Merger Transaction, Acquisitions, and Dispositions (Tables)

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of Acquisition Date Fair Value of Consideration Transferred

The acquisition-date fair value of the consideration transferred consisted of the following:

(in thousands)
Equity consideration	$	1,263,931
Replacement awards attributable to pre-combination services(1)	43,964
Unfavorable supply agreement(2)	46,000
Favorable supply agreement(2)	(59,000)
Fair value of consideration transferred	$	1,294,895

_______________________

(1) Represents the fair value of the replacement equity awards to the extent services were provided by employees of Chemical Technologies prior to closing. See Note 13—Equity and Cash Incentive Programs for additional information about the replacement equity awards.

(2) As part of the Merger, the Company entered into a Cross Supply and Product Transfer Agreement with Ecolab in which over a period of approximately three years from the merger date, certain products will be manufactured by one party for the other. The cross selling prices in which each party will transfer their products, and include a take-or-pay element, have been set forth within this agreement and are not reflective of market terms. As a result, we recognized an intangible asset recorded at fair value for the favorable terms and a liability recorded at fair value for the unfavorable terms. The intangible asset will be amortized on a straight-line basis over a three-year period into cost of goods and services and the liability will be amortized as a component of product revenue.

Schedule of Fair Value of Assets Acquired

The following table provides the final allocation of the purchase price as of the acquisition date.

(in thousands)
Cash and cash equivalents	$	57,588
Receivables	394,432
Inventories	340,000
Prepaid expenses and other current assets	63,576
Property, plant, and equipment	687,085
Identifiable intangible assets(1)	290,000
Other non-current assets	156,427
Total identifiable assets acquired	1,989,108
Accounts payable	184,028
Other current liabilities(1)	172,997
Long-term debt (2)	537,000
Deferred tax liabilities	103,956
Other liabilities(1)	98,970
Total liabilities assumed	1,096,951
Net identifiable assets acquired	892,157
Add: Negative fair value of non-controlling interests	16,052
Goodwill	386,686
Total net assets acquired	$	1,294,895

_______________________

(1) The fair value of the consideration transferred related to the favorable and unfavorable terms of the cross supply agreement has been excluded.

(2) In connection with the Merger, we assumed a term loan from Chemical Technologies, of which approximately $26.9 million has been classified as short-term representing the mandatory amortization payments due within the next twelve months. See Note 8—Debt for further information.

Schedule of Non-recurring Pro Forma Adjustments

	Years Ended December 31,
(in thousands)	2020		2019
Revenues	$	2,775,027	$	3,456,354
Net income (loss) attributable to ChampionX	(777,553)		229,126