Business Combination (Tables)

12 Months Ended

Dec. 31, 2015

Summary of purchase consideration transferred

(in thousands)	Calculation of Purchase Price (As Initially Reported)		Measurement Period Adjustments		Calculation of Purchase Price (As Adjusted)
Cash consideration	$	635,000	$	—	$	635,000
Stock consideration (1)	210,000		—		210,000
Warrant consideration (2)	19,020		—		19,020
Deferred payment (3)	17,172		—		17,172
Tax amortization benefit contingency (4)	145,174		8,784		153,958
Working capital payment to Dow (5)	—		15,057		15,057

Total purchase price	$	1,026,366	$	23,841	$	1,050,207

(1)

The Company issued 17,500,000 shares of common stock valued at $12.00 per share as of July 31, 2015.

(2)

As discussed above, the Company entered into a Warrant Purchase Agreement whereby it agreed to issue to Dow a certain number of warrants by April 30, 2016. The Company calculated the fair value of the 6,000,000 warrants expected to be issued to Dow at $3.17 per warrant as of July 31, 2015.

(3)

As discussed above, the Company agreed to pay Dow a deferred payment of $50 million subject to the achievement of a specified average adjusted EBITDA level over the two year period from January 1, 2016 to December 31, 2017. The Company estimated the fair value of the deferred payment using the Black-Scholes option pricing model.

(4)

As discussed above, the Company entered into a Tax Receivables Agreement with Dow. The Company estimated the fair value of future cash payments based upon its estimate that the undiscounted cash payments to be made total approximately $334.0 million and are based on an estimated intangible write-up amortized over 15 years, tax effected at 37%, with each amortized amount then discounted to present value utilizing an appropriate market discount rate to arrive at the estimated fair value of the cash payments and the associated liability.

(5)

As discussed above, pursuant to the terms of the Purchase Agreement, the amount of the Cash Consideration paid as part of the purchase price was subject to adjustment following the Closing based upon the working capital of the AgroFresh Business as of the Closing Date being greater or less than a target level of working capital determined in accordance with the Purchase Agreement.

Summary of purchase price allocation

(in thousands)	Preliminary Purchase Price Allocation (As Initially Reported)			Measurement Period Adjustments			Preliminary Purchase Price Allocation (As Adjusted)
Cash and cash equivalents	$	9,459		$	—		$	9,459
Inventories	129,062			(7,779		)	121,283
Accounts receivable and other receivables	30,710			174			30,884
Prepaid expenses and other current assets	359			617			976

Total current assets	169,590			(6,988		)	162,602
Property and equipment	4,364			—			4,364
Identifiable intangible assets	836,044			5,501			841,545
Noncurrent deferred tax asset	401			11,448			11,849
Other assets	862			—			862

Total identifiable assets acquired	1,011,261			9,961			1,021,222
Accounts payable	(364		)	—			(364		)
Accrued expenses and other current liabilities	(7,746		)	(1,678		)	(9,424		)
Pension and deferred compensation	(712		)	74			(638		)
Deferred tax liability	(14,772		)	—			(14,772		)
Other liabilities	(1,033		)	1,033			—
Accrued liabilities — noncurrent	(1,823		)	—			(1,823		)

Net identifiable assets acquired	984,811			9,390			994,201
Goodwill	41,555			14,451			56,006

Total purchase price	$	1,026,366		$	23,841		$	1,050,207

Schedule of identifiable intangible assets acquired and useful lives

The values (in thousands) allocated to identifiable intangible assets and their estimated useful lives are as follows:

(in thousands, except useful life data)	Fair Value		Useful life
Software	$	45	4 years
Developed technology	757,000		12 to 22 years
Customer relationships	8,000		24 years
In-process research and development	39,000		Indefinite Life
Service provider network	2,000		Indefinite Life
Trade name	35,500		Indefinite Life

Total intangible assets	$	841,545

Weighted average life of definite-lived intangible assets			19.7

Schedule of proforma consolidated financial information

The unaudited pro forma consolidated financial information has been prepared using the acquisition method of accounting in accordance with U.S. GAAP (in thousands):

	(Unaudited) (in thousands)
	Year Ended December 31, 2015 (pro forma)			Year Ended December 31, 2014 (pro forma)
Net sales	$	162,596		$	178,508
Net loss(1)	$	(19,756	)	$	(21,435	)

(1) Net loss in 2015 excludes the inventory step-up adjustment of $73.1 million and the mark-to-market adjustment on contingent consideration of $23.7 million.