Quarterly report [Sections 13 or 15(d)]

Acquisitions

v3.26.1
Acquisitions
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
On May 4, 2026, the Company entered into an Asset Purchase Agreement (the "Purchase Agreement") to acquire 100% interest in substantially all the assets and certain specified liabilities of Midwest Graphic Sales, Inc. and Sigma Coating, Inc. (together, "Midwest") for purchase consideration of approximately $13.5 million, subject to certain working capital adjustments. The transaction closed simultaneously with the execution of the Purchase Agreement and was funded using cash on hand. Midwest is a specialty chemical formulator focused on the manufacturing and distribution of coatings, inks, and high-value packaging applications across food, pharmaceutical, personal care, and consumer end markets. The acquisition directly supports Ascent’s Chemicals-as-a-Service (“CaaS”) strategy and adds customer-embedded, formulation-driven demand across food, pharmaceutical, personal care, and consumer packaging applications, supported by customized solutions, strong margins, and long-tenured customer relationships that can be scaled across Ascent’s platform to drive margin expansion and accelerated growth.
The acquisition accounting resulted in the recognition, on a preliminary basis, of assets acquired and liabilities assumed on the acquisition date based on available information. The Company preliminarily recognized fair values of the assets acquired and liabilities assumed and recognized $4.7 million of goodwill and $7.7 million of intangible assets. As of June 30, 2026, the Company has not finalized acquisition accounting, including, but not limited to, the fair value of accounts receivable, accounts payable, accrued expenses, property, plant and equipment, and final purchase consideration. The acquisition accounting is subject to change as the Company continues to obtain and assess relevant information that existed as of the acquisition date.
The preliminary allocation of the total estimated purchase consideration is as follows:
(in thousands) May 4, 2026
Accounts receivable, net $ 1,193 
Inventories 611 
Prepaid expenses and other current assets 7 
Property, plant and equipment 100 
Intangible assets 7,665 
Total identifiable assets acquired 9,576 
Accounts payable 658 
Accrued expenses and other current liabilities 117 
Total identifiable liabilities assumed 775 
Net identifiable assets acquired 8,801 
Total preliminary consideration transferred per ASC 805 13,536 
Goodwill $ 4,735 
Goodwill primarily represents expected synergies from combining operations, acquired workforce, and other benefits that do not qualify for separate recognition. Goodwill is not expected to be deductible for income tax purposes. All of the $4.7 million acquired goodwill was assigned to the Company's Specialty Chemicals reportable segment
The intangible assets consist of trade names and trademarks of $0.3 million and customer relationships of $7.4 million, which will be amortized using an accelerated method over a period of 3 years and 20 years, respectively.
From the acquisition date through June 30, 2026, Midwest generated $1.9 million of net sales and no net income. Midwest's net income includes the impact of $0.3 million of intangible amortization from the acquisition date through June 30, 2026. For the three months ended June 30, 2026, total acquisition-related costs of $0.2 million were reported in selling, general and administrative expenses.

In connection with the acquisition of Midwest, the Company was required to fund $1.1 million of cash in escrow to be released after a holding period of 18 months, subject to post-closing employment obligations for certain acquired Midwest employees. See Note 16 for additional information on the Company's restricted cash.
Pro Forma Financial Information
The following unaudited pro forma information shows the combined results of operations as if the acquisition had occurred as of the beginning of the periods presented. The unaudited pro forma information is presented for informational purposes only and may not reflect the actual results that would have been achieved and indicate future results.
(unaudited) Three Months Ended June 30, Six Months Ended June 30,
(in thousands, except per share data) 2026 2025 2026 2025
Pro forma net sales $ 26,551  $ 21,432  $ 49,169  $ 42,514 
Pro forma net income (loss) $ 759  $ (2,609) $ (732) $ (4,232)