

The separate results of operations related to MTI for the years ended December 31, 2018 and 2017, which were recast as part of the Partnership's Consolidated Statements of Operations, were as follows:



	For the Year Ended December 31,
	2018			2017

Transportation revenue	$	125,333		$	112,127

Operating expenses	105,212			104,304
Selling, general and administrative	5,246			4,449
Depreciation and amortization	3,413			2,284
Total costs and expenses	113,871			111,037

Other operating income, net	596			1,491
Operating income	12,058			2,581

Other income (expense):
Interest expense	(312		)	(26		)
Other, net	12			33

Income before income taxes	11,758			2,588
Income tax expense (benefit)	208			(193		)
Net income	$	11,550		$	2,781

Acquisition of Terminalling Assets. On February 22, 2017, the Partnership acquired 100% of the membership interests of MEH South Texas Terminals LLC ("MEH"), a subsidiary of Martin Resource Management Corporation, for a purchase price of $27,420 (the "Hondo Acquisition"), which was was funded with borrowings under the Partnership's revolving credit facility. At the date of acquisition, MEH was in the process of constructing an asphalt terminal facility in Hondo, Texas (the "Hondo Terminal"), which will serve the asphalt market in San Antonio, Texas and surrounding areas. This acquisition is considered a transfer of net assets between entities under common control. The acquisition of these assets was recorded at the historical carrying value of the assets at the acquisition date. The excess of the purchase price over the carrying value of the assets of $7,887 was recorded as an adjustment to "Partners' capital." During 2018, the Partnership paid an additional $26 related to a purchase price true-up, which was recorded as a further adjustment to "Partners' capital" for the year ended December 31, 2018.



Purchase price	$	27,420
Purchase price true-up	26
Historical carrying value of assets allocated to "Property, plant and equipment"	19,533
Excess purchase price over carrying value of acquired assets	$	7,913

As no individual line item of the historical financial statements of the acquired assets was in excess of 3% of the Partnership's relative consolidated financial statement captions, the Partnership elected not to retrospectively recast the historical financial information to include these assets.