BUSINESS COMBINATIONS

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

2023 Acquisition

On March 31, 2023, the Company acquired Thompson Industrial Services, LLC ("Thompson Industrial") for an all-cash purchase price of $111.9 million, net of cash acquired and subject to the final settlement of working capital. The operations of Thompson Industrial expand the Environmental Services segment's industrial service operations in the southeastern region of the United States.

The preliminary allocation of the purchase price is provisional and was based on estimates of the fair value of assets acquired and liabilities assumed as of March 31, 2023. The Company continues to obtain information to complete the valuation of these balances and the associated income tax accounting. Measurement period adjustments will reflect new information obtained about facts and circumstances that existed as of the acquisition date. The following table summarizes the preliminary determination and recognition of assets acquired and liabilities assumed (in thousands):


	At March 31, 2023
Accounts receivable	$	25,793
Inventories and supplies	233
Prepaid expenses and other current assets	1,150
Property, plant and equipment	28,030
Permits and other intangibles	28,100
Operating lease right-of-use assets	4,716
Other non-current assets	36
Current liabilities	(11,514)
Current portion of operating lease liabilities	(1,653)
Operating lease liabilities, less current portion	(3,063)


Total identifiable net assets	71,828
Goodwill	40,092
Total purchase price	$	111,920

Permits and other intangible assets acquired include customer relationships, trademarks/tradenames and non-compete agreements and are anticipated to have estimated useful lives of between five and 15 years with a weighted average useful life of approximately 13 years. The excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed, was recorded as goodwill. The goodwill recognized is attributable to the expected operating synergies, assembled workforce and growth potential that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes.

The operations included in the Company's financial statements for the period ended March 31, 2023, and pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2022 are immaterial to the consolidated financial statements of the Company.

2022 Acquisitions

On June 17, 2022, the Company acquired a privately-owned company for an all-cash purchase price of approximately $78.9 million, net of cash acquired. The operations of the newly acquired company expand the Safety-Kleen Sustainability Solutions segment's waste oil collection capabilities and re-refining business throughout the southeastern region of the United States, including the addition of a re-refinery in Georgia.

The preliminary allocation of the purchase price is provisional and was based on estimates of the fair value of assets acquired and liabilities assumed as of June 17, 2022. The Company continues to obtain information to complete the valuation of these balances and the associated income tax accounting. Measurement period adjustments will reflect new information obtained

about facts and circumstances that existed as of the acquisition date. The following table summarizes the preliminary determination and recognition of assets acquired and liabilities assumed (in thousands):


	At Acquisition Date As Reported December 31, 2022		Measurement Period Adjustments		At Acquisition Date As Reported March 31, 2023
Accounts receivable	$	1,111	$	(6)	$	1,105
Inventories and supplies	5,816		(71)		5,745
Prepaid expenses and other current assets	144		—		144
Property, plant and equipment	19,605		2,626		22,231
Permits and other intangibles	23,500		—		23,500
Operating lease right-of-use assets	585		—		585
Other non-current assets	13		—		13
Current liabilities	(3,271)		—		(3,271)
Current portion of operating lease liabilities	(186)		—		(186)
Operating lease liabilities, less current portion	(399)		—		(399)

Other long-term liabilities	(55)		(2,626)		(2,681)
Total identifiable net assets	46,863		(77)		46,786
Goodwill	32,015		77		32,092
Total purchase price	$	78,878	$	—	$	78,878

Permits and other intangible assets acquired include supplier relationships, permits, customer relationships and trademarks/tradenames and are anticipated to have estimated useful lives of between five and 20 years with a weighted average useful life of approximately 18 years. The excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired, was recorded as goodwill. The goodwill recognized is attributable to the expected operating synergies, assembled workforce and growth potential that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes.

On December 9, 2022, the Company acquired a privately-owned business for $12.6 million cash consideration. The acquired company expands the Safety-Kleen Sustainability Solutions segment's oil collection operations in the southeastern region of the United States. In connection with this acquisition, goodwill of $2.8 million was recognized. The results of operations for the acquired business were not material in 2022.