BUSINESS COMBINATIONS

3 Months Ended

Mar. 31, 2024

Business Combination and Asset Acquisition [Abstract]

2024 Acquisitions

On March 22, 2024, the Company completed its acquisition of Hepaco Blocker, Inc. and its subsidiaries (collectively, “HEPACO”) for an all-cash purchase price of $395.4 million, net of cash acquired and subject to final settlement of working capital balances. The operations of HEPACO expand the Environmental Services segment’s field services business.

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 22, 2024. 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 22, 2024
Accounts receivable, including unbilled receivables	$	68,496
Inventories and supplies	1,574
Prepaid expenses and other current assets	5,221
Property, plant and equipment	45,453
Permits and other intangibles	130,000
Operating lease right-of-use assets	9,385
Other long-term assets	2,660
Accrued expenses and other current liabilities	(43,966)
Current portion of operating lease liabilities	(2,758)
Operating lease liabilities, less current portion	(6,627)
Deferred tax liabilities	(8,916)
Other long-term liabilities	(374)
Total identifiable net assets	200,148
Goodwill	195,265
Total purchase price	$	395,413

Other intangible assets acquired include customer relationships and trademarks/tradenames and are anticipated to have estimated useful lives of between 10 and 20 years with a weighted average useful life of approximately 19 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 not deductible for tax purposes.

The operations included in the Company’s financial statements for the period ended March 31, 2024, and pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2023 are immaterial to the consolidated financial statements of the Company.

On March 1, 2024, the Company acquired a privately-owned business for an all-cash purchase price of $68.9 million, net of cash acquired and subject to the final settlement of working capital balances. The acquired company expands the SKSS segment’s oil collection operations in the southeastern region of the United States while also adding incremental production from the re-refinery owned and operated by the acquired company.

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 1, 2024. 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 1, 2024
Accounts receivable, including unbilled receivables	$	5,693
Inventories and supplies	6,817
Prepaid expenses and other current assets	423
Property, plant and equipment	38,914
Permits and other intangibles	20,200
Operating lease right-of-use assets	3,615
Other long-term assets	92
Accrued expenses and other current liabilities	(8,990)
Current portion of operating lease liabilities	(1,823)
Operating lease liabilities, less current portion	(1,792)


Total identifiable net assets	63,149
Goodwill	5,744
Total purchase price	$	68,893

Other intangible assets acquired include customer relationships and trademarks/tradenames and are anticipated to have estimated useful lives of between 7 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 and assembled workforce that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes.

2023 Acquisition

On March 31, 2023, the Company acquired Thompson Industrial Services, LLC (“Thompson Industrial”) for an all-cash purchase price of $110.9 million, net of cash acquired. The operations of Thompson Industrial expand the Environmental Services segment’s industrial service operations in the southeastern region of the United States.

The Company finalized the purchase accounting for this acquisition. The allocation of the purchase price was based on estimates of the fair value and assets acquired and liabilities assumed as of March 31, 2023. The following table summarizes the final determination and recognition of assets acquired and liabilities assumed (in thousands):


	At Acquisition Date As Reported December 31, 2023		Measurement Period Adjustments		Final Allocation At Acquisition Date As Reported March 31, 2024
Accounts receivable, including unbilled receivables	$	25,233	$	(73)	$	25,160
Inventories and supplies	228		—		228
Prepaid expenses and other current assets	1,302		—		1,302
Property, plant and equipment	26,719		—		26,719
Permits and other intangibles	28,900		—		28,900
Operating lease right-of-use assets	4,716		—		4,716
Other long-term assets	72		—		72
Accrued expenses and other current liabilities	(10,385)		(145)		(10,530)
Current portion of operating lease liabilities	(1,653)		—		(1,653)
Operating lease liabilities, less current portion	(3,063)		—		(3,063)

Other long-term liabilities	(560)		—		(560)
Total identifiable net assets	71,509		(218)		71,291
Goodwill	39,346		218		39,564
Total purchase price	$	110,855	$	—	$	110,855

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.