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Acquisition | 9 Months Ended
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Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisition | Acquisition Powerline Plus Ltd On January 4, 2022, the Company acquired all issued and outstanding shares of capital stock of Powerline Plus Ltd. and its affiliate PLP Redimix Ltd. (collectively, the “Powerline Plus Companies"), a full-service electrical distribution construction company based in Toronto, Ontario. Consideration paid, funded through a combination of cash on hand and borrowings under the Facility (as defined below), including $0.1 million of net asset and other adjustments, was $110.7 million, net of cash acquired. Additionally, the acquisition includes contingent earn-out consideration that may be payable if the Powerline Plus Companies achieve certain performance targets over a three-year post-acquisition period. As of the acquisition date, the fair value of the contingent earn-out consideration was $0.9 million. The future payout of the contingent earn-out consideration, if any, is unlimited and could be significantly higher than the acquisition date fair value. If the minimum thresholds of the performance targets are achieved the contingent earn-out consideration payment will be approximately $16.4 million. Changes in contingent earn-out consideration, subsequent to the acquisition, of approximately $0.5 million were recorded in other income, for the three and nine months ended September 30, 2022. The results of the Powerline Plus Companies are included in the Company’s consolidated financial statements beginning on the transaction date. During the three and nine months ended September 30, 2022, the Company recognized approximately $0.2 million and $0.4 million, respectively, of acquisition-related costs associated with this acquisition. The purchase agreement also includes contingent consideration provisions for down-side margin guarantee adjustments based upon certain contract performance subsequent to the acquisition. The contracts were valued at fair value at the acquisition date, causing no margin guarantee estimate or adjustments for fair value. Unfavorable changes in contract estimates, such as modified costs to complete or change order recognition, will result in changes to these margin guarantee estimates. Changes in margin guarantee adjustments on contracts, subsequent to the acquisition, were recorded in other income and were not significant for the three and nine months ended September 30, 2022. Future margin guarantee adjustments, if any, are expected to be recognized through 2022 and possibly in early 2023. The following table summarizes the preliminary allocation of the opening balance sheet as of the date of the Powerline Plus Companies acquisition through September 30, 2022:
(in thousands) |  | January 4, 2022 acquisition date (initial estimates) |  | Measurement Period Adjustments |  | January 4, 2022 acquisition date (as adjusted through September 30, 2022)
Cash paid |  | $ | 114,429 |  |  | $ | — |  |  | $ | 114,429 |
Contingent consideration - fair value at acquisition date |  | 10,608 |  |  | (9,743) |  |  | 865 |
Net asset and other adjustments |  | 563 |  |  | (479) |  |  | 84 |
Total consideration, net of estimated net asset adjustments |  | 125,600 |  |  | (10,222) |  |  | 115,378 |
Less: Acquired cash |  | (3,853) |  |  | — |  |  | (3,853) |
Total consideration less cash acquired, net of net asset and other adjustments |  | $ | 121,747 |  |  | $ | (10,222) |  |  | $ | 111,525 |
Cash and cash equivalents |  | $ | 3,853 |  |  | $ | — |  |  | $ | 3,853 |
Accounts receivable |  | 12,131 |  |  | (52) |  |  | 12,079 |
Contract assets, net |  | 12,443 |  |  | 148 |  |  | 12,591 |
Refundable income taxes |  | 394 |  |  | 482 |  |  | 876 |
Prepaid expenses and other current assets |  | 1,233 |  |  | (121) |  |  | 1,112 |
Property and equipment |  | 10,366 |  |  | 1,577 |  |  | 11,943 |
Operating lease right-of-use assets |  | 6,631 |  |  | — |  |  | 6,631 |
Intangible assets |  | — |  |  | 49,735 |  |  | 49,735 |
Accounts payable |  | (8,095) |  |  | (466) |  |  | (8,561) |
Contract liabilities |  | (1,597) |  |  | (95) |  |  | (1,692) |
Current portion of operating lease obligations |  | (1,224) |  |  | — |  |  | (1,224) |
Current portion of finance lease obligations |  | (1,492) |  |  | — |  |  | (1,492) |
Deferred income tax liabilities |  | (1,358) |  |  | (13,991) |  |  | (15,349) |
Operating lease obligations, net of current maturities |  | (4,897) |  |  | — |  |  | (4,897) |
Finance lease obligations, net of current maturities |  | (3,243) |  |  | — |  |  | (3,243) |
Net identifiable assets and liabilities |  | 25,145 |  |  | 37,217 |  |  | 62,362 |
Unallocated intangible assets |  | 56,650 |  |  | (56,650) |  |  | — |
Total acquired assets and liabilities |  | 81,795 |  |  | (19,433) |  |  | 62,362 |
Goodwill |  | $ | 43,805 |  |  | $ | 9,211 |  |  | $ | 53,016 |
The following table summarizes the estimated fair values of identifiable intangible assets and the related weighted average amortization periods as of the acquisition date of the Powerline Plus Companies.
|  | Estimated Fair Value at Acquisition Date |  | Weighted Average Amortization Period at Acquisition Date
|  | (in thousands) |  | (in years)
Amortizable Intangible Assets |  |  |  |
Customer relationships |  | $ | 39,757 |  |  | 15.0
Backlog |  | 4,007 |  |  | 1.0
Total amortizable intangible assets |  | 43,764 |  |  | 14.9
Indefinite-lived Intangible Assets |  |  |  |
Trade name |  | 5,971 |  |  | Indefinite
Total intangible assets |  | $ | 49,735 |  |  |
The Company has developed preliminary estimates of fair value of the assets acquired and liabilities assumed for the purposes of allocating the purchase price. During the nine months ended September 30, 2022, the Company recorded certain measurement period adjustments related to various working capital, property and equipment, intangible asset and deferred tax accounts determined during our purchase price allocation procedures. The goodwill to be recognized, which represents the excess of the purchase price over the net amount of the fair values assigned to assets acquired and liabilities assumed, is primarily attributable to the value of an assembled workforce and other non-identifiable assets. No synergies were anticipated in the acquisition as the Powerline Plus Companies will function as an individual business within the Company’s operating structure. The Company will finalize the allocation of the purchase price once the final review of third-party valuations is completed. A portion of the goodwill will be tax deductible per applicable Canadian Revenue Authority regulations.

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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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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