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Acquisition and Divestiture | 12 Months Ended
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Dec. 31, 2023
Business Combinations [Abstract] |
Acquisitions and Divestitures | NOTE 16 – ACQUISITIONS AND DIVESTITURES Acquisitions CMY Solutions, LLC On May 1, 2023, the Company acquired CMY Solutions, LLC (“CMY”), a privately-held company that provides engineering and automation solutions to utilities and organizations, for $32.6 million in cash. The acquisition enhances the Company’s offerings in the field of power and energy advisory services. As part of the allocation of purchase consideration, the Company recorded $10.3 million of intangible assets, $1.2 million in net working capital, and $21.1 million of goodwill. The goodwill is deductible for income tax purposes. Intangible assets consist of $10.2 million related to existing customer relationships and $0.1 million related to trade names and trademarks. The pro-forma impact of the acquisition is not material to the Company’s results of operations. Blanton & Associates On September 1, 2022, the Company completed the acquisition of Blanton & Associates (“Blanton”), an environmental consulting, planning, and project management firm headquartered in Austin, Texas, for $22.9 million. Blanton brings domain expertise in environmental regulatory compliance and permitting for the transportation, renewable energy, water, and resource management sectors and adds technically specialized staff in all aspects of environmental services to the Company. As part of the allocation of the purchase consideration, the Company recorded net working capital of $4.6 million, property and equipment of $0.2 million, deferred income tax liabilities of $3.0 million, $11.4 million to intangible assets, and $9.7 million to goodwill. The goodwill is not deductible for income tax purposes. Intangible assets consisted of $10.9 million related to existing customer relationships, $0.5 million related to contract backlog, and $0.1 million related to trade names and trademarks. The pro-forma impact of the acquisition is not material to the Company’s results of operations. SemanticBits, LLC On July 13, 2022, the Company completed the acquisition of SemanticBits, LLC (“SemanticBits”), a 450-person Virginia limited liability company. SemanticBits is a partner to U.S. federal health agencies for mission-critical digital modernization solutions and provides a suite of scalable digital modernization services using open-source frameworks, including end-to-end agile scale development capabilities, cloud-native solutions, data analytics and human-centered designs. The acquisition provides synergies and scalabilities to support federal agencies with advanced IT solutions, digital modernization, and health expertise to solve complex customer challenges. The purchase price was $216.0 million in cash and was funded by the existing Credit Facility. T he final purchase price allocation is summarized as follows:
Contract receivables | $ | 12,699 |
Contract assets |  | 6,071 |
Customer-related intangibles |  | 62,967 |
Trade names and trademarks |  | 1,120 |
Other current and non-current assets |  | 407 |
Accrued salaries and benefits |  | (3,998 | )
Accrued expenses and other liabilities |  | (6,244 | )
Deferred tax liability |  | (16,701 | )
Net assets acquired |  | 56,321 |
Goodwill |  | 159,677 |
Purchase consideration | $ | 215,998 |
Goodwill is reflective of the existing workforce of SemanticBits and the expected synergies created with the Company as part of the acquisition. The useful lives associated with the customer-related intangible asset and trade names and trademarks are 4.0 years and 0.7 years, respectively. The goodwill and intangible assets are not deductible for income tax purposes. Acquisition-related costs and integration costs totaled $4.3 million and are included as part of indirect and selling expenses in the Company’s consolidated statements of comprehensive income. For the year ended December 31, 2022, SemanticBits contributed revenues of $64.3 million and gross profit of $26.7 million. Computation of an earnings measure other than gross profit is impracticable due to SemanticBits’ operations and financial systems being integrated with those of the Company. The following unaudited condensed pro forma information presents combined financial information as if the acquisition of SemanticBits had been effective at January 1, 2021, the beginning of the 2021 fiscal year. As a result, fiscal year 2022 represents the pro forma results for year two of the acquisition. The pro forma information includes alignment of SemanticBits’ revenue recognition policy, corrections of employee-related expenses, and adjustments reflecting changes in the amortization of intangibles, acquisition-related costs, interest expense, and records income tax effects as if SemanticBits had been included in the Company’s results of operations. The pro forma information is not intended to reflect the actual combined results of operations that would have occurred if the acquisition was completed on January 1, 2021, nor is it indicative of future operating results after the acquisition date of July 13, 2022.
| (Unaudited) |
| Year Ended |
(in thousands) | 2022 |  |  | 2021 |
Revenue | $ | 1,856,399 |  |  | $ | 1,667,425 |
Net income |  | 75,999 |  |  |  | 63,752 |
Creative Systems and Consulting On December 31, 2021, the Company acquired Creative Systems, a provider of IT modernization and digital transformation solutions to federal agencies, for cash purchase price of $156.6 million. The Company recognized fair value of the assets acquired and liabilities assumed, and allocated $128.1 million and $28.9 million of the purchase price to intangible assets and goodwill. The goodwill is deductible for income tax purposes. Intangible assets consisted 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 are being amortized on a straight-line basis over 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 pro-forma impact of the acquisition is not material to the Company’s results of operations. ESAC On November 1, 2021, the Company completed the acquisition of ESAC, which specializes in providing advanced health analytics, research data management and bioinformatics solutions to U.S. federal health agencies, for a cash purchase price of $17.3 million. In addition to working capital acquired of $2.6 million, the Company recognized fair value of the assets acquired and liabilities assumed and allocated $11.3 million to goodwill and $3.4 million to intangible assets. The goodwill is deductible for income tax purposes. Intangible assets included $3.1 million related to customer relationships and $0.3 million related to technology and other intangibles, which are amortized over 3 years and less than 1 year, respectively. The pro-forma impact of the acquisition is not material to the Company’s results of operations. Divestitures Commercial Marketing On July 21, 2023, the Company entered into an Asset Purchase Agreement to sell its U.S. commercial marketing business, including certain assets of the business, for initial cash considerations of $49.5 million before final net working capital adjustments. On September 12, 2023, the Company completed the divesture and received $47.1 million in cash, net of working capital adjustments and certain amounts held in escrow. The disposal of the commercial marketing business was not a major strategic shift that was, or will be, significant to the Company’s operations and financial results. In connection with the sale, the Company recorded a gross gain of $4.4 million and transactions fees of $1.9 million, for a total pre-tax gain of $2.5 million, that is included as part of other income on the Company’s consolidated statements of comprehensive income. Mobile and SMS Messaging Aggregator Business On July 24, 2023, the Company entered into an Asset Purchase Agreement to sell its mobile and Short Message Service (“SMS”) messaging aggregator business, including certain assets of the business, for the equivalent of $5.4 million in cash. The sale was completed on November 1, 2023. The disposal of the mobile aggregation and SMS messaging aggregator business was not a major strategic shift that was, or will be, significant to the Company’s operations and financial results. In connection with the sale, the Company recorded a pre-tax gain of $3.2 million that is included as part of other income on the Company’s consolidated statements of comprehensive income.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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