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Business Combinations | 12 Months Ended
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Sep. 30, 2013
BusinessCombinationsAbstract |
BusinessCombinationDisclosureTextBlock | 20. BUSINESS COMBINATION Acquisition of Assets from the Acro Group On February 8, 2013, IES Renewable Energy, LLC (“IES Renewable”), an indirect wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement with a group of entities operating under the name of the Acro Group: Residential Renewable Technologies, Inc., Energy Efficiency Solar, Inc. and Lonestar Renewable Technologies Acquisition Corp. (collectively, the “Acro Group”). Pursuant to the terms of the As set Purchase Agreement, the Company agreed to acquire certain assets in connection with the Acro Group’s turn-key residential solar integration business (the “Acquired Assets”). The Acquired Assets include, but are not limited to, assets relating to the A cro Group’s solar installation sales and marketing platform and the backlog of contracts entered into by the Acro Group with residential solar customers, which provide for the payment of sales and marketing fees in connection with the sale, installation an d third-party financing of residential solar equipment. The transaction closed on February 15, 2013 (the “Closing Date”). Following consummation of the transaction, IES Residential, Inc. (“IES Residential”), a wholly-owned subsidiary of the Company, b egan offering full-service residential solar integration services, including design, procurement, permitting, installation, financing services through third parties and warranty services for residential customers. IES Residential had previously provided s olar installation subcontracting services to the Acro Group, and as of February 8, 2013, was owed $3,800 for subcontracting services provided up to that date (such balance, as of the day prior to the Closing Date, the “Accounts Receivable Balance”). Tot al consideration received by the Acro Group for the Acquired Assets consists of (i) IES Residential’s release of the Accounts Receivable Balance, (ii) payment by IES Renewable to the Acro Group of a percentage of future gross revenue generated from the Acq uired Assets in an amount not to exceed $2,000 over the 12-month period beginning the first full month following the Closing Date, subject to certain reductions as described in the Asset Purchase Agreement, and (iii) $828 representing amounts paid by IES R esidential, to the Acro Group to fund certain of its operating expenses between January 4, 2013 and the Closing Date. Purchase price and fair value of assets acquired and liabilities assumed The Company accounted for the transaction under the acquisitio n method of accounting, which requires recording assets and liabilities at fair value (Level 3). These Level 3 fair value assessments were measured based on a third party valuation, utilizing methodologies including discounted cash flow, replacement cost, and excess earnings, which are subject to finalization. The total estimated purchase price was allocated to the tangible assets and separately identifiable intangible assets acquired and liabilities assumed based on their fair values on the Closing Date. The valuations were derived based on assumptions made by management. While management believes that its assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different values being assigned to individual assets acquired and liabilities assumed. The fair value of assets acquired and liabilities assumed on the Closing Date is as follows:
| IES receivable from the Acro Group as of December 31, 2012 (a) |  | $ | 2,263 |  |
| IES deferred cost recorded in connection with transactions with Acro Group between January 1, 2013 and February 15, 2013 |  |  | 1,042 |  |
| Cash purchase consideration |  |  | 828 |  |
| Fair value of contingent consideration (b) |  |  | 665 |  |
| Total consideration transferred |  | $ | 4,798 |  |
| (a) | As of the Closing Date, IES had a receivable from the Acro Group from past transactions between the two companies. This receivable was forgiven by IES as a portion of the consideration paid to acquire the Acro Group assets and liabilities. |  |  |  |  |
| (b) | The contingent consideration is based on a formula of the Acro Group's revenue for the first 12 months after February 15, 2013, with a maximum and minimum amount payable by IES. |  |  |  |  |
| Total estimate of consideration expected to be transferred |  |  | 4,798 |  |
| Fair value of assets acquired and liabilities assumed: |  |  |  |  |
|  | Trade receivables |  | $ | 317 |  |
|  | Prepaid commissions |  |  | 46 |  |
|  | Inventory |  |  | 16 |  |
|  | Property and equipment |  |  | 40 |  |
|  | Order backlog |  |  | 350 |  |
|  | Covenant not-to-compete |  |  | 140 |  |
|  | Developed technology |  |  | 400 |  |
|  | Vacation payable |  |  | (26) |  |
|  | Customer incentive payable |  |  | (70) |  |
|  | Deferred revenue |  |  | (600) |  |
| Goodwill: (c) |  | $ | 4,185 |  |
|  | (c) | The goodwill is attributable to the workforce of the acquired business and other intangibles that do not qualify for separate recognition. |  |  |  |  |
Acquisition of MISCOR On September 13, 2013 we completed the acquisition of 100% of the voting equity interests of MISCOR Group, LTD (“MISCOR”), a provider of maintenance and repair services including engine parts and components to the industrial and rail services. MISCOR operates in locations in Indiana, Alabama, Ohio, West Virginia, and California. Following the consumm ation of the transaction, MISCOR was incorporated as the sole component of our Infrastructure Solutions segment. To tal consideration received by MISCOR shareholders consisted of 2,795,577 shares of I ES common stock valued at $11,85 3, combined with cash totaling $4,364. Purchase price and f air value of assets acquired and liabilities assumed The Company accounted for the transaction under the acquisition method of accounting, which requires recording assets and liabilities at fair value (Level 3). These Level 3 fair value assessments were measured based on a third party valuation, utilizing methodologies including discounted cash flow, replacement cost, and excess earnings, which are subject to finalization. The total estimated purchase price was allocated to the tangible assets and separat ely identifiable intangible assets acquired and liabilities assumed based on their preliminary estimated fair values on September 13, 2013. The valuations derived from estimated fair value assessments and assumptions used by management are preliminary pen ding finalization of certain intangible asset valuations. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different values being assigne d to individual assets acquired and liabilities assumed. This may result in adjustments to the preliminary amounts recorded and goodwill, which could be material. The preliminary valuation of the assets acquired and liabilities assumed as of September 13, 2013 is as follows:
| IES Common Shares (2,795,577) |  | $ | 11,853 |  |
| Cash purchase consideration |  |  | 4,364 |  |
| Total consideration transferred |  | $ | 16,217 |  |
| Total estimate of consideration expected to be transferred |  | $ | 16,217 |  |
| Fair value of assets acquired and liabilities assumed: |  |  |  |  |
|  | Trade receivables |  | $ | 4,925 |  |
|  | Prepaids |  |  | 532 |  |
|  | Inventory |  |  | 7,530 |  |
|  | Property and equipment |  |  | 5,355 |  |
|  | Customer relationships |  |  | 2,100 |  |
|  | Technical library |  |  | 400 |  |
|  | Trade names |  |  | 1,200 |  |
|  | Other assets |  |  | 552 |  |
|  | Trade payables |  |  | (4,143) |  |
|  | Accrued liabilities |  |  | (2,016) |  |
|  | Term loan |  |  | (5,511) |  |
| Goodwill: (c) |  | $ | 5,293 |  |
|  | (c) | Although this goodwill is not deductible for tax purposes, we acquired tax basis of $8.6 million in goodwill and intangible assets recognized by MISCOR prior to our purchase agreement with them. The deferred tax asset associated with the basis is fully offset by a corresponding valuation allowance. No value was assigned in the purchase price allocation above to the original intangible assets recognized by MISCOR prior to our purchase agreement. |  |  |  |  |
Unaudited Pro Forma Information – 2013 Acquisitions The following unaudited supplemental pro forma results of operations include the results of each of the companies acquired during year ended September 30, 2013, described above as if each had been consolidated as of October 1, 2011, and have been provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined companies for the periods presented or that may be achiev ed by the combined companies in the future. Future results may vary significantly from the results reflected in the following pro forma financial information because of future events and transactions, as well as other factors, many of which are beyond IES’s control. The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as the recording of incremental depreciation expense in connection with fair value adjustments to property and equipment, incremental am ortization expense in connection with recording acquired identifiable intangible assets at fair value, and the elimination of the impact of historical transactions between IES and the Acro Group that would have been treated as intercompany transactions had the companies been consolidated. The unaudited pro forma financial information also includes the effect of certain non-recurring items as of October 1, 2011 such as $3,034 in acquisition related costs incurred during the year ended September 30, 2013. The unaudited pro forma financial statements include these acquisition related costs as if they had been incurred on October 1, 2011. The supplemental pro forma results of operations for the years ended September 30, 2013 and 2012, as if the assets of Acro Group had been acquired and the acquisition of MISCOR had been completed on October 1, 2011, are as follows:
|  |  | Unaudited |
|  | Year Ended |  | Year Ended |
|  | September 30, 2013 |  | September 30, 2012 |
Revenues |  | $ | 542,027 |  | $ | 520,016 |
Net loss from continuing operations |  | $ | (3,081) |  | $ | (6,642) |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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