Business combinations, dispositions and related transactions

12 Months Ended

Dec. 31, 2025

Business combinations, dispositions and related transactions

Business combinations, dispositions and related transactions

Note 3 – Business combinations, dispositions and related transactions:

Kronos Worldwide, Inc.

Acquisition of Remaining Joint Venture Interest in LPC –

Effective July 16, 2024 (“Acquisition Date”), Kronos acquired the 50% joint venture interest in LPC previously held by Venator Investments, Ltd. (“Venator”). Prior to the acquisition, Kronos held a 50% joint venture interest in LPC and LPC was operated as a manufacturing joint venture between Kronos and Venator. Kronos acquired the 50% joint venture interest in LPC for consideration of $185 million less a working capital adjustment and an additional earn-out payment of up to $15 million. The acquisition was financed through a borrowing of $132.1 million under Kronos’ Global Revolver and the remainder paid with cash on hand. In 2025, Kronos merged LPC into Kronos’ wholly-owned subsidiary Kronos Louisiana, Inc. (the combined company is referred to as “Kronos Louisiana”).

For financial reporting purposes, the assets acquired and liabilities assumed of LPC are included in our Consolidated Balance Sheets as of December 31, 2024 and December 31, 2025, and the results of operations and cash flows of LPC have been included in our Consolidated Statements of Operations and Cash flows beginning as of the Acquisition Date.  

Kronos remeasured its existing ownership interest in LPC to its estimated fair value at the Acquisition Date in accordance with ASC 805-10-25, for a business combination achieved in stages (because Kronos previously had an ownership interest in LPC). As a result of such remeasurement, we recognized a pre-tax gain of approximately $64.5 million in the third quarter of 2024, representing the difference between the $178.2 million estimated fair value of the existing ownership interest in LPC at the Acquisition Date and its aggregate $113.7 million carrying value at the Acquisition Date. Such pre-tax gain is disclosed as gain on remeasurement of investment in TiO₂ manufacturing joint venture and is included in cost and other expense (income) in our Consolidated Statement of Operations. The estimated fair value of the earn-out as of December 31, 2024 was $4.3 million and is included in noncurrent liabilities on the Consolidated Balance Sheet and is the line item captioned earn-out liability in Note 10. The earn-out liability is remeasured at fair value at each reporting date. During the third quarter of 2025, management determined that it was no longer probable the thresholds required to trigger payment of the earn-out would be achieved. As a result, the fair value of the earn-out liability was reduced to zero, resulting in the recognition of a non-cash gain of $4.6 million, which is disclosed as gain on remeasurement of earn-out liability in our Consolidated Statement of Operations.

The following table summarizes the aggregate fair value of the consideration transferred to gain control of LPC, the current estimate for the fair value of Kronos’ existing ownership interest in LPC and the amounts assigned to the identifiable assets acquired and liabilities assumed at the Acquisition Date. Our final purchase price allocation indicated below was based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using independent third-party appraiser valuation techniques including income, cost, and market approaches. The total consideration was allocated to the assets acquired and liabilities assumed, with the excess of the consideration over the estimated fair value of the net assets acquired recorded as goodwill. Such final purchase price allocation did not change from our previously-reported preliminary purchase price allocation.

Based on our analysis of the transaction at Acquisition Date, we recognized the following:

	Amount
	(In millions)
Consideration:
Cash consideration	$	185.0
Working capital adjustment		(11.0)
Earn-out liability		4.2
Total fair value of consideration		178.2
Fair value of investment in TiO2 manufacturing joint venture		178.2
Total	$	356.4
Allocation of purchase price to identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	21.3
Restricted cash		1.3
Accounts and other receivables, net		.2
Inventories, net		82.0
Prepaid expenses and other		.6
Other assets		10.7
Property and equipment		268.5
Accounts payable and accrued liabilities		(21.7)
Other noncurrent liabilities		(6.4)
Deferred tax liability		(2.7)
Total net identifiable assets acquired		353.8
Goodwill		2.6
Total	$	356.4

Property and equipment will be depreciated over useful lives of 5 years to 20 years. Goodwill is related to the benefits expected as a result of the acquisition, and of the $2.6 million recorded as goodwill, $.1 million is expected to be deductible for tax purposes.

Prior to the Acquisition Date, Kronos and Venator were both required to purchase one-half of the TiO₂ produced by LPC, unless Kronos and Venator agreed otherwise. Because Kronos operated LPC on a break-even basis, it reported no equity in earnings of LPC. Each owner’s acquisition transfer price for its share of the TiO₂ produced was equal to its share of the joint venture’s production costs and interest expense, if any. Kronos’ share of net cost was reported as cost of sales as the related TiO₂ acquired from LPC was sold. Kronos reported distributions it received from LPC, which generally related to excess cash generated by LPC from its non-cash production costs, and contributions Kronos made to LPC, which generally related to cash required by LPC when it built working capital, as part of its cash flows from operating activities in our Consolidated Statements of Cash Flows. The components of our net cash distributions from (contributions to) LPC are shown in the table below.

	Years ended December 31,
	2023		2024 (1)		2025
	(In millions)
Distributions from LPC	$	52.8	$	31.2	$	—
Contributions to LPC		(49.7)		(33.9)		—
Net distributions (contributions)	$	3.1	$	(2.7)	$	—

(1)Reflects distributions and contributions from/to LPC prior to the Acquisition Date.

Other –

Kronos

Kronos’ board of directors has previously authorized the repurchase of up to 2.0 million shares of its common stock in open market transactions, including block purchases, or in privately-negotiated transactions at unspecified prices and over an unspecified period of time. Kronos may repurchase its common stock from time to time as market conditions permit. The stock repurchase program does not include specific price targets or timetables and may be suspended at any time. Depending on market conditions, Kronos may terminate the program prior to its completion. Kronos uses cash on hand or other sources of liquidity to acquire the shares. Repurchased shares are added to Kronos’ treasury shares and subsequently cancelled upon approval of the Kronos board of directors. In 2023, Kronos acquired 313,814 shares of its common stock in market transactions for an aggregate purchase price of $2.8 million. Kronos made no treasury purchases in 2024 or 2025. At December 31, 2025, 1,017,518 shares are available for repurchase under this stock repurchase program.

CompX

CompX’s board of directors has previously authorized various repurchases of its Class A common stock in open market transactions, including block purchases, or in privately-negotiated transactions at unspecified prices and over an unspecified period of time. CompX may repurchase its common stock from time to time as market conditions permit. The stock repurchase program does not include specific price targets or timetables and may be suspended at any time. Depending on market conditions, CompX may terminate the program prior to its completion. CompX would generally use cash on hand to acquire the shares. Repurchased shares will be added to CompX’s treasury and cancelled. CompX did not repurchase any shares of its common stock during 2023, 2024 and 2025. At December 31, 2025, 523,647 shares were available for purchase under these authorizations.

BMI

Prior to 2023, BMI’s wholly-owned subsidiary, BWC, declared bankruptcy and was deconsolidated from our financial statements. In July 2024, the Court approved the closure of the bankruptcy case. Following the case closure, BWC and its wholly owned subsidiary, BWC SPE I, LLC, were dissolved. Remaining cash of approximately $2.6 million held by BWC was distributed to BMI.

On December 1, 2023, BMI sold its subsidiary Basic Power Company (“BPC”), which provided electricity to four customers located in the industrial park, and its sewer system assets to another of its industrial customers. The sale was for minimal cash consideration and the assumption of liabilities, and upon the closing of the sale we recognized a loss of $2.6 million. BMI provided transition services to the purchaser of the businesses for a limited time. With the sale of BPC and the completion of the bankruptcy, we no longer provide services to the industrial park which allows us to focus on land sales and development activity for the residential/planned community.