Business Acquisitions

12 Months Ended

Dec. 31, 2020

On October 1, 2019, The Andersons entered into an agreement with Marathon to merge TAAE, TACE, TAME and the Company's wholly-owned subsidiary, The Andersons Denison Ethanol LLC into a new legal entity, The Andersons Marathon Holdings LLC. As a result of the merger, The Andersons and Marathon now own 50.1% and 49.9% of the equity in TAMH, respectively. Total consideration transferred by the Company to complete the acquisition of TAMH was $182.9 million. The Company transferred non-cash consideration of $7.3 million and its equity values of the previously mentioned LLCs.

The purchase price allocation was finalized in the second quarter of 2020. A summary of the consideration given is as follows:


(in thousands)
Non-cash consideration	$	7,318
Investments contributed at fair value	124,662
Investment contributed at cost	50,875
Total purchase price consideration	$	182,855

The final purchase price allocation at October 1, 2019, is as follows:


(in thousands)
Cash and cash equivalents	$	47,042
Accounts receivable	12,175
Inventories	31,765
Other current assets	2,638
Goodwill	3,075
Right of use asset	5,200
Other assets, net	861
Property, plant and equipment, net	321,380
	424,136

Trade and other payables	13,461
Accrued expense and other current liabilities	3,011
Other long-term liabilities	292
Long-term lease liabilities	2,230
Long-term debt, including current maturities	47,886
	66,880
Noncontrolling Interest	174,401
Net Assets Acquired	$	182,855

Removal of preexisting ownership interest	$	(88,426)
Pre-tax gain on derecognition of preexisting ownership interest	$	36,286

Asset and liability account balances in the opening balance sheet above include the previously consolidated TADE investment balances at carryover basis.

The $3.1 million of goodwill recognized is primarily attributable to expected synergies and the assembled workforce of TAMH. None of the goodwill is deductible for income tax purposes. Due to finalization of the purchase price accounting as well as adjustments to deferred income taxes during the second quarter, goodwill increased $0.4 million, other long-term liabilities increased $0.1 million and noncontrolling interest increased $0.3 million.

The fair value in the opening balance sheet of the 49.9% noncontrolling interest in TAMH was finalized at $174.4 million. The fair value was estimated based on 49.9% of the total equity value of TAMH based on the transaction price for the 50.1% stake in TAMH, considering the consideration transferred noted above.

Pro Forma Financial Information (Unaudited)

The summary pro forma financial information for the periods presented below gives effect to the TAMH acquisition as if it had occurred at January 1, 2019.


	Year ended December 31,
(in thousands)	2020		2019
Net sales	$	8,208,436	$	8,377,863
Net loss	(14,215)		(24,475)

Pro forma net income was also adjusted to account for the tax effects of the pro forma adjustments noted above using a statutory tax rate of 25%. The pro forma amounts for net income above have been adjusted to reflect additional depreciation and amortization that would have been charged assuming the fair value adjustments to Property, plant and equipment had been applied on January 1, 2019 related to the TAMH merger.

Pro forma financial information is not necessarily indicative of the Company's actual results of operations if the acquisition had been completed at the date indicated, nor is it necessarily an indication of future operating results. Amounts do not include any operating efficiencies or cost savings that the Company believes are achievable.