Investment in Unconsolidated Affiliates

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investment in unconsolidated affiliates

Investment in Unconsolidated Affiliates

Biosyn Holdings, LLC and Biosynthetic Technologies

In February 2018, the Company and The Heritage Group formed Biosyn Holdings, LLC (“Biosyn”) for the purpose of acquiring Biosynthetic Technologies, LLC (“Biosynthetic Technologies”), a startup company which developed an intellectual property portfolio for the manufacture of renewable-based and biodegradable esters. In March 2019, the Company sold its investment in Biosyn to The Heritage Group, a related party, for total proceeds of $5.0 million which was recorded in the “other” component of other income (expense) on the unaudited condensed consolidated statement of operations. Prior to the sale of Biosyn, the Company accounted for its ownership in Biosyn under the equity method of accounting.

Fluid Holding Corp.

In connection with the Anchor Transaction completed in November of 2017, the Company received a 10% investment in FHC as part of the total consideration for Anchor. FHC provides oilfield services and products to customers globally. The Company’s investment in FHC is a non-marketable equity security without a readily determinable fair value. The Company recorded this investment using a measurement alternative which measures the security at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes with a same or similar security from the same issuer.

During the second quarter of 2019, the Company determined the fair value of the investment in FHC was less than the carrying value of $25.4 million after evaluating indicators of impairment and valuing the investment using projected future cash flows and other Level 3 inputs. Utilizing an income approach, value indications are developed by discounting expected cash flows to their present value at a rate of return that incorporates the risk-free rate for the use of funds, the expected rate of inflation and risks associated with the company. As a result, the Company recorded an impairment charge of $16.1 million in Loss on impairment and disposal of assets in the unaudited condensed consolidated statements of operations for the three months and six months ended June 30, 2019.