4. BUSINESS COMBINATIONS AND DISPOSITIONS

2025 Disposition

In June 2025, we disposed of our EKU Power Drives subsidiary in our Manufacturing Segment. We recorded a loss of $10.5 million in connection with this disposal, which was classified as other income and expense, net on our consolidated statements of operations. Total assets decreased approximately $44.0 million and total liabilities decreased approximately $32.0 million on our consolidated balance sheet as a result of this disposal. This subsidiary recorded a pretax loss of $4.5 million in 2025, pretax income of $1.6 million in 2024, and pretax income of $1.2 million in 2023. This subsidiary recorded a net loss attributable to ProFrac Holding Corp. of $3.3 million in 2025, net income attributable to ProFrac Holding Corp. of $1.2 million in 2024, and net income attributable to ProFrac Holding Corp. of $0.6 million in 2023. This disposal will not have a major effect on our future operations and financial results.

2024 Acquisitions

In April 2024, we acquired all of the remaining equity interests of Basin Production and Completion LLC (“BPC”). BPC is the parent company of FHE USA LLC, which manufactures equipment used in the hydraulic fracturing industry. This acquisition expanded our manufacturing capabilities into new product categories. The total purchase consideration was $39.8 million, consisting of cash consideration of $14.9 million and our pre-existing equity investment of $24.9 million. In 2024, our operating results included revenues of $17.1 million and a pretax loss of $11.0 million, related to the BPC acquired operations. BPC is included in our Manufacturing reportable segment.

In June 2024, we acquired 100% of the issued and outstanding capital stock of Advanced Stimulation Technologies, Inc. (“AST”), a pressure pumping services provider serving the Permian Basin, for total purchase consideration of $173.4 million in cash. This acquisition expanded our hydraulic fracturing capabilities. For the six months ended June 30, 2024, our operating results included revenues of $15.0 million and pretax earnings of $0.1 million related to the AST acquired operations. Throughout the third quarter of 2024, we integrated AST’s operations. As a result, we track all stimulation services assets as one group and it would be impracticable to separately report AST revenues or pretax earnings subsequent to June 30, 2024. AST is included in our Stimulation Services reportable segment.

In June 2024, we acquired 100% of the issued and outstanding common stock of NRG Manufacturing, Inc., which manufactures equipment used in the hydraulic fracturing industry, and its affiliate, AMI US Holdings, Inc., which develops commercial software used in hydraulic fracturing industry (collectively “NRG”), for total purchase consideration of $6.0 million in cash. This acquisition expanded our manufacturing and maintenance capabilities. In 2024, our operating results include revenues of $9.2 million and a pretax loss of $1.0 million, related to the NRG acquired operations. NRG is included in our Manufacturing reportable segment.

We generally used the cost approach to value acquired property, plant and equipment adjusted for the age, condition and utility of the associated assets. The market approach valuation technique was used for assets that had comparable market data available. The intangible assets related to the BPC acquisition represent customer relationships and a trade name. The fair value of the customer relationships was determined using the income approach, which is predicated upon the value of the future cash flows that these customers will generate over an estimated time period. The fair value of the trade name was determined using a relief from royalty methodology.

The amounts allocated to goodwill are attributable to the organized workforce and potential or expected synergies. We estimate that the goodwill acquired in the BPC acquisition will be deductible for income tax purposes.

2023 Acquisitions

On January 3, 2023, we acquired 100% of the issued and outstanding membership interest of Producers Service Holdings LLC (“Producers”), which was an employee-owned pressure pumping services provider serving Appalachia and the Mid-Continent, for a total purchase consideration of $36.5 million, consisting of (i) Class A common stock valued at $12.9 million based on the acquisition date closing price of $21.40; (ii) cash consideration of $9.7 million; and (iii) our pre-existing investment of $13.9 million. Throughout the six months ended June 30, 2023, we integrated Producers' operations. As a result, we track all stimulation services assets as one group and it would be impracticable to separately report Producers' revenues or pretax earnings subsequent to the acquisition.

On February 24, 2023, we acquired 100% of the issued and outstanding membership interests in (i) Performance Proppants, LLC, (ii) Red River Land Holdings, LLC, (iii) Performance Royalty, LLC, (iv) Performance Proppants International, LLC, and (v) Sunny Point Aggregates, LLC (together, “Performance Proppants”) for a total purchase consideration of $462.8 million, consisting of (i) Class A common stock valued at $6.2 million based on the acquisition date closing price of $19.67; (ii) cash consideration of $452.4 million; and (iii) the settlement of a pre-existing receivable of $4.2 million. Performance Proppants was a frac sand provider in the Haynesville basin. The Performance Proppants acquisition contributed revenues of $204.9 million and pretax income of $99.9 million, before intercompany eliminations, to our consolidated statement of operations for the year ended December 31, 2023. The Performance Proppants acquisition contributed revenues of $154.8 million, after intercompany eliminations, to our consolidated statement of operations for the year ended December 31, 2023.

We generally used the cost approach to value acquired property, plant and equipment adjusted for the age, condition and utility of the associated assets. The market approach valuation technique was used for assets that had comparable market data available. Included in Performance Proppants property, plant and equipment valuation is mineral reserves valued at $248.3 million using the income approach, which is predicated upon the value of the future cash flows that an asset will generate over its economic life. The intangible assets related to the Performance Proppants acquisition represent customer relationships and the fair value was determined using the with-and-without method which is an income approach and considers the time needed to rebuild the customer base.

The amounts allocated to goodwill were attributable to the organized workforce and potential or expected synergies. The goodwill for Producers and Performance Proppants was recognized in the Stimulation Services and Proppant Production segments, respectively. We estimate that substantially all of the goodwill will be deductible for income tax purposes.

The following combined pro forma results of operations have been prepared as though the AST, BPC, NRG, Producers and Performance Proppants acquisitions had been completed on January 1, 2023. Pro forma amounts presented below are for illustrative purposes only and do not reflect future events that occurred after December 31, 2024, or any operating efficiencies or inefficiencies that may result from these significant acquisitions. The results of operations are not necessarily indicative of results that would have been achieved had we controlled AST, BPC, NRG, Producers and Performance Proppants during the periods presented.

We incurred zero, $3.3 million and $16.2 million of costs related to acquisitions in 2025, 2024 and 2023, respectively. Acquisition costs are included in acquisition and integration costs within the consolidated statements of operations.