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Acquisition and Divestiture | 12 Months Ended
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Dec. 31, 2024
Business Combinations [Abstract] |
Acquisitions and Divestitures | NOTE 17 – ACQUISITIONS AND DIVESTITURES Acquisitions Applied Energy Group, Inc. On December 31, 2024, the Company completed the acquisition of Applied Energy Group, Inc. (“AEG”), an energy technology and advisory services company, for $60.7 million in cash consideration. The purchase price is subjected to net working capital adjustments expected to be completed within ninety days. AEG provides a suite of integrated technology and advisory solutions to electric and gas utilities, state and local governments, and state energy offices nationwide which will further enhance the Company’s service offering and client footprint. As part of the preliminary allocation of the purchase consideration, the Company recorded the following:
Net working capital | $ | 4,049 |
Property and equipment |  | 55 |
Customer-related intangibles |  | 21,000 |
Developed technology |  | 5,000 |
Trade names and trademarks |  | 350 |
Goodwill |  | 30,200 |
Purchase considerations | $ | 60,654 |
Net working capital includes restricted cash of $5.6 million, accounts receivable of $4.5 million, and accrued expenses of $5.7 million. The finalization of allocation is expected to be completed by the second quarter of 2025, and is currently open primarily for final net working capital adjustments, valuation of acquired intangibles, and computation of deferred revenue. The estimated useful lives of acquired intangible assets are as follows:
Customer-related intangibles | 9.0 years
Developed technology | 6.0 years
Trade names and trademarks | 1.0 year
The goodwill is attributable to the workforce of AEG and expected synergies with the Company. Goodwill has an indefinite life, and is deductible for income tax purposes. The pro-forma impact of the acquisition is not material to the Company’s results of operations. 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 the following:
Net working capital | $ | 1,169 |
Customer-related intangibles |  | 9,900 |
Trade names and trademarks |  | 100 |
Goodwill |  | 21,366 |
Purchase considerations | $ | 32,535 |
The estimated useful lives of acquired intangible assets are as follows:
Customer-related intangibles | 5 years
Trade names and trademarks | 1 year
Goodwill has an indefinite life and is deductible for income tax purposes. 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 brought domain expertise in environmental regulatory compliance and permitting for the transportation, renewable energy, water, and resource management sectors and added technically specialized staff in all aspects of environmental services to the Company. As part of the allocation of the purchase consideration, the Company recorded the following:
Net working capital | $ | 4,604 |
Property and equipment |  | 159 |
Customer-related intangibles |  | 10,919 |
Contract backlog |  | 466 |
Trade names and trademarks |  | 60 |
Goodwill |  | 9,712 |
Deferred income tax liabilities |  | (3,023 | )
Purchase consideration | $ | 22,897 |
The estimated useful lives of acquired intangible assets are as follows:
Customer-related intangibles | 11 years
Contract backlog | 3 years
Trade names and trademarks | 0.3 year
Goodwill has an indefinite life and is not deductible for income tax purposes. 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. The 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 |
The estimated useful lives of acquired intangible assets are as follows:
Customer-related intangibles | 4.0 years
Trade names and trademarks | 0.7 year
Goodwill is reflective of the existing workforce of SemanticBits and the expected synergies created with the Company as part of the acquisition. 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, and 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.
| (Unaudited) |
| Year Ended |
| 2022 |
Revenue | $ | 1,856,399 |
Net income |  | 75,999 |
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. Divestitures Commercial Marketing On September 12, 2023, the Company completed the divesture of its U.S. commercial marketing business for $47.1 million in cash. 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. For the years ended December 31, 2024 and 2023, the Company recorded pre-tax gain of $2.0 million and $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 November 1, 2023, the Company completed the divesture of its Canadian mobile and Short Message Service (“SMS”) messaging aggregator business for $5.4 million in cash. 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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