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BUSINESS COMBINATION | 12 Months Ended
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Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
BUSINESS COMBINATION | BUSINESS COMBINATIONS Acquisition of ClipperCreek, Inc. (“ClipperCreek”) On December 31, 2021, the Company completed the acquisition of 100% of the shares of ClipperCreek, a privately-held company. ClipperCreek offers electric vehicle (“EV”) charging solutions for residential and commercial customers in the U.S. As part of the purchase price, the Company paid approximately $113.1 million in cash on December 31, 2021. The Company expects this acquisition will allow the Company to enter into the growing EV charging market and provides for cross-selling opportunities. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. In addition to the purchase price summarized above, the Company will be obligated to issue up to approximately $40.0 million in shares of common stock of the Company payable in the first quarter of 2023, subject to achievement of certain revenue and operational targets. As the additional payments require continuous employment of certain key employees of ClipperCreek and are subject to other conditions, these payments are being accounted for as post-combination expense and will be recognized ratably over the one year period presuming conditions will be met. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date, which are subject to change within the measurement period as the fair value assessments are finalized (in thousands):
Net tangible assets acquired |  | $ | 8,387 |
Intangible assets |  | 37,800 |
Goodwill |  | 66,916 |
Net assets acquired |  | $ | 113,103 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. The entire goodwill amount is expected to be deductible for U.S. federal income tax purposes over 15 years. Intangible assets consist primarily of trade name and order backlog. Trade name intangible is attributable to marketing goods and services under the ClipperCreek brand and order backlog pertains to purchase orders with customers yet to be fulfilled. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Preliminary Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Order backlog |  | $ | 600 |  |  | Based on actual shipments
Trade name |  | 37,200 |  |  | 5
Total identifiable intangible assets |  | $ | 37,800 |  |  |
The consolidated unaudited proforma revenue and net income for the two years presented below, which includes the acquisition of ClipperCreek, assuming the acquisition occurred on January 1, 2020, were (in thousands);
|  |  | Years Ended December 31,
|  |  |  |  | 2021 |  | 2020 |  |
Net revenues |  |  |  |  | $ | 1,401,803 |  |  | $ | 790,791 |  |  |
Net income |  |  |  |  | $ | 145,798 |  |  | $ | 139,126 |  |  |
The Company incurred and accrued costs related to this acquisition of $0.5 million that were recorded in general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2021. Acquisition of 365 Pronto, Inc. (“365 Pronto”) On December 13, 2021, the Company completed the acquisition of 100% of the shares of 365 Pronto, a privately-held company. 365 Pronto provides an online platform for clean technology installation and service landscape by matching asset owners with an on-demand qualified workforce in the U.S. As part of the purchase price, the Company paid approximately $69.9 million in cash on December 13, 2021. The Company expects this acquisition will offer installers an online platform to service their operations and maintenance contracts and provides access to a nationwide qualified supplemental labor pool that can perform service calls. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The results of operations of 365 Pronto have been included in the Company’s consolidated statement of operations from the acquisition date. In addition to the purchase price above, the Company will be obligated to pay up to approximately $11.0 million in shares of the Company’s common stock in the first half of 2023 subject to achievement of certain revenue, operational and employment targets. As nature of additional payments represents an in-substance service period of certain key employees of 365 Pronto and are subject to other conditions, these payments are being accounted for as post-combination expense and will be recognized ratably over the term of measurement period presuming conditions will be met. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date, which are subject to change within the measurement period as the fair value assessments are finalized (in thousands):
Net tangible assets acquired |  | $ | 38 |
Intangible assets |  | 19,500 |
Deferred tax liabilities |  | (2,906) |
Goodwill |  | 53,280 |
Net assets acquired |  | $ | 69,912 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of developed technology and customer relationship intangibles. Intangible assets attributable to developed technology include a combination of unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new products to facilitate the generation of new content. Customer relationship intangibles relate to 365 Pronto’s software ability to sell current and future offerings, as well as products built around the current offering, to its existing customers. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Preliminary Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Developed technology |  | $ | 18,400 |  |  | 5
Customer relationship |  | 1,100 |  |  | 5
Total identifiable intangible assets |  | $ | 19,500 |  |  |
Pro forma financial information has not been presented for the 365 Pronto acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred and accrued costs related to this acquisition of $0.5 million that were recorded in general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2021. Acquisition of DIN Engineer Service LLP’s (“DIN”) Solar Design Services Business On March 31, 2021, the Company completed its acquisition of DIN’s solar design services business. DIN's solar design services business provides outsourced proposal drawings and permit plan sets for residential solar installers in North America and will enhance the Company’s digital transformation effort. As part of the purchase price, the Company paid approximately $24.8 million in cash at closing on March 31, 2021.The Company expects this acquisition will provide installers new services by providing proposal drawing and permit plan sets. The acquisition has been accounted for as a business combination under the acquisition method; accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The results of operations of DIN’s solar design services business have been included in the Company’s consolidated statement of operations from the acquisition date. In addition to the purchase price summarized above, the Company will be obligated to pay up to i) approximately $5.0 million in equal monthly installments over the course of one year following the acquisition date and ii) approximately $5.0 million payable on the one year anniversary following the acquisition date subject to achievement of certain revenue and operational targets. As both additional payments require continuous employment of certain key employees of DIN and are subject to other conditions, these payments are being accounted for as post-combination expense and are recognized ratably over the term of measurement period. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Net tangible assets acquired |  | $ | 1,281 |
Intangible assets |  | 11,700 |
Goodwill |  | 11,804 |
Net assets acquired |  | $ | 24,785 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of customer relationship intangibles. Customer relationship intangibles relate to the ability of the acquired DIN solar design services business to sell current and future offering, as well as products built around the current offering, to its existing customers. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Preliminary Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Customer relationship |  | $ | 11,700 |  |  | 5
Pro forma financial information has not been presented for the DIN's solar design services business acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred costs related to this acquisition of $1.9 million that were recorded in general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2021, respectively. Acquisition of Sofdesk Inc. (“Sofdesk”) On January 25, 2021, the Company completed the acquisition of 100% of the shares of Sofdesk, a privately-held company. Sofdesk provides design tools and services software for residential solar installers and roofing companies and will enhance the Company’s digital transformation efforts. The Company expects this acquisition will offer installers design, proposal and permitting services of home energy solutions. As part of the purchase price, the Company (i) paid approximately $32.0 million in cash on January 25, 2021 and (ii) is liable for up to approximately $3.7 million of contingent consideration payable during the first quarter of 2022, of which the Company recorded a liability of approximately $3.5 million representing the fair value of the contingent consideration. The contingent consideration is subject to remeasurement at each reporting period until paid. The acquisition date fair value of the purchase price was approximately $35.5 million, which consisted of the following (in thousands):
Cash consideration |  | $ | 31,988 |
Fair value of contingent consideration |  | 3,500 |
Total |  | $ | 35,488 |
In addition to the purchase price discussed above, the Company will be obligated to pay up to approximately $3.7 million, during the first quarter of 2022, subject to continued employment of key employees of Sofdesk. As this payment is contingent upon the continuous service of the key employees, it is being accounted for as a post-combination expense and is recognized ratably over the term of measurement period. The acquisition has been accounted for as a business combination under the acquisition method, and accordingly, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. The results of operations of Sofdesk have been included in the Company’s consolidated statement of operations from the acquisition date. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date, (in thousands):
Net tangible assets acquired |  | $ | 1,441 |
Intangible assets |  | 9,200 |
Deferred tax asset |  | 457 |
Goodwill |  | 24,390 |
Net assets acquired |  | $ | 35,488 |
The excess of the consideration paid over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill is primarily attributable to expected synergies in the Company’s solar offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of developed technology, customer relationship intangibles and trade name intangibles. Intangible assets attributable to developed technology include a combination of unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new products to facilitate the generation of new content. Customer relationship intangibles relate to Sofdesk’s software ability to sell current and future offerings, as well as products built around the current offering, to its existing customers. Trade name intangibles are attributable to marketing goods and services under the Solargraf TM and Roofgraf TM brands. The following table shows the fair value of the separately identifiable intangible assets at the time of acquisition and the period over which each intangible asset will be amortized:
|  | Preliminary Fair Value |  | Useful Life
|  | (In thousands) |  | (Years)
Developed technology |  | $ | 6,900 |  |  | 5
Customer relationship |  | 1,800 |  |  | 5
Trade name |  | 500 |  |  | 5
Total identifiable intangible assets |  | $ | 9,200 |  |  |
Pro forma financial information has not been presented for the Sofdesk acquisition as the impact to the Company’s consolidated financial statements was not material. The Company incurred costs related to this acquisition of $2.0 million that were recorded in general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2021.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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