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Business Acquisition | 3 Months Ended
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Apr. 02, 2022
Business Combination and Asset Acquisition [Abstract] |
Business Acquisition | Business Acquisition On February 28, 2022, CRA acquired substantially all the business assets and assumed certain liabilities of Welch Consulting, Ltd. (“Welch Consulting”), a Texas limited partnership. Welch Consulting provided economic, business, and strategic consulting services principally involving labor and employment issues. The acquisition expands CRA’s business opportunities, expertise, and market presence with the addition of 45 colleagues and offices in Bryan, Texas; Los Angeles, California; and Washington, D.C. A non-employee expert of CRA served as an agent and attorney-in-fact on behalf of Welch Consulting. The non-employee expert did not and will not receive compensation or a portion of the purchase price as part of the transaction. The acquisition has been accounted for as a business combination, and the results of operations have been included in the accompanying condensed consolidated financial statements from the date of acquisition. The operating results of the acquired business for the fiscal quarter ended April 2, 2022 were not material to CRA's consolidated operating results. On the date of acquisition, right-of-use assets and lease liabilities were recorded in accordance with ASC Topic 842, Leases. In addition, contract assets and contract liabilities were recorded in accordance with ASC 606, as CRA adopted ASU 2021-08 on the first day of fiscal 2022. All other tangible assets and identifiable intangible assets acquired and liabilities assumed were recorded at their fair value as of the date of acquisition. The current values of assets acquired and liabilities assumed are preliminary and based on the best available information. Certain items, such as the working capital adjustments, intangible assets, and goodwill, may be subject to change as additional information is received. The allocation of the purchase price will be finalized as soon as practicable, but not later than one year from the date of acquisition. The final purchase price allocation may be different from the preliminary estimate reported as CRA receives additional information and completes its analysis of transaction-related activities, the impact of which is not expected to be material to CRA’s results of operations for fiscal 2022. The following table presents the preliminary assets acquired and liabilities assumed as of April 2, 2022 (in thousands):
Assets Acquired |
Current assets: |
Accounts receivable | $ | 3,778 |
Unbilled services | 1,507 |
Prepaid expenses and other current assets | 100 |
Total current assets | 5,385 |
Property and equipment | 141 |
Goodwill | 2,409 |
Intangible assets | 4,150 |
Right-of-use assets | 1,210 |
Other assets | 41 |
Total assets acquired | $ | 13,336 |
Liabilities Assumed |
Current liabilities: |
Accrued expenses | $ | 1,280 |
Deferred revenue and other liabilities | 161 |
Current portion of lease liabilities | 549 |
Total current liabilities | 1,990 |
Non-current portion of lease liabilities | 661 |
Total liabilities assumed | $ | 2,651 |
Net assets acquired | $ | 10,685 |
For the acquired assets and assumed liabilities, CRA initially paid $10.6 million in cash, the amount of which was based on the estimates of certain net working capital items. Subsequent to the acquisition date, certain net working capital items were adjusted. These adjustments are reflected in the assets acquired and liabilities assumed in the table above. Additional adjustment to the purchase consideration may be due to or from Welch Consulting. Per the terms of the Asset Purchase Agreement, $0.5 million was to be withheld from the closing payment and paid to Welch Consulting within one year of the date of acquisition, subject to the satisfaction of certain assurances provided by Welch Consulting. In addition, CRA issued $7.9 million of forgivable loans and agreed to provide other deferred compensation to key employees and a non-employee expert, which will be treated as post-transaction compensation expense as incurred. The intangible assets acquired are comprised of customer relationships, the fair value of which was determined using a multi-period excess earning method. The customer relationships intangible is being amortized over a ten-year life on a straight-line basis, which approximates the expected pattern of economic benefit from this asset. The Company also recorded $2.4 million of goodwill, all of which is expected to be deductible for tax purposes. Transaction related expenses, which are principally legal and accounting service fees, amounted to $0.2 million for the fiscal quarter ended April 2, 2022 and are included in selling, general and administrative expenses on the condensed consolidated statements of operations.

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- References No definition available. + Details
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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 http://asc.fasb.org/topic&trid=2303972 + Details
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