2. ACQUISITION OF EAGLE ALCOHOL.

On January 14, 2022, the Company purchased 100% of the membership interests of Eagle Alcohol. The purchase price was $14.0 million in cash plus an estimated net working capital adjustment of $1.3 million in cash. The selling members of Eagle Alcohol are eligible to receive up to an additional $14.0 million of contingent consideration, payable through a combination of $9.0 million in cash over the next three years and an aggregate of $5.0 million in the Company’s common stock on the fourth- and fifth-year anniversaries of the closing date, subject to the satisfaction of certain conditions, including continued employment with the Company. With respect to these payments, the Company has accrued $3.5 million in other current liabilities in the accompanying consolidated balance sheets as of December 31, 2022, with the expense included in selling, general and administrative expenses in the accompanying consolidated statements of operations for the year then ended.

Eagle Alcohol specializes in break bulk distribution of specialty alcohols. Eagle Alcohol purchases bulk alcohol from suppliers and then stores, denatures, packages, and resells alcohol products in smaller sizes, including tank trucks, totes, and drums, that typically garner a premium price to bulk alcohols. Eagle Alcohol delivers products to customers in the beverage, food, industrial and related-process industries via its own dedicated trucking fleet and common carrier. The acquisition has provided the Company further vertical integration and access to new markets in the specialty alcohol industry.

Eagle Alcohol’s unaudited standalone results for the years ended December 31, 2022 and 2021 generated $29.2 million and $35.7 million in net sales and $1.0 million and $3.6 million in net income, respectively. The following table presents unaudited pro forma combined financial information assuming the acquisition occurred on January 1, 2021 (dollars in thousands except per share amounts):

The Company’s following allocation of purchase price assumes, with the exception of property and equipment and intangibles, carrying values approximated fair value. The Company did not incur any material acquisition costs. Estimates of uncollectible accounts receivable were not considered material due to the short-term nature and customer collection history. As a result, the final purchase price allocation is as follows (in thousands):

Goodwill represents the value of the downstream integration that the operations of Eagle Alcohol will add to the Company. The Company expects the amortization of goodwill to be deductible for tax purposes. For the identifiable intangible assets, the Company has estimated 12 years for useful lives for customer relationships and 10 years for tradename.