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ACQUISITIONS (Tables)

3 Months Ended

Mar. 31, 2025

ACQUISITIONS

Summary of estimated fair value tangible and intangible assets acquired and liabilities assumed on acquisition


(in thousands)		Balance at September 27, 2024
Assets purchased:
Cash		$	284
Accounts receivable			364
Other assets			15
Customer relationships (1)			5,100
Goodwill (2)			2,667
Total assets purchased			8,430

Liabilities assumed:
Accounts payable and accrued liabilities			360
Deferred revenue			1,065
Total liabilities assumed			1,425

Net assets acquired			7,005

Consideration:
Cash paid			3,407
Note payable (3)			2,348
Contingent consideration liability (4)			1,250
Total consideration		$	7,005

(1)

Represents an acquired intangible asset that will be amortized on a straight-line basis over its estimated useful life of 8 years.

(2)

Goodwill represents the excess of purchase price over the estimated fair value of net tangible and intangible assets acquired. The amount of goodwill expected to be deductible for tax purposes is $2,667,000. Goodwill primarily relates to the expected synergies from combining operations of the Company and ADA Site Compliance and the value of the acquired workforce.

(3)

Represents the fair value of the Note Payable in the aggregate principal amount of $2,400,000.

(4)

The fair value of the contingent consideration liability under the earn-out was determined using the Monte-Carlo simulation. The key assumptions used in the Monte-Carlo simulation were as follows: ARR and NRR metrics for the earn-out period, NRR discount rate of 7.5%, ARR discount rate of 6.5%, expected NRR volatility of 12.5%, expected ARR volatility of 7.5%, risk-free rate of 3.9%, buyer specific counterparty credit risk of 14.25%, and discount period of 1.62 years.