BUSINESS COMBINATIONS

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

2016 Acquisitions

During the first six months of 2016, the Company acquired (i) an oil re-refinery facility located in Nevada from Vertex Energy, Inc. and (ii) a blending and packaging company with operations located in New Orleans and Toronto, Canada.The combined purchase price for the two acquisitions was approximately $59.0 million in cash, subject to customary post-closing adjustments. The acquisitions expand the Company's re-refinery network and blending and packaging capabilities within its Kleen Performance Products segment. The combined amount of revenue from the acquisitions included in the Company's results of operations for each of the three and six months ended June 30, 2016 was approximately $12.1 million, respectively. During the three and six months ended June 30, 2016, the Company incurred acquisition-related costs of approximately $0.4 million and $0.5 million, respectively, in connection with the transactions which are included in selling, general and administrative expenses in the consolidated statements of income.Results of the acquired companies or assets are included within the Kleen Performance Products segment.

The allocation of the purchase price was based on preliminary estimates of the fair value of assets acquired and liabilities assumed as of the acquisition dates. Given the recent timing of these transactions the Company is continuing to obtain information to complete its valuation of these accounts and the associated tax accounting. The components and preliminary allocation of the purchase price consist of the following amounts (in thousands):

	At Acquisition Dates			Measurement Period Adjustments			At Acquisition Dates As Reported June 30, 2016
Accounts receivable	$	9,186		$	—		$	9,186
Inventories and supplies	9,431			—			9,431
Prepaid and other current assets	433			—			433
Property, plant and equipment	45,781			(1,477		)	44,304
Permits and other intangibles	1,205			900			2,105
Current liabilities	(7,119		)	—			(7,119		)
Deferred taxes, unrecognized tax benefits and other long-term liabilities	(548		)	—			(548		)
Total identifiable net assets	58,369			(577		)	57,792
Goodwill	620			577			1,197
Total	$	58,989		$	—		$	58,989

Pro forma revenue and earnings amounts on a combined basis as if these acquisitions had been completed on January 1, 2015 are immaterial to the consolidated financial statements of the Company since that date.

2015 Acquisitions

Thermo Fluids Inc.

On April 11, 2015, the Company completed the acquisition of Heckmann Environmental Services, Inc. (“HES”) and Thermo Fluids Inc. (“TFI”), a wholly-owned subsidiary of HES. The acquisition was accomplished through a purchase by Safety-Kleen, Inc., a wholly-owned subsidiary of the Company, of all of the issued and outstanding shares of HES from Nuverra Environmental Solutions, Inc. HES is a holding company that does not conduct any operations. TFI provides environmental services, including used oil recycling, used oil filter recycling, antifreeze products, parts washers and solvent recycling, and industrial waste management services, including vacuum services, remediation, lab pack and hazardous waste management. The Company acquired TFI for a purchase price of $79.3 million. The acquisition was financed with cash on hand and expands the Company’s environmental services customer base while also complimenting the SK Environmental Services network and presence in the western United States. Results of TFI since acquisition have been included within the SK Environmental Services segment.

The allocation of the purchase price was based on estimates of the fair value of assets acquired and liabilities assumed as of April 11, 2015. The Company believes that such information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The Company has finalized the purchase accounting for the acquisition of TFI.

The following table summarizes the recognized amounts of assets acquired and liabilities assumed at April 11, 2015 (in thousands):

	Preliminary Allocations			Measurement Period Adjustments			Final Allocations
Accounts receivable	$	7,109		$	192		$	7,301
Inventories and supplies	1,791			—			1,791
Prepaid and other current assets	1,749			(1,084		)	665
Property, plant and equipment	30,468			(2,827		)	27,641
Permits and other intangibles	20,000			(1,900		)	18,100
Current liabilities	(5,859		)	(25		)	(5,884		)
Closure and post-closure liabilities	(1,676		)	(657		)	(2,333		)
Deferred taxes, unrecognized tax benefits and other long-term liabilities	(13,081		)	3,907			(9,174		)
Total identifiable net assets	40,501			(2,394		)	38,107
Goodwill	36,591			4,638			41,229
Total	$	77,092		$	2,244		$	79,336

Pro forma revenue and earnings amounts on a combined basis as if TFI had been acquired on January 1, 2015 are immaterial to the consolidated financial statements of the Company since that date.

Other 2015 Acquisition

In December 2015, the Company acquired certain assets and assumed certain defined liabilities of a privately owned company for approximately $14.7 million in cash. That company specializes in the collection and recycling of used oil filters and was a service provider to the SK Environmental Services segment prior to the acquisition. The acquired assets have been integrated into the SK Environmental Services segment. In connection with this acquisition a preliminary goodwill amount of $7.4 million was recognized.