Annual report pursuant to Section 13 and 15(d)

Business Acquisitions and Related Transactions

v2.4.0.6
Business Acquisitions and Related Transactions
 12 Months Ended
Dec. 31, 2012
Business Combinations [Abstract]  
Business Acquisitions and Related Transactions
BUSINESS ACQUISITIONS AND RELATED TRANSACTIONS
In July 2012, the Company’s wholly owned subsidiary Ameresco Canada Inc. acquired FAME, a privately held company offering infrastructure asset management solutions serving both public and private sector customers primarily in western Canada. The Company made a cash payment of $4,486,950 to acquire all of the outstanding stock of FAME. The Company deposited approximately $900,000 of the purchase price with a third-party escrow agent as security for the selling stockholders’ indemnification obligations under the terms of the acquisition agreement.
In December 2011, the Company’s wholly owned subsidiary AIS acquired the xChange Point® and energy projects businesses, including automated demand response, from EPS. The Company made an initial cash payment of $4,497,141 to acquire these assets. The purchase price is subject to post-closing adjustments for pro-ration of certain revenue and expense items and for certain indemnity obligations of EPS. The Company deposited approximately $900,000 of the initial cash payment with a third-party escrow agent as security for these matters.
In August 2011, the Company acquired Ameresco Southwest (then known as APS Energy Services, Inc.) from Pinnacle West Capital Corporation. The Company made a cash payment of $50,057,113 to acquire all of the outstanding stock of Ameresco Southwest.
In July 2011, the Company acquired all of the outstanding capital stock of AEG for an initial cash payment of $11,993,236. The Company deposited $1,000,000 of the purchase price with a third-party escrow agent as security for the selling stockholders’ indemnity obligations under the terms of the acquisition agreement. The former stockholders of AEG, all of whom are now employees of the Company, may be entitled to receive up to $5,000,000 in additional consideration if AEG meets certain financial performance milestones. The fair value of the additional consideration was estimated to be $1,652,000, and is included in other liabilities in the purchase allocation table below. As of December 31, 2012 the Company recorded $1,075,112 to accrue for the valuation of the current commitment.
In August 2010, the Company acquired Quantum Engineering and Development Inc. (“Quantum”) for an initial cash payment of $6,150,000. During April 2011, the Company made an additional payment of $1,956,366 in accordance with certain provisions of the stock purchase agreement with the former shareholders of Quantum. The payment has been reflected retrospectively as additional goodwill in the accompanying consolidated balance sheets in accordance with ASC 805, Business Combinations.
The Company’s acquisitions in 2012 and 2011 were accounted for using the acquisition method in accordance with ASC 805, Business Combinations. The purchase price for each has been allocated to the assets based on their estimated fair values at the date of each acquisition as set forth in the table below. The excess purchase price over the estimated fair value of the net assets acquired has been recorded as goodwill. Intangible assets identified have been recorded and are being amortized over periods ranging from one to fourteen years. See Note 4 for additional information.
 
2012
 
2011
 
FAME
 
AEG
 
Ameresco Southwest
 
AIS
Cash
$
809,557

 
$
314,642

 
$
—

 
$
—

Accounts receivable
320,997

 
4,138,015

 
14,149,703

 
—

Costs and estimated earnings in excess of billings
—

 
—

 
11,269,294

 
163,340

Inventory
—

 
—

 
—

 
47,193

Prepaid expenses and other current assets
107,715

 
62,345

 
33,329

 
—

Project development costs
—

 
—

 
—

 
130,044

Property and equipment and project assets
43,115

 
7,301

 
6,447,299

 
216,297

Goodwill
1,886,945

 
8,728,169

 
16,545,434

 
1,549,467

Intangible assets
2,099,990

 
4,904,000

 
7,019,000

 
2,557,000

Other assets
100

 
52,062

 
—

 
—

Accounts payable
(5,713
)
 
(1,610,734
)
 
(1,992,748
)
 
—

Accrued liabilities
(617,731
)
 
(1,011,032
)
 
(3,414,198
)
 
(65,627
)
Billings in excess of cost and estimated earnings
(158,025
)
 
—

 
—

 
(100,573
)
Deferred taxes and other liabilities
—

 
(3,591,532
)
 
—

 
—

Purchase price
$
4,486,950

 
$
11,993,236

 
$
50,057,113

 
$
4,497,141

Total, net of cash received
$
3,677,393

 
$
11,678,594

 
$
50,057,113

 
$
4,497,141

Total fair value of consideration
$
4,486,950

 
$
11,993,236

 
$
50,057,113

 
$
4,497,141


The allocation of the purchase price for the 2012 acquisition is preliminary and based on management’s current best estimates.
The results of the acquired companies since the dates of the acquisitions have been included in the Company’s operations as presented in the accompanying consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of cash flows.
The supplemental pro forma unaudited information that follows, does not include any data related to the 2012 FAME acquisition as this has been deemed immaterial to the Company. The following supplemental pro forma unaudited information has been prepared for informational purposes only and is intended to represent or be indicative of what would have occurred had the acquisitions been completed on January 1, 2011, and are not indicative of any future results. Financial information for the period prior to the dates of the acquisitions have been provided by the sellers for purposes of this pro forma unaudited presentation:
 
 
Years Ended December 31,
 
 
2012
 
2011
 
 
(Unaudited)
 
(Unaudited and Restated)
Pro forma consolidated results:
 
 
 
 
Revenue
 
$
631,170,565

 
$
783,303,331

Income
 
$
18,360,133

 
$
30,776,678

Basic earnings per share
 
$
0.41

 
$
0.72

Diluted earnings per share
 
$
0.40

 
$
0.69