2. Acquisitions

Western Pacific Enterprises Ltd.

On October 28, 2016, the Company completed the acquisition of substantially all of the assets of Western Pacific Enterprises GP and of Western Pacific Enterprises Ltd., except for certain real estate owned by Western Pacific Enterprises Ltd., with the company continuing operations under the name Western Pacific Enterprises Ltd. (“WPE”), an electrical contracting firm in western Canada. With its main headquarters in Coquitlam, British Columbia, WPE provides a wide range of commercial and industrial electrical construction capabilities under the Company’s C&I segment. WPE also provides substation construction capabilities under the Company’s T&D segment. The total consideration paid was approximately $12.1 million, which was funded through borrowings from our line of credit. Total consideration paid included $2.2 million subject to potential net asset adjustments once the final net assets acquired are finalized by the end of 2017. These net asset adjustments were approximately $0.8 million as of the October 28, 2016 closing date and as of December 31, 2016. The Company accounted for the net asset adjustments as a reduction to consideration paid and will be funded through our escrow.

The purchase agreement also includes provisions for margin guarantee adjustments based upon performance subsequent to the acquisition on certain contracts. Contingent consideration of approximately $1.4 million related to the margin guarantee adjustments on certain contracts was recorded in other income for the year ended December 31, 2016. Future margin guarantee adjustments, if any, are expected to be completed by the end of 2017. Additionally, there could also be contingent payments based on the successful achievement of certain performance targets and continued employment of certain key executives of WPE. These payments are recognized as compensation expense in the consolidated statement of operations as incurred. During the year ended December 31, 2016 the Company recognized less than $0.1 million of compensation expense associated with these contingent payments.

The results of operations for WPE are included in the Company’s consolidated statement of operations and the C&I segment from the date of acquisition. Costs of approximately $0.4 million related to the acquisition were included in selling, general and administrative expenses in the consolidated statement of operations.

The following table summarizes the allocation of the opening balance sheet from the date of acquisition through December 31, 2016:


(in thousands)	(as of acquisition date) October 28, 2016			Measurement Period Adjustments		(adjusted acquisition amounts as of) December 31, 2016
Total consideration, net of net asset adjustments	$	11,283		$	—	$	11,283

Accounts receivable, net	$	20,249		$	—	$	20,249
Costs and estimated earnings in excess of billings on uncompleted contracts		1,610			—		1,610
Other current assets		8			—		8
Property and equipment		4,108			—		4,108
Accounts payable		(10,125	)		—		(10,125	)
Billings in excess of costs and estimated earnings on uncompleted contracts		(3,020	)		—		(3,020	)
Other current liabilities		(2,294	)		—		(2,294	)
Net identifiable assets		10,536			—		10,536
Unallocated intangible assets	$	747		$	—	$	747

The Company has developed preliminary estimates of fair value of the assets acquired and liabilities assumed for the purposes of allocating the purchase price. Further adjustments are expected to the allocation as third party valuations of identifiable intangible assets, including backlog, customer relationships, trade name and off-market component, are determined, and as net asset adjustments are finalized. The Company expects that the excess of the purchase price over the net amount of the fair values to be assigned to assets acquired and liabilities assumed will be completely allocated to identifiable intangible assets. A portion of the identifiable intangible assets are expected to be tax deductible per applicable Canadian Revenue Authority regulations.

High Country Line Construction, Inc.

On November 24, 2015, the Company acquired all of the outstanding common stock of High Country Line Construction, Inc. (“HCL”). The acquisition of HCL expanded the Company’s T&D construction services, predominantly in the western United States. The acquisition date fair value of consideration transferred, funded through existing cash resources, was $1.7 million, net of cash acquired. The purchase price was allocated to net identifiable assets with $0.3 million allocated to identifiable intangibles (backlog and customer relationships) and the remaining $0.2 million allocated to goodwill. The Company has finalized the purchase price accounting relating to the HCL acquisition. Costs of approximately $0.2 million related to the acquisition were included in selling, general and administrative expenses in the December 31, 2015 consolidated statement of operations.

E.S. Boulos Company

On April 13, 2015, the Company acquired substantially all of the assets of E.S. Boulos Company (“ESB”). The total consideration paid was approximately $11.4 million, which was funded through existing cash resources of the Company. Headquartered in Westbrook, Maine, ESB offers construction capabilities under the Company’s T&D segment, including substation, transmission and distribution construction. ESB also provides commercial and industrial electrical construction under its C&I segment, including a wide range of commercial electrical construction services. The Company has finalized the purchase price accounting relating to the ESB acquisition.