During the years ended December 31, 2020 and 2019, SJI completed several acquisitions and business combinations as described below. In each case, the amount of revenues and net income included in the Company’s consolidated statements of income for the year of the acquisition (or the following year) was not material. For the transactions that have been accounted for as business combinations, our results would not have been materiality different for the periods presented prior to the acquisitions if the acquisitions had occurred at the beginning of the periods presented herein. In addition, the amounts of acquisition-related costs were not material for these transactions.

On August 12, 2020, SJI, through its wholly-owned subsidiary Marina, formed the Catamaran joint venture with a third party partner. Catamaran was formed for the purpose of developing, owning and operating renewable energy projects, and will support SJI's commitment to clean energy initiatives. On the same date, Catamaran purchased 100% ownership in Annadale, an entity that owns two fuel cell projects totaling 7.5 MW in Staten Island, New York. Construction was completed after the acquisition and these fuel cell projects became operational in December 2020. Marina has a 93% ownership interest in Annadale, and Marina fully consolidates the entity as Marina directs the activities of the entity that most significantly impact the entity’s economic performance.

ASC 805, Business Combinations, states that a business is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or other economic benefits directly to investors or other owners, members, or participants. As the acquisition of Annadale did not meet the definition of a business combination under ASC 805, the Company accounted for the transaction as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather any excess consideration transferred over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets. The acquisition of Annadale included a land lease (see Note 9) and working capital.

Marina invested $80.2 million in Annadale as part of this $86.2 million acquisition, with the remaining $6.0 million being contributed by the noncontrolling minority interest owner, which is recorded as Noncontrolling Interest within Total Equity on the consolidated balance sheets as of December 31, 2020. The acquisition was primarily comprised of $80.6 million in Nonutility Property, Plant & Equipment, $23.9 million in Cash and Cash Equivalents, and $4.3 million in Other Noncurrent Assets, partially offset by $21.2 million in Accounts Payable and Other Current & Noncurrent Liabilities. The major depreciable assets of Annadale are the fuel cell modules, which will be depreciated over their estimated useful lives of 35 years (see Note 1). The land lease is being amortized over the lease term of 35 years (see Note 9).

On August 7, 2020, SJI, through its wholly-owned subsidiary SJEI, completed its acquisition of the remaining 75% of EnerConnex for total consideration of $7.5 million. This acquisition supports the Company's initiative to expand its energy consulting business. EnerConnex does not have any regulated operations.

The acquisition of EnerConnex was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805. Under the acquisition method of accounting, the total estimated purchase price of an acquisition is allocated to the net assets based on their estimated fair values.

Prior to this transaction, SJEI previously had a 25% investment in EnerConnex that was accounted for under the equity method of accounting. As this was a business combination achieved in stages, an approximately $2.0 million (pre-tax) gain was recorded as a result of remeasuring the carrying value of the previously held equity interest in EnerConnex to its acquisition date fair value. This gain was recorded in Other Income on the consolidated statements of income. The acquisition date fair value of the previously held equity interest was $2.5 million and was determined based on the cash consideration exchanged for the remaining 75% of EnerConnex. The total of the $7.5 million in cash consideration for the remaining 75%, the $2.5 million acquisition date fair value of the previously held interest, and $0.2 million in assumed liabilities served as the total allocable basis shown in the preliminary purchase price allocation below.

The Company has not finalized its valuation of certain assets and liabilities in connection with the acquisition of EnerConnex. As such, the estimated measurements recorded to date are subject to change. Any changes will be recorded as adjustments to the fair value of those assets and liabilities and residual amounts will be allocated to goodwill. The final valuation adjustments may also require adjustment to the consolidated statements of operations and cash flows. The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date.


(in thousands)	EnerConnex
Cash	$	415
Accounts Receivable	249
Identifiable Intangible Assets (A)	4,500
Goodwill	4,890
Other Noncurrent Assets	100
Total assets acquired	10,154
Accounts Payable	4
Other Current Liabilities	150
Total liabilities assumed	154
Total net assets acquired	$	10,000

(A) The identifiable intangible asset balances shown in the table above are related to customer relationships acquired in the transaction, and are included in Other Noncurrent Assets on the consolidated balance sheets. See Note 21.

SJI, through its wholly-owned subsidiary Marina, completed its acquisition of three LLCs on June 30, 2020, and acquired a fourth LLC on August 21, 2020. These entities own newly operational rooftop solar-generation sites located in New Jersey, and were acquired for $3.8 million in total consideration. The total purchase price equaled the fair value of property, plant, and equipment that were acquired in the transactions. Costs related to these acquisitions were not material. The purchase of these entities is in support of the New Jersey Energy Master Plan.

On December 23, 2020, SJI completed its asset acquisition of renewable natural gas development rights in certain dairy farms, previously owned by REV LNG, for total consideration of $10.0 million. The development rights are associated with dairy farms that will be developed as RNG projects. This acquisition is consistent with SJI's commitment to decarbonization, as REV LNG specializes in the development, production and transportation of renewable natural gas, liquified natural gas and compressed natural gas. Among its service offerings, REV LNG acquires the rights to build anaerobic digesters on dairy farms to produce RNG for injection into natural gas pipelines. SJI's investment in REV LNG includes an interest in RNG projects, a developing pipeline of RNG projects, as well as certain energy infrastructure assets associated with transporting and supplying RNG to market.

On August 31, 2019, SJI, through its wholly-owned subsidiary SJEI, completed its acquisition of AEP for $4.0 million in total consideration, inclusive of certain working capital and other closing adjustments. AEP does not have any regulated operations.

The acquisition of AEP was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805. The total net assets acquired of $4.0 million is comprised of $2.4 million of intangibles (which are related to customer relationships - see Note 21), $1.8 million of goodwill and $(0.2) million of various working capital items. During 2020, the Company finalized its valuation of assets and liabilities in connection with the acquisition of AEP. There were no changes to the purchase price or the allocation during the measurement period.