Business Combinations

12 Months Ended

Dec. 31, 2022

Business Combinations

Business Combinations

Note 3 — Business Combinations

Alliance Acquisition

On July 1, 2022, we completed our acquisition of all of the equity interests of Alliance. The Alliance acquisition extends our energy transition strategy by adding shallow water capabilities into what we expect to be a growing offshore decommissioning market.

The aggregate preliminary purchase price of the Alliance acquisition was $145.7 million, consisting of $119.0 million with cash on hand and the estimated fair value of $26.7 million of contingent consideration related to the post-closing earn-out consideration. The earn-out is payable in 2024 to the seller in the Alliance transaction in either cash or shares of our common stock pursuant to the terms of the Equity Purchase Agreement (the “Equity Purchase Agreement”) dated May 16, 2022. The earn-out is not capped and is calculated based on certain financial metrics of the Helix Alliance business for 2022 and 2023 relative to amounts as set forth in the Equity Purchase Agreement.

The following table summarizes the purchase consideration and the preliminary purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed as of July 1, 2022 (in thousands):

	As Originally				As
	Reported		Adjustments (1)		Adjusted
Cash consideration	$	118,961	$	—	$	118,961
Contingent consideration		26,700		—		26,700
Total fair value of consideration transferred	$	145,661		—	$	145,661
Assets acquired:
Cash and cash equivalents	$	6,336		—	$	6,336
Accounts receivable (2)		43,378		—		43,378
Other current assets		4,879		1,198		6,077
Property and equipment		118,619		(1,298)		117,321
Operating lease right-of-use assets		1,205		—		1,205
Intangible assets		1,400		100		1,500
Other assets		2,133		—		2,133
Total assets acquired		177,950		—		177,950
Liabilities assumed:
Accounts payable		20,480		—		20,480
Accrued liabilities		3,073		—		3,073
Operating lease liabilities		1,205		—		1,205
Deferred tax liabilities		7,531		—		7,531
Total liabilities assumed		32,289		—		32,289
Net assets acquired	$	145,661	$	—	$	145,661

(1) Adjustments to the preliminary purchase price allocation stem mainly from additional information obtained in between the closing of the Alliance acquisition on July 1, 2022 and December 31, 2022 about facts and circumstances that existed as of the acquisition date.

(2) The gross contractual accounts receivable totaled $44.2 million. The fair value of accounts receivable reflects our best estimate at the acquisition date of contractual cash flows expected to be collected.

The pro forma summary below presents the results of operations as if the Alliance acquisition had occurred on January 1, 2021 and includes transaction accounting adjustments such as incremental depreciation and amortization expense from acquired tangible and intangible assets, elimination of interest expense on Alliance’s long-term debt that was paid off in conjunction with the acquisition, and tax-related effects. The pro forma summary uses estimates and assumptions based on information available at the time. Management believes the estimates and assumptions to be reasonable; however, actual results may differ significantly from this pro forma financial information. The pro forma information does not reflect any cost savings, operating synergies or revenue enhancements that might have been achieved from combining the operations. The unaudited pro forma summary is provided for illustrative purposes only and does not purport to represent Helix’s actual consolidated results of operations had the acquisition been completed as of the date presented, nor should it be considered indicative of Helix’s future consolidated results of operations.

The following table summarizes the pro forma results of Helix and Alliance (in thousands):

	Year Ended December 31,
	2022		2021
Revenues	$	952,837	$	789,051
Net loss		(79,686)		(56,203)

STL Acquisition

In May 2019, we acquired a 70% controlling interest in STL, a subsea engineering firm based in Aberdeen, Scotland. The acquisition resulted in goodwill of $6.9 million. Oil prices as well as energy and energy services valuations experienced significant decline during the first quarter 2020 and as a result, we impaired all of our goodwill, which consisted entirely of goodwill attributable to STL. In June 2021, we acquired the remaining 30% interest in STL, which had been recognized as temporary equity. STL is included in our Well Intervention segment and its revenue and earnings are immaterial to our consolidated results.

The changes in the carrying amount of goodwill are as follows (in thousands):

	Well Intervention
Balance at December 31, 2019	$	7,157
Impairment loss		(6,689)
Foreign currency adjustments		(468)
Balance at December 31, 2020	$	—