Related Party Transactions |
6 Months Ended |
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Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions GTCR, LLC and MLSH 1 Prior to the IPO, GTCR, LLC (“GTCR”), MLSH 1’s majority owner, provided subsidiaries of the Company with financial and management consulting services through an advisory services agreement. The advisory services agreement provided that the Company pay a $0.1 million quarterly management fee to GTCR. The advisory services agreement was terminated in connection with the IPO. The Company incurred approximately $0.1 million and $0.3 million in management fees to GTCR for the three and six months ended June 30, 2020, respectively. The Company also reimbursed GTCR for out-of-pocket expenses incurred while providing the above professional services. The Company incurred approximately $0.1 million and $0.2 million in out-of-pocket expenses to GTCR during the three and six months ended June 30, 2020, respectively. The Company did not incur any out-of-pocket expenses to GTCR during the three and six months ended June 30, 2021. During the three and six months ended June 30, 2021, the Company made distributions of $33.1 million and $56.2 million, respectively, for tax liabilities to MLSH 1. Legacy Owners of Cygnus The non-controlling interests in MLSC represent equity interest that was retained by the shareholders of the MLSC entity prior to its acquisition by the Company. The President of Cygnus and his affiliated entity were the owners of the non-controlling interests. In September 2020, Topco LLC and MLSH 1 entered into a Sale and Rollover Agreement with the President of Cygnus and his affiliated entity to purchase certain MLSC Class B preferred units and common units as well as exchange the remaining MLSC Class B preferred units and common units for a variable number of MLSH 1 common units. As a result of this transaction, the President of Cygnus and his affiliated entity no longer held a non-controlling interest in MLSC upon the exchange of MLSH 1 common units for the remaining MLSC Class B preferred and common units which occurred in November 2020. The Company leases the Southport Facility, which through the date of the Organizational Transactions was owned by an entity controlled by a close relative of the President of one of its subsidiaries. The President of this subsidiary also personally financed a loan to this entity, which was used to acquire the property leased by the Company. For the three and six months ended June 30, 2020, the Company paid less than $0.1 million and approximately $0.1 million, respectively, in lease payments for the lease facility. Payable to Related Parties Pursuant to a Tax Receivable Agreement We are a party to the TRA with MLSH 1 and MLSH 2. The TRA provides for the payment by us to MLSH 1 and MLSH 2, collectively, of 85% of the amount of tax benefits, if any, that we actually realize, or in some circumstances are deemed to realize, as a result of the Organizational Transactions, IPO, and any subsequent exchanges of LLC Units. Based on our current projections of taxable income, and before deduction of any specially allocated depreciation and amortization, we anticipate having enough taxable income to utilize most of these tax benefits. As of June 30, 2021, our liability under the TRA is $521.4 million payable to MLSH 1 and MLSH 2, representing approximately 85% of the calculated tax savings we anticipate being able to utilize in future years. For the three months ended March 31, 2021, our liability under the TRA was $383.7 million. During the first quarter of 2021, the Company recognized a gain of $5.9 million on TRA liability adjustment reflecting a change in the tax benefit obligation attributable to a change in the expected tax benefit. The remeasurement was primarily due to changes in our estimated state apportionment and the corresponding reduction of our estimated state tax rate. During the second quarter of 2021, our liability under the TRA increased by $137.7 million as a result of the Secondary Offering in April 2021. During the three and six months ended June 30, 2021, no payments were made to MLSH 1 or MLSH 2 pursuant to the TRA and $1.3 million of the liability has been reclassified as short-term liability.
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