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Business Combinations | 12 Months Ended
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Dec. 31, 2021
Business Combinations [Abstract] |
Business Combinations | NOTE 16 – BUSINESS COMBINATIONS On January 31, 2020, the Company acquired all of the membership interests in Incentive Technology Group, LLC (“ITG”), a Virginia limited liability company, for $251.3 million in cash after working capital adjustments. The acquisition expanded the Company’s IT modernization service offerings to the federal government clients. Headquartered in Arlington, Virginia, ITG was an information technology consulting firm that provided cloud-based platform services to the federal government. The pro-forma impact of the acquisition is not material to our results of operations. In addition to working capital acquired of $15.7 million, the Company recognized the fair values of the assets acquired and liabilities assumed and allocated $188.3 million to goodwill and $47.3 million to intangible assets. Goodwill primarily reflects the value of providing an established platform to leverage the Company’s existing digital interactive technologies and domain expertise and synergies expected to arise from providing end-to-end customer solutions to a combined client-base across all channels, as well as any intangible assets that do not qualify for separate recognition. The intangible assets consist of customer relationships with fair value of $46.4 million and branding with fair value of $0.9 million. The intangible assets are amortized on a straight-line basis over approximately 7 years and 1 year, respectively. The ITG acquisition was treated as a deemed asset purchase for income tax purposes; therefore, goodwill and amortization of other intangibles created via this acquisition will be amortized for income tax purposes over 15 years. On December 31, 2020, the Company completed the acquisition of Eco-Tech Consultants, Inc. (“Eco-Tech”), an ecological consulting firm located in Louisville, Kentucky, for a cash purchase price of $0.2 million. Eco-Tech provides a range of ecological services and is expected to increase the Company’s capacity to support a growing portfolio of transportation agency clients and commercial clients in the eastern United States. The pro-forma impact of the acquisition is not material to our results of operations. On November 1, 2021, the Company completed the acquisition of ESAC, one of the leading specialized providers of advanced health analytics, research data management and bioinformatics solutions to U.S. federal health agencies, for a cash purchase price of approximately $17.3 million, subject to working capital adjustments. In addition to working capital acquired of $2.7 million, the Company recognized fair value of the assets acquired and liabilities assumed and allocated, on a preliminary basis using the best available information, $11.2 million to goodwill and $3.4 million to intangible assets. Intangible assets included $3.1 million related to customer relationships and $0.3 million related to technology and other intangibles, and are amortized over 3 years and less than 1 year, respectively. The Company expects to complete the purchase price allocation within one year from the acquisition date as it finalizes the determination of working capital. The pro-forma impact of the acquisition is not material to our results of operations. On December 31, 2021, the Company acquired Creative Systems, a premier provider of IT modernization and digital transformation solutions to federal agencies, for a cash purchase price of approximately $159.5 million, subject to working capital adjustments. In addition to working capital acquired of $4.5 million, the Company recognized fair value of the assets acquired and liabilities assumed and allocated $126.1 million to goodwill and $28.9 million to intangible assets. Intangible assets consist of $24.5 million in customer relationships, $3.7 million related to developed technology, $0.6 million related to trade names and trademarks, and $0.1 million related to non-compete agreements. The customer-related and technology related intangibles will be amortized straight-line over the next 4 years and 10 years, respectively, while trade names and trademarks and non-compete agreements will be amortized in less than one year from the acquisition date. Goodwill is reflective of the existing workforce at Creative Systems and the expected synergies created with the Company as a result of the acquisition. The allocation of the total purchase price to the tangible and intangible assets and liabilities of Creative Systems was based on management’s preliminary estimate of fair value, based on the best available information, as the acquisition was finalized during the first quarter of the 2022 fiscal year. The Company expects to complete the purchase accounting during the 2022 fiscal year as it finalizes the determination of both working capital as well as its estimates of future cash flows underlying the valuation of customer-related intangible assets. The pro-forma impact of the acquisition is not material to our results of operations. A prior acquisition’s purchase agreement included additional consideration in the form of two warranty and indemnity hold back payments, one for approximately $1.9 million, which was released in the second quarter of 2020, and the other for approximately $1.2 million scheduled to be released in the fourth quarter of 2022 and included as part of accrued expenses and other current liabilities on the Company’s consolidated balance sheets (see Note 9—Accrued Expenses and Other Current Liabilities.) The two warranty and indemnity liabilities were recorded at their fair value at the date of the acquisition discounting the liabilities at 3.0% and 3.25%, respectively.

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