Allkem Livent Merger

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

On January 4, 2024 (the "Acquisition Date") Arcadium completed the previously announced Allkem Livent Merger by and among Livent Corporation, a Delaware corporation ("Livent"), Allkem Limited, an Australian public company ("Allkem"),

Arcadium Lithium plc, a public limited company incorporated under the laws of the Bailiwick of Jersey ("Arcadium"), Lightning-A Merger Sub, Inc. ("Merger Sub"), and Arcadium Lithium Intermediate IRL Limited, a private company limited by shares and incorporated and registered in Ireland ("Irish IntermediateCo").

The transaction was consummated by way of (a) a scheme of arrangement under Australian law, pursuant to which each issued, fully paid ordinary share of Allkem held by Allkem shareholders was exchanged for either one Arcadium Lithium CHESS Depositary Instrument (a "CDI") quoted on the Australian Stock Exchange (each CDI representing a beneficial ownership interest in one Arcadium ordinary share), or one Arcadium ordinary share (par value $1.00 per share) and (b) a merger, whereby Merger Sub, a wholly owned subsidiary of Irish IntermediateCo (a direct wholly owned subsidiary of Arcadium) merged with and into Livent, with Livent as the surviving entity. Each share of Livent common stock, par value $0.001 per share (each, a "Livent Share"), was converted into the right to receive 2.406 Arcadium ordinary shares.

Pursuant to the Allkem Livent Merger, 433,156,855 Arcadium ordinary shares (including 96,909 related to accelerated PRSU awards) were issued to former Livent stockholders and 641,337,840 Arcadium ordinary shares (comprising 98,725,616 Arcadium ordinary shares and 542,612,224 CDIs in respect of Arcadium ordinary shares) were issued to former Allkem shareholders. The Acquisition Date fair value of consideration transferred consisted of the following:


(in millions)	Amount
Consideration:
Fair value of Arcadium ordinary shares issued to Allkem shareholders	$	4,385.6
Fair value of converted Allkem performance rights attributable to pre-combination service	4.8
Total consideration	$	4,390.4

The Allkem Livent Merger meets the criteria to be accounted for as a business combination and is accounted for using the acquisition method of accounting with Livent being treated as the accounting acquirer. Under the acquisition method of accounting, the assets and liabilities of Allkem and its subsidiaries are recorded at their respective fair values as of the date of completion of the Allkem Livent Merger and the difference between the fair value of the consideration paid for the acquired entity and fair value of the net assets acquired is recorded as goodwill.

Determining the fair value of the assets and liabilities of Allkem requires judgment and certain assumptions to be made, the most significant of these being related to the valuation of Allkem's mining properties and rights.

During the year ended December 31, 2024, adjustments were made within the permitted measurement period for the following: a decrease to property, plant and equipment of $46.6 million, increase to deferred income tax assets of $4.6 million, increase to accounts payable trade and other of $1.8 million, decrease to income taxes of $0.3 million, decrease to environmental liabilities of $7.0 million, decrease to deferred income tax liabilities of $49.3 million, increase to other long term liabilities of $8.7 million, and a net increase in goodwill of $54.5 million. The measurement period adjustments have been reflected as current period adjustments in the year ended December 31, 2024, in accordance with the guidance in ASU 2015-16 "Business Combinations." The measurement period adjustments had no effect on earnings or cash in the current period.

Transaction and related costs directly attributable to the acquisition of Allkem, consisting primarily of advisor fees, legal fees, accounting fees, and certain deal related bonuses were $103.9 million for the year ended December 31, 2024. The costs were expensed as incurred and are included in restructuring and other charges.

The following table summarizes the purchase price allocation for the Allkem Livent Merger as of January 4, 2024:


(in Millions, except per share amounts)	Amount

Total consideration	$	4,390.4

Assets acquired:
Cash and cash equivalents	$	681.4
Trade receivables	64.2
Inventories	127.6
Prepaid and other current assets	87.2

Property, plant and equipment	4,278.9

Right of use assets - operating leases, net	53.4
Deferred income tax assets	30.9
Other assets (1)	174.0
Total assets acquired	$	5,497.6

Liabilities assumed:

Accounts payable, trade and other	$	223.7
Accrued and other current liabilities	35.1

Income taxes	78.5
Long-term debt including current portion	301.7
Operating lease liabilities	53.4
Environmental liabilities	11.9
Deferred income tax liabilities	1,267.4
Other long-term liabilities	58.2
Total liabilities assumed	$	2,029.9

Fair value of net assets acquired	$	3,467.7
Add: Fair value of noncontrolling interests acquired	321.0
Fair value of net assets acquired less noncontrolling interests acquired	$	3,146.7
Goodwill	$	1,243.7

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1.Includes long-term semi-finished goods inventory.

Trade receivables

The $64.2 million of acquired trade receivables represents the fair value of the gross amount due under the contracts.

Property, Plant and Equipment

Property, plant and equipment is inclusive of the fair value of mineral rights totaling $2,675.0 million and non-mineral rights property, plant and equipment totaling $1,603.9 million. The fair value of the mineral rights was estimated using the multi-period excess earnings method. The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the asset, net of charges for the use of other identifiable assets of the business including working capital, fixed assets, and other intangible assets. Mineral rights are depreciated using a units-of-production method while all other property, plant and equipment is depreciated using the straight-line method.

Goodwill

Goodwill from acquisitions represents the excess of the purchase price over the fair value of net assets acquired. The amount disclosed within the table is attributable to the value of growth opportunities and expected synergies created by incorporating Allkem's business and operations into the Company's operations and the value of the assembled workforce. The goodwill has no amortizable basis for income tax purposes.

Allkem revenues and earnings

The following table represents Allkem's revenues and net earnings included in Arcadium's consolidated statements of operations from the Acquisition Date through December 31, 2024.


(in Millions)	Twelve Months Ended December 31, 2024

Revenue	$	337.5
Income from operations before income taxes	$	115.3

Pro Forma Financial Information

Due to the Allkem Livent Merger closing on January 4, 2024, all activity in the first quarter of 2024 except for the first three days of January, which management deemed not material, is included in Arcadium’s consolidated statements of operations. The following unaudited pro forma financial information for the twelve months ended December 31, 2023 is based on our historical consolidated financial statements adjusted to reflect the Allkem Livent Merger as if it occurred on January 1, 2023. The unaudited pro forma financial information is not necessarily indicative of what would have occurred if the Allkem Livent Merger had been completed as of the beginning of the periods presented, nor is it indicative of future results. The unaudited pro forma information is not necessarily indicative of operating results that would have been achieved had the acquisition been completed as of January 1, 2023 and does not intend to project the future financial results of the Company after the acquisition. The unaudited pro forma information is based on certain assumptions, which management believes are reasonable, and does not reflect the cost of any integration activities or synergies that may be derived from any integration activities. The unaudited pro forma financial results are as follows:


(in Millions)	Twelve Months Ended December 31, 2023
	(Unaudited)
Revenue	$	2,001.7
Net income	$	374.0