Quarterly report pursuant to Section 13 or 15(d)

Business Combination

v3.20.2
Business Combination
9 Months Ended
Sep. 30, 2020
Business Combination  
Business Combination

(3) Business Combination

On March 12, 2019, AMGP and Antero Midstream Partners completed the Transactions. The Transactions have been accounted for using the acquisition method of accounting with Antero Midstream Corporation identified as the acquirer of Antero Midstream Partners.

The components of the fair value of consideration transferred are as follows (in thousands):

Fair value of shares of AM common stock issued(1)

    

$

4,017,881

Cash

598,709

Total fair value of consideration transferred

$

4,616,590

(1) The fair value of each share of AM common stock issued in connection with the Transactions was determined to be $12.54, the closing price of AMGP common shares on March 12, 2019.

The final purchase price allocation of the Transactions are summarized in the table below. The fair value of assets acquired and liabilities assumed at March 12, 2019, were as follows (in thousands):

Cash and cash equivalents

    

$

619,532

Accounts receivable–Antero Resources

142,312

Accounts receivable–third party

117

Other current assets

1,150

Property and equipment, net

3,371,427

Investments in unconsolidated affiliates

568,285

Customer relationships

1,567,000

Other assets, net

42,887

Total assets acquired

6,312,710

Accounts payable–Antero Resources

3,316

Accounts payable–third party

30,674

Accrued liabilities

87,021

Other current liabilities

537

Long-term debt

2,364,935

Contingent acquisition consideration

116,924

Other liabilities

8,524

Total liabilities assumed

2,611,931

Net assets acquired, excluding goodwill

3,700,779

Goodwill

915,811

Net assets acquired

$

4,616,590

All customer relationships are subject to amortization, which is recognized over a weighted-average period of 23 years for the remaining economic life of the relationship.

The purchase price allocation resulted in the recognition of $915 million of goodwill, including $575 million within the Company’s gathering and processing segment and $340 million of goodwill within its water handling segment. Substantially all of the goodwill is expected to be deductible for tax purposes. Goodwill represented the efficiencies realized with simplifying the Company’s corporate structure to own, operate and develop midstream energy infrastructure primarily to service Antero Resources. See Note 5—Goodwill and Intangibles.

The Company’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2019 include $6 million of acquisition-related costs associated with the Transactions. These costs were expensed as general and administrative costs.