Note 4—Acquisitions

Hawaii Refinery Expansion

On August 29, 2018, following the announcement by IES Downstream, LLC’s (“IES”) that it was ceasing refining operations in Hawaii, we entered into a Topping Unit Purchase Agreement with IES to purchase certain of IES’s refining units and related assets in addition to certain hydrocarbon and non-hydrocarbon inventory (collectively, the “Hawaii Refinery Expansion”). On December 19, 2018, we completed the asset purchase for total consideration of approximately $66.9 million, net of a $4.3 million receivable related to net working capital adjustments. The purchase price consisted of $47.6 million in cash and approximately 1.1 million shares of our common stock valued with a fair value of $19.3 million.

We accounted for the Hawaii Refinery Expansion as an asset acquisition whereby the purchase price was allocated entirely to the assets acquired. Of the total purchase price of $66.9 million, $45.2 million was allocated to property, plant, and equipment, $4.3 million to non-hydrocarbon inventory, and $17.4 million to hydrocarbon inventory. With the completion of the Hawaii Refinery Expansion, the Hawaii refinery now has two facility locations that are approximately two miles from one another: Par East, our legacy refinery assets, and Par West, the recently-acquired assets.

We incurred $5.7 million of acquisition costs related to the Hawaii Refinery Expansion for the year ended December 31, 2018. These costs are included in Acquisition and integration costs on our condensed consolidated statement of operations.

Northwest Retail Acquisition

On January 9, 2018, we entered into an Asset Purchase Agreement with CHS, Inc. to acquire twenty-one (21) owned retail gasoline, convenience store facilities and twelve (12) leased retail gasoline, convenience store facilities, all at various locations in Washington and Idaho (collectively, “Northwest Retail”). On March 23, 2018, we completed the acquisition for cash consideration of approximately $74.5 million (the “Northwest Retail Acquisition”).

As part of the Northwest Retail Acquisition, Par and CHS, Inc. entered into a multi-year branded petroleum marketing agreement for the continued supply of Cenex®-branded refined products to the acquired Cenex® Zip Trip convenience stores. In addition, the parties also entered into a multi-year supply agreement pursuant to which Par supplies refined products to CHS, Inc. within the Rocky Mountain and Pacific Northwest markets.

We accounted for the acquisition of Northwest Retail as a business combination whereby the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. Goodwill recognized in the transaction was attributable to opportunities expected to arise from combining our operations with Northwest Retail and utilization of our net operating loss carryforwards, as well as intangible assets that do not qualify for separate recognition. Goodwill recognized as a result of the Northwest Retail Acquisition is expected to be deductible for income tax reporting purposes.

A summary of the fair value of the assets acquired and liabilities assumed is as follows (in thousands):



Cash	$	200
Inventories	4,138
Prepaid and other current assets	243
Property, plant, and equipment	30,230
Goodwill (1)	46,210
Accounts payable and other current liabilities	(759		)
Long-term capital lease obligations	(5,244		)
Other non-current liabilities	(487		)
Total	$	74,531

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(1) The total goodwill balance of $46.2 million was allocated to our retail segment.

As of December 31, 2018, we finalized the Northwest Retail Acquisition purchase price allocation. We incurred $0.6 million of acquisition costs related to the Northwest Retail Acquisition for the year ended December 31, 2018. These costs are included in Acquisition and integration costs on our condensed consolidated statement of operations.

Wyoming Refining Company Acquisition

On June 14, 2016, Par Wyoming, LLC, a wholly owned subsidiary of Par, entered into a unit purchase agreement (the “Purchase Agreement”) with Black Elk Refining, LLC to purchase all of the issued and outstanding units representing the membership interests in Hermes Consolidated, LLC (d/b/a Wyoming Refining Company) and, indirectly, Wyoming Refining Company’s wholly owned subsidiary, Wyoming Pipeline Company, LLC (collectively, “Wyoming Refining” or “WRC”) (the “WRC Acquisition”). Wyoming Refining owns and operates a refinery and related logistics assets in Newcastle, Wyoming.

On July 14, 2016, we completed the WRC Acquisition for cash consideration of $209.4 million, including a deposit of $5.0 million paid in June 2016, and assumed debt consisting of term loans of $58.0 million and revolving loans of $10.1 million. The consideration was paid with funds received from the issuance of our 2.50% convertible subordinated bridge notes (the “Bridge Notes”), cash on hand, which included the net proceeds from our June 2016 issuance and sale of an aggregate of $115 million principal amount of 5.00% convertible senior notes due 2021 (the “5.00% Convertible Senior Notes”), and the issuance of a $65 million secured term loan by Par Wyoming Holdings, LLC (the “Par Wyoming Holdings Credit Agreement”). Please read Note 12—Debt for further information on the 5.00% Convertible Senior Notes, the Bridge Notes, and the Par Wyoming Holdings Credit Agreement.

We accounted for the WRC Acquisition as a business combination whereby the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the date of the acquisition. Goodwill recognized in the transaction was attributable to opportunities expected to arise from combining our operations with Wyoming Refining and utilization of our net operating loss carryforwards, as well as other intangible assets that do not qualify for separate recognition. Goodwill recognized as a result of the WRC Acquisition is expected to be deductible for income tax reporting purposes.

During the three months ended June 30, 2017, the purchase price allocation was adjusted to record an increase of $2.0 million to our Wyoming refinery’s environmental liability as a result of additional information obtained by management regarding estimated remediation costs at certain locations. The purchase price allocation was also adjusted to record an increase to inventory of $0.5 million related to line fill inventory at our refined product pipelines. Goodwill increased $1.5 million as a result of these adjusting entries recorded during the three months ended June 30, 2017. As of June 30, 2017, we finalized the WRC Acquisition purchase price allocation.

A summary of the fair value of the assets acquired and liabilities assumed is as follows (in thousands):



Cash	$	183
Accounts receivable	16,880
Inventories	28,402
Prepaid and other assets	1,304
Property, plant, and equipment	254,367
Goodwill (1)	66,449
Accounts payable and other current liabilities	(57,861		)
Wyoming Refining Senior Secured Revolver	(10,100		)
Wyoming Refining Senior Secured Term Loan	(58,036		)
Other non-current liabilities	(32,222		)
Total	$	209,366

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(1) We allocated $39.8 million and $26.6 million of goodwill to our refining and logistics segments, respectively.

We incurred $0.7 million of acquisition costs related to the WRC Acquisition for the year ended December 31, 2016. These costs are included in acquisition and integration costs on our consolidated statement of operations.

The results of operations of Wyoming Refining were included in our results beginning July 14, 2016. For the year ended December 31, 2016, our results of operations included revenues of $174.6 million and net income of $0.7 million related to Wyoming Refining. The following unaudited pro forma financial information presents our consolidated revenues and net income (loss) as if the WRC Acquisition had been completed on January 1, 2015 (in thousands):



	Year Ended December 31,
	2016
Revenues	$	2,026,237
Net (loss)	(51,239		)

(Loss) per share
Basic	$	(1.21	)
Diluted	$	(1.21	)