Acquisitions, Held for Sale, Discontinued Operations and Dispositions

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions, Held for Sale, Discontinued Operations and Dispositions

Purchase of Comfrio Joint Venture

In connection with the 2020 Agro acquisition, the Company acquired 22% of equity ownership in Agrofundo Brazil II Fundode Investimento em Participações or the “Comfrio” joint venture (“JV”). The remaining interests were held by the general partner and two minority shareholders. The JV agreement included a fair value call/put option which would allow the remaining 78% interest in Comfrio to be either purchased by or sold to the Company through either the exercise of the Company’s call option or the exercise of the general partner’s put option. Once the exercise of the put was deemed probable, the Company remeasured its equity interest, which was deemed to be nominal, and the fair value of the put option, which resulted a loss of $56.6 million. The fair value of the put option was determined using inputs classified as Level 3 within the fair value hierarchy. In April 2023, the two parties received regulatory approval from the Brazilian government, and the acquisition closed on May 30, 2023 (the “Acquisition Date”). Total consideration paid was $56.6 million, of which $40.7 million was paid during the three months ended June 30, 2023. Prior to the Acquisition Date, the Company’s 22% equity interest was accounted for as an equity method investment. Given the financial condition of the acquiree, the Company remeasured its interest and determined no gain or loss should be recognized upon the closing of the acquisition.

The estimated fair values associated with the preliminary acquisition accounting primarily include $32.8 million of property, buildings and equipment, $38.0 million of operating lease right of use assets, $17.1 million of accounts receivable, debt of $14.8 million and other liabilities of $56.0 million.

The fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management, including information from prior valuations of similar entities and the books and records of Comfrio. The Company’s estimates and assumptions are subject to change during the measurement period, not to exceed one year from the Acquisition Date. As the initial acquisition accounting is based on preliminary assessments, actual values may materially differ when final information becomes available. The Company believes that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed.

Upon acquisition, the Company committed to a plan to sell Comfrio in its present condition and has initiated a program to locate a buyer and complete the disposition. As Comfrio is a newly acquired business that meets the held-for-sale criteria upon acquisition, the Company has classified the associated assets acquired and liabilities assumed as held for sale and the operations as discontinued operations. The primary components of the net losses from discontinued operations during the three and six months ended June 30, 2023 and 2022 are included in the table below.


	Three Months Ended June 30,				Six Months Ended June 30,
(In Thousands)	2023		2022		2023		2022
Results of discontinued operations
Revenue	$	14,237	$	—	$	14,237	$	—
Operating expenses	16,541		—		16,541		—
Estimated costs of disposal	4,000		—		4,000		—
Loss from partial investment pre-acquisition	1,730		3,288		4,111		4,936
Pre-tax loss	(8,034)		(3,288)		(10,415)		(4,936)
Income tax expense	(241)		—		(241)		—
Loss from discontinued operations, net of tax	$	(8,275)	$	(3,288)	$	(10,656)	$	(4,936)

During the fourth quarter of 2022, the Company entered into a loan agreement with Comfrio, in which Comfrio borrowed $25.0 million from Americold (of which $15 million was borrowed during the first quarter of 2023) at a 10% annual fixed interest rate. During the three months ended June 30, 2023, the Company fully impaired the outstanding balance.

Sale of Outstanding Minority Ownership in LATAM JV

On May 30, 2023, the Company sold its remaining 15% equity interest to the LATAM JV partner for total proceeds of $36.9 million and recognized a corresponding gain of $0.3 million in “Other (income) expense, net,” in the Condensed Consolidated Statement of Operations.