Acquisitions |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Acquisitions | |
| Acquisitions |
5. Acquisitions Reeves County Asset Acquisition In the second quarter of 2025, we completed the purchase of five produced water handling facilities and approximately 787 acres of land (unaudited) in Reeves County, Texas from a third party (the “Reeves County Acquisition”) for total cash consideration of $13.2 million, inclusive of transaction costs, and subject to an additional $1.5 million indemnity holdback liability. This purchase was considered an asset acquisition, and the allocation of consideration conveyed consisted of $10.1 million to produced water handling facilities, which is recorded in “Property, Plant and Equipment,” $0.4 million allocated to a power contract, which is recorded in “Intangible Assets, Net,” $1.5 million related to an indemnity holdback liability, which is recorded in “Accrued and Other Current Liabilities” and $0.4 million related to an asset retirement obligation, which is recorded in “Asset Retirement Obligations” on the condensed consolidated balance sheet. At the time of purchase, we allocated $4.6 million to the 787 acres of land (unaudited) acquired. Concurrent with the purchase, we sold the land to a third party for $4.5 million and recorded a $0.1 million loss which is included in “Other Operating (Income) Expense, Net” in the condensed consolidated statements of operations and “Loss on Disposal of Assets, Net” in the condensed consolidated statements of cash flows. Crosstek Business Acquisition In February 2025, we acquired intellectual property rights, a skilled workforce and assets from Crosstek Membrane Technology LLC (“Crosstek”) (the “Crosstek Acquisition”) to help us accelerate our entry into broader industrial markets, including industrial water and wastewater treatment. Crosstek provides high recovery water treatment solutions for numerous water and wastewater markets. Crosstek operates across multiple states in the United States and develops projects which apply reverse osmosis technology for industrial customers to improve water recycling efficiency. Total consideration for the acquisition was $2.9 million, which consisted of $2.0 million in cash paid to the seller and a sales-based contingent consideration of up to $1.0 million to be paid over a four-year contractual period, which amount was discounted based on expected cash payments. The contingent consideration of $0.9 million is included in “Accrued and Other Current Liabilities.” We allocated $2.8 million of the purchase price to “Intangible Assets, Net,” which primarily consists of patents, processes and technologies, customer relationships and trademarks. The remaining $0.1 million of the purchase price was allocated to “Property, Plant and Equipment.” |