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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
Schedule of fair value of financial instruments measured at fair value on a recurring basis
The following table presents the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis as of December 31, 2017:
 
(in thousands)
Level 1
Level 2
Level 3
Total
Tax amortization benefit contingency(1)
—

—

43,382

43,382

Contingent consideration(2)
—

—

691

691

Interest rate contract (3)
—

456

—

456

Stock appreciation rights(4)
—

—

268

268

Phantom shares(5)
—

—

186

186

Total
$
—

$
456

$
44,527

$
44,983


The following table presents the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis as of December 31, 2016:

(in thousands)
Level 1
Level 2
Level 3
Total
Warrant consideration(6)
$
—

$
1,080

$
—

$
1,080

Tax amortization benefit contingency(1)
—

—

150,260

150,260

Deferred acquisition payment(7)
—

—

2,498

2,498

Stock appreciation rights(4)
—

—

22

22

Phantom shares(5)
—

—

4

4

Total
$
—

$
1,080

$
152,784

$
153,864


———————————————————————————————

(1)    
The fair value of the tax amortization benefit contingency is measured using an income approach based on the Company’s best estimate of the undiscounted cash payments to be made, with the current portion tax effected at 35.3% and the non-current portion tax effected at 21.5% due to the TCJA and discounted to present value utilizing an appropriate market discount rate. Per the April 4, 2017 Amendment Agreement, payments due to Dow under the Tax Receivable Agreement was reduced from 85% to 50% of the applicable tax savings realized by the Company. The valuation technique used did not change during the twelve months ended December 31, 2016 and December 31, 2017.
(2)
The fair value of the contingent consideration related to the Tecnidex acquisition.
(3)
The derivative assets and liabilities relate to an interest rate derivative that is measured at fair value using observable market inputs such as interest rates, our own credit risks as well as an evaluation of the counterpart's' credit risks.
(4)
The fair value of the stock appreciation right was measured using a Black Scholes pricing model during the twelve months ended December 31, 2016 and December 31, 2017.
(5)
The fair value of phantom shares are based on the fair value of the Company's common stock. The valuation technique used did not change during the twelve months ended December 31, 2016 and December 31, 2017.
(6)      
This liability relates to warrants to purchase the Company's common stock and future obligations to deliver additional warrants in relation to the Business Combination. The inputs used in the fair value measurement were directly observable quoted prices for identical assets in an inactive market.
(7)   
The fair value of the deferred acquisition payment is measured using a Black-Scholes option pricing model and based on the Company’s best estimate of the Company’s average Business EBITDA, as defined in the Purchase Agreement, over the two year period from January 1, 2016 to December 31, 2017. The valuation technique used did not change during the twelve months ended December 31, 2016 and December 31, 2017.
Schedule of changes in financial instruments measured at Level 3 fair value on a recurring basis
The following tables present the changes during the periods presented in our Level 3 financial instruments that are measured at fair value on a recurring basis. These instruments relate to contingent consideration payable to Dow in relation to the Business Combination.
 
(in thousands)
Tax amortization
benefit contingency
Contingent consideration related to acquisition
Deferred
acquisition payment
Interest rate contract (3)
Stock appreciation rights
Phantom shares
Total
Balance, December 31, 2016
$
150,260

 
$
2,498

 
$
22

$
4

$
152,784

Dow settlement
(86,931
)
 
—

 
—

—

(86,931
)
Accretion
8,432

 
—

 
—

—

8,432

TRA payment to Dow
(3,744
)
 
 
 
 
 
(3,744
)
Tecnidex acquisition
 
691

 
 
 
 
691

Interest rate contract
 
 
 
456

 
 
456

Stock compensation expense
—

 
—

 
246

182

428

Mark-to-market adjustment
(24,924
)
 
(2,498
)
 
—

—

(27,422
)
Balance, December 31, 2017
$
43,093

$
691

$
—

$
456

$
268

$
186

$
44,694