Mergers and Acquisitions

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Joint Venture Separation Agreement

On October 29, 2024, we entered into a JV Separation Agreement with INOAC with an effective date of November 5, 2024, in which INOAC acquired our 50% ownership shares of RIC, we acquired INOAC’s 50% ownership shares of RIS, and we sold the property, plant and equipment constituting RIS Production Line 1 to INOAC. The combined transaction resulted in a net payment to us from INOAC of $4.9 million. The definitive agreement terminated all other agreements previously entered into in connection with the RIC and RIS JV relationships.

In connection with the combined transactions, we recognized a gain of $7.7 million, which was recorded in “Other income (expense), net” line item in our consolidated statements of operations. This was comprised of a $2.6 million remeasurement gain on our previously owned 50% share of RIS, a $2.2 million gain on our disposition of our 50% ownership of RIC, as well as $1.4 million and $1.6 million reclassifications of historical cumulative translation adjustments for RIC and RIS, respectively, to pre-tax income, from accumulated other comprehensive income (loss). Our 50% ownership interests in RIS had estimated fair value of $5.5 million.

The acquisition of INOAC’s shares of RIS has been accounted for in accordance with applicable purchase accounting guidance. We recorded goodwill primarily related to the expected synergies from combining operations, which is not deductible for tax purposes.

The valuation methodology used to fair value our previously held equity investment in RIS was the discounted cash flow approach. Key inputs used in valuing RIS included projected future cash flows, a discount rate reflecting the cost of capital and cost of debt, and a terminal growth rate representing the asset's value beyond the explicit forecast period. The valuation methodology used to fair value the property, plant and equipment constituting RIS Production Line 1 was the indirect cost method of the cost approach. Key inputs used in valuing the property, plant and equipment constituting RIS Production Line 1 included the estimated replacement cost and the related physical depreciation, functional obsolescence, and economic obsolescence of the property, plant, and equipment.

If the JV Separation Agreement had been executed and effective January 1, 2023, the $7.7 million gain on the transactions would have been shifted from the fourth quarter of 2024 to the first quarter of 2023, with no other significant impacts.

As of the filing date of this Annual Report on Form 10-K, the purchase accounting and purchase price allocation for the RIS acquisition transaction are considered preliminary as we continue to refine our valuation of certain acquired assets and liabilities assumed. The following table represents the fair values assigned to the acquired assets and liabilities assumed in the transaction:


(Dollars in millions)	November 5, 2024
Assets
Cash and cash equivalents	$	4.5
Accounts receivable	1.1
Property, plant and equipment	3.3
Goodwill	5.0
Other assets	0.1
Total assets	14.0

Liabilities
Accounts payable	0.6
Other accrued liabilities	2.0
Deferred income taxes	0.4
Total liabilities	3.0

Fair value of net assets acquired	$	11.0

Terminated Merger Agreement with DuPont

On November 1, 2021, we entered into a definitive merger agreement to be acquired by DuPont de Nemours, Inc. in an all-cash transaction. Our shareholders approved the merger agreement at a special shareholder meeting held on January 25, 2022. Consummation of the merger was subject to various customary closing conditions, including regulatory approval by the State Administration for Market Regulation of China, and either party had the right to terminate the merger agreement if the merger had not closed on or before November 1, 2022. As of November 1, 2022, the parties had not received regulatory approval from State Administration for Market Regulation of China and on that date, DuPont de Nemours, Inc. issued a notice of termination of the merger agreement. Pursuant to the terms of the merger agreement, we received a regulatory termination fee in the amount of $162.5 million, before taxes, and incurred a transaction-related fee of $20.4 million.