Quarterly report pursuant to Section 13 or 15(d)

Business Acquisitions and Related Transactions

Business Acquisitions and Related Transactions
9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
We account for acquisitions using the acquisition method in accordance with ASC 805, Business Combinations. The purchase price for each acquisition is allocated to the assets based on their estimated fair values at the date of acquisition. The excess purchase price over the estimated fair value of the net assets acquired, which is calculated using level 3 inputs per the fair value hierarchy as defined in Note 11, is recorded as goodwill. Intangible assets, if identified, are also recorded. See Note 5 for additional information.
Enerqos Energy Solutions S.r.l. (“Enerqos”)
On February 24, 2023, we signed a definitive purchase and sale agreement to acquire Enerqos, a renewable energy and energy efficiency company headquartered in Milan, Italy. The acquisition closed on March 30, 2023 and the total purchase consideration was $13,445, of which $9,535 has been paid. There is no contingent consideration related to this acquisition. Cash acquired was $353, debt assumed was $3,951, and a deferred tax liability, net of $931 was recorded. The transaction costs, pro-forma effects of this acquisition on our operations, and contribution to revenue and net income the three and nine months ended September 30, 2023 were not material.
The estimated goodwill of $6,855 from the Enerqos acquisition consists largely of expected benefits, including the combined entities experience and the acquired workforce. This goodwill is not deductible for income tax purposes. The estimated fair value of tangible and intangible assets acquired and liabilities assumed are based on management's estimates and assumptions that are preliminary and subject to adjustments. Any measurement period adjustments made within one year from acquisition date, are recorded as adjustments to goodwill. Any adjustments made beyond the measurement period will be included in our condensed consolidated statements of income.
The results of the acquisition since the date of the acquisition have been included in our operations as presented in the accompanying condensed consolidated statements of income, condensed consolidated statements of comprehensive income and condensed consolidated statements of cash flows. We did not complete any acquisitions during the year ended December 31, 2022.
A summary of the cumulative consideration paid and allocation of the purchase price for the Enerqos acquisition are presented in the table below:
March 30, 2023
Cash and cash equivalents $ 190 
Accounts receivable 6,230 
Costs and estimated earnings in excess of billings 8,985 
Prepaid expenses and other current assets 16,504 
Project development costs 5,140 
Property and equipment and energy assets 1,234 
Goodwill 6,855 
Intangible assets 4,438 
Long-term restricted cash 163 
Accounts payable (15,480)
Accrued expenses and other current liabilities (4,510)
Current portions of long-term debt (15,165)
Deferred income tax liabilities, net (931)
Other liabilities (208)
Purchase price $ 13,445 
Purchase price, net of cash acquired $ 13,092 
Long-term debt assumed, net of current portions $ 3,951 
Total fair value of consideration $ 13,445 
Cash paid $ 9,535