Related Party Transactions |
12 Months Ended |
|---|---|
Dec. 31, 2017 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions |
26. Related Party Transactions:
The Company maintains certain policies and procedures for the review, approval and ratification of related party transactions to ensure that all transactions with selected parties are fair, reasonable and in the Company’s best interests. All significant relationships and transactions are separately identified by management if they meet the definition of a related party or a related party transaction. Related party transactions include transactions that occurred during the year, or are currently proposed, in which the Company was or will be a participant, and for which any related person had or will have a direct or indirect material interest. All related party transactions are reviewed, approved and documented by the appropriate level of the Company’s management in accordance with these policies and procedures.
On December 29, 2014, PQ Holdings, CCMP and PQ Corporation entered into a consulting agreement relating to the provision of certain financial and strategic advisory services and consulting services. Similarly, the consulting agreement between PQ Holdings, INEOS Capital Partners and PQ Corporation was amended and restated. Under the new consulting agreements, the Company agreed to pay an annual monitoring fee of $5,000 distributed to CCMP and INEOS AG equal to the Pro Rata Percentage, as defined, between CCMP and INEOS AG. These consulting agreements were terminated upon completion of the IPO. The Company recorded $3,777, $3,584 and $590 of management advisory fees in other operating expense, net in the consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015, respectively.
Advisory Services and Monitoring Agreement
Concurrent with the consummation of the 2014 Acquisition, the Company entered into an advisory services and monitoring agreement with CCMP, pursuant to which CCMP provided certain advisory services to the Company. Pursuant to the advisory services and monitoring agreement, CCMP and certain members of the Company’s management and board of managers were paid a one-time fee on the Closing Date of $8,000 related to the 2014 Acquisition, Senior Secured Credit Facilities and 2022 Notes transactions, and CCMP received (i) an annual advisory fee of $500 and (ii) reimbursement for reasonable out-of-pocket expenses incurred in connection with the provision of services, including the reasonable fees and disbursements of legal counsel and other advisors retained by CCMP and travel and reasonable out-of-pocket expenses of each director appointed by CCMP to the Company’s board of managers or the board of directors of its affiliates, and of any other representative of CCMP in connection with their provision of such services. The advisory services and monitoring agreement also provided for customary exculpation, indemnification and confidentiality provisions. The one-time management fee was recorded by the Company as an increase to selling, general and administrative expenses.
Effective January 1, 2015, the Company entered into a service agreement with CCMP (the “Services Agreement”) for the provision of services historically provided by Solvay. The services include product information and operations support, manufacturing support, electronic data processing and systems support, employee relations, and financial services. The Company recorded $1,616 for these services and reimbursable expenses provided under the Service Agreement, which was recorded in selling, general and administrative expenses for the year ended December 31, 2015.
Pursuant to the advisory services and monitoring agreement, the Company agreed to pay certain investors a one-time fee of $1,600 for services provided related to the 2014 Acquisition. On January 13, 2015, pursuant to a payment direction and subscription agreement, in lieu of the Company paying this fee, these investors agreed to contribute the $1,600 transaction fee to the capital of Eco Services Group Holdings LLC (“Holdings”). Holdings contributed this fee to Eco Services Intermediate Holdings LLC (“Intermediate Holdings”). Intermediate Holdings in turn contributed this transaction fee to the Company, increasing the Company’s additional paid-in capital by $1,600.
Transactions with Management and Board of Managers
For the year ended December 31, 2015, certain members of the Company’s board of managers and management contributed $1,538 in cash, which was invested directly into Holdings. Holdings contributed these proceeds to Intermediate Holdings. Intermediate Holdings in turn contributed the proceeds to the Company, increasing the Company’s additional paid-in capital by $1,538.
Transactions with Board of Directors
In connection with the offering by PQ Corporation of $525,000 aggregate principal amount of Senior Unsecured Notes due 2022 in May 2016, a member of the Company’s board of directors purchased $4,000 in principal amount of such notes. Interest accrued on the notes at an annual rate equal to three-month LIBOR plus 10.75%, with a 1.0% LIBOR floor, payable and reset quarterly. The director received interest payments in respect of the notes totaling $362 and $300 during the years ended December 31, 2017 and 2016, respectively. The notes were partially redeemed in October 2017, in connection with the Company’s initial public offering and December 2017, in connection with the Company’s issuance and sale of the $300,000 Senior Unsecured Notes due 2025 (see Note 15). The director received $4,000 of principal amount of such notes as well as $338 related to the prepayment penalties in connection with these two transactions.
Joint Venture Agreement
The Company entered into a joint venture agreement (the “ZI Partnership Agreement”) in 1988 with CRI Zeolites Inc., a Royal Dutch Shell plc affiliate, to form Zeolyst International, our 50/50 joint venture partnership (the “Partnership”). Under the terms of the ZI Partnership Agreement, the Partnership leases certain land used in its Kansas City production facilities from PQ Corporation. This lease, which has been recorded as an operating lease, provided for rental payments of $295, $187 and $0 during the years ended December 31, 2017, 2016 and 2015, respectively. The terms of this lease are evergreen as long as the ZI Partnership Agreement is in place. The Partnership purchases certain of its raw materials from the Company and is charged for various manufacturing costs incurred at the Company’s Kansas City production facility. The amount of these costs charged to the Partnership were $17,470, $10,707 and $0 for the years ended December 31, 2017, 2016 and 2015, respectively. Certain administrative, marketing, engineering, management-related, and research and development services are provided to the Partnership by the Company. During the years ended December 31, 2017, 2016 and 2015, the Partnership was charged $12,248, $8,169 and $0, respectively, for these services. In addition, the Partnership was charged certain product demonstration costs of $2,175, $1,663 and $0 during the years ended December 31, 2017, 2016 and 2015, respectively.
Other
From time to time, the Company makes sales to portfolio companies of funds that are affiliated with CCMP and companies that are affiliated with INEOS Capital Partners, but these sales are not material.
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