BUSINESS COMBINATION

3 Months Ended

Mar. 31, 2022

On February 22, 2022, the Company consummated the previously announced business combination transactions contemplated by the Contribution Agreement, dated as of October 21, 2021. Pursuant to the Contribution Agreement, in connection with the Closing, (i) Contributor contributed all of the equity interests of the Contributed Entities to the Partnership; and (ii) in exchange for such contribution, the Partnership issued 50,000,000 common units representing limited partner interests in the Partnership and the Company issued 50,000,000 shares of the Company’s Class C common stock, par value $0.0001 per share, to Contributor. Please refer to the “Transaction” discussed above.

The Transaction was accounted for as a business combination in accordance with ASC 805, among other things, requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. The Company also adopted ASU 2021-08, effective as of January 1, 2022, to record contract liabilities at their carrying value as of the acquisition date. Although the Company was the legal acquirer, BCP and BCP GP were determined to be the accounting acquirer and legal acquiree. As a result, BCP and its subsidiaries’ net assets were carried at historical value, acquired net assets were measured at fair value except contract liabilities being recorded at carrying value at the acquisition date, and results of operations of ALTM and its subsidiaries were included in the Company’s Condensed Consolidated Financial Statements from the Closing Date going forward.

The preliminary purchase price allocation is based on an assessment of the fair value of the assets acquired and liabilities assumed in the acquisition using inputs that are not observable in the market and thus level 3 inputs. The fair value of the processing plant, gathering system and related facilities and equipment are based on market and cost approaches. The goodwill of $3.9 million relates to operational synergies. The value of the Preferred Units and assumed contingent liability was determined through a probability-weighted analysis of the expected future cash flows and other applicable valuation techniques. See additional details for Preferred Units in Note 11—Series A Cumulative Redeemable Preferred Units and contingent liabilities in Note 8 —Commitments and Contingencies in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q. Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, valuation of the underlying assets of the equity method investments and liabilities assumed. However, the Company is continuing its review of these matters during the measurement period, and if new information obtained about facts and circumstances that existed at the acquisition date identifies adjustments to the liabilities initially recognized, as well as any additional liabilities that existed at the acquisition date, the acquisition accounting will be revised to reflect the resulting adjustments to the provisional amounts initially recognized. The Company will finalize the purchase price allocation during the 12-month period following the acquisition date.

The following table summarizes the preliminary estimated fair value of assets acquired and liabilities assumed in the Transaction in accordance with ASC 805:


(In thousands)	Amount
Cash and cash equivalent	$	13,401
Accounts receivable	1,341
Accounts receivable - affiliates	15,681



Property, plant, and equipment, net	634,923
Intangible assets, net	13,200
Investments in unconsolidated affiliates	1,755,000
Prepaid expense and other assets	8,225
Goodwill	3,894
Total assets acquired	2,445,665

Accrued expenses and other accrued liabilities	4,923
Long-term debt	657,000
Embedded derivative liabilities	89,050
Contract liabilities	9,102
Mandatory redeemable Preferred Units	200,667

Deferred tax liabilities	4,010
Contingent liabilities	4,451
Total liabilities assumed	969,203

Redeemable noncontrolling interest - Preferred Unit limited partners	462,717

Total consideration transferred	$	1,013,745

The Company incurred acquisition-related costs of $5.7 million for the three months ended March 31, 2022. During the quarter ended March 31, 2022, the Company assumed additional revolver liabilities through the Transaction. There was no significant modification to the Company’s debt structure.

Supplemental Pro Forma Information

The unaudited supplemental pro forma financial for informational purposes only and is not indicative of future results. The results below for the three months ended March 31, 2022 and 2021 combine the results of the Company and the Partnership, giving effect to the Transaction as if it had been completed on January 1, 2021.


	Three Months Ended March 31,
	2022		2021
(In thousands)	Pro forma		Pro forma
Revenues	$	284,102	$	182,249
Net income including noncontrolling interest	$	13,468	$	16,802

Given the assumed pro forma transaction date of January 1, 2021, we removed $18.7 million of acquisition-related expenses for the three months ended March 31, 2022 and recognized $29.0 million of total acquisition-related expenses for the three months ended March 31, 2021.