Note 4. Business Combination

On April 30, 2018, the Company completed the acquisition of Sivomatic Holding B.V. (“Sivomatic”), a leading European supplier of premium pet litter products. Sivomatic is a vertically integrated manufacturer, with production facilities in the Netherlands, Austria and Turkey. With a leading position in premier clumping products, Sivomatic’s product portfolio spans the range of pet litter derived from bentonite, sourced predominantly from wholly-owned mines in Turkey. The results of Sivomatic are included in our Performance Materials segment. The acquisition was financed through a combination of cash on hand and borrowings under the Company’s credit facilities. The fair value of the total consideration transferred, net of cash acquired, was $122.5 million.

The acquisition has been accounted for using the acquisition method of accounting, which requires, among other things, that we recognize the assets acquired and liabilities assumed at their respective fair values as of the acquisition date. As of March 31, 2019, the purchase price allocation remains preliminary as the Company completes its assessment of property, mineral rights, certain reserves including environmental, legal and tax matters, obligations, intangible assets, taxes payable, impact of foreign exchange and deferred taxes, as well as complete our review of Sivomatic’s existing accounting policies.

The following table summarizes the Company’s preliminary purchase price allocation for the Sivomatic acquisition as of March 31, 2019, as compared with the allocation previously reported on the Company's Form 10-K for the year ended December 31, 2018:

(millions of dollars)	Preliminary Allocation Previously Reported on Form 10-K as of December 31, 2018		Increase/ (Decrease)		Allocation as of March 31, 2019

Accounts receivable	$	24.4	$	—	$	24.4
Inventories		15.6		—		15.6
Other current assets		0.6		—		0.6
Mineral rights		39.7		—		39.7
Property, plant and equipment		28.3		—		28.3
Goodwill		35.0		—		35.0
Intangible assets		26.4		—		26.4
Total assets acquired		170.0		—		170.0
Current maturity of long-term debt		5.7		—		5.7
Accounts payable		9.0		—		9.0
Accrued expenses		5.6		—		5.6
Long-term debt		5.3		—		5.3
Non-current deferred tax liability		19.7		—		19.7
Other non-current liabilities		2.2		—		2.2
Total liabilities assumed		47.5		—		47.5
Net assets acquired	$	122.5	$	—	$	122.5

The Company used the income, market, or cost approach (or a combination thereof) for the preliminary valuation, and used valuation inputs and analyses that were based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. For certain items, the carrying value was determined to be a reasonable approximation of fair value based on the information available.

Goodwill was calculated as the excess of the consideration transferred over the assets acquired and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The allocation will be completed during the second quarter of 2019. Goodwill recognized as a result of this acquisition is not deductible for tax purposes.

In connection with the acquisition, the Company recorded an additional deferred tax liability of $18.8 million with a corresponding increase to goodwill. The increase in the deferred tax liability represents the tax effect of the difference between the estimated assigned fair value of the tangible and intangible assets and the tax basis of such assets.

Mineral rights were valued using discounted cash flow method. Property, plant and equipment were valued using the cost method adjusted for age and deterioration.

Intangible assets acquired mainly include tradenames and customer relationships. Both tradenames and customer relationships have an estimated useful life of approximately 20 years.

The Company did not present pro forma and other financial information for the Sivomatic acquisition, as this is not considered to be a material business combination.