Annual report pursuant to Section 13 and 15(d)

Business Acquisitions and Related Transactions

v3.22.4
Business Acquisitions and Related Transactions
 12 Months Ended
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
Business Acquisitions and Related Transactions BUSINESS ACQUISITIONS AND RELATED TRANSACTIONS
In November 2021, we entered into a stock purchase agreement to acquire all of the stock of Juice Technologies, Inc. (d/b/a Plug Smart), an Ohio-based energy services company that specializes in the development and implementation of budget neutral capital improvement projects including building controls and building automation systems. In December 2021, we completed the acquisition of Plug Smart, which allows us to expand our existing pipeline and solution offerings in the smart buildings sector. The adjusted purchase consideration was $21,240, of which $17,692 was paid as of December 31, 2021. The consideration also included a hold-back of $750 and other accruals related to possible adjustments to net working capital at the acquisition date and future claims about representations and warranties by the sellers, if any, and a potential contingent consideration earn-out that had a fair value of $2,160 on the date of acquisition. The earn-out includes contingent consideration of up to $5,000 based upon meeting certain future EBITDA targets over the next five years. Cash acquired was $2,771 and no debt was assumed. The transaction costs, pro-forma effects of this acquisition on our operations, and contribution to revenue and net income for the years ended December 31, 2021 presented in the consolidated statements of income were not material.
The estimated goodwill of $12,499 from the Plug Smart acquisition consists largely of expected benefits, including the combined entities experience, technical problem-solving capabilities, 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 final working capital adjustments as of the acquisition date. During the year ended December 31, 2022, we made a final measurement period adjustment to working capital, goodwill, and intangible assets, and made a payment of $275 for the December 2021 earn-out. The fair value of the remaining contingent consideration increased to $3,800 as of December 31, 2022. See Note 18 for additional information on contingent consideration.
We did not complete any acquisitions during the year ended December 31, 2022.
A summary of the cumulative consideration paid, allocation of the purchase price, and adjustments made for the Plug Smart acquisition are presented in the table below:
Preliminary December 31, 2021 Measurement Period Adjustment As Adjusted December 31, 2022
Cash and cash equivalents $ 2,771  $ —  $ 2,771 
Accounts receivable 3,370  —  3,370 
Costs and estimated earnings in excess of billings 1,663  —  1,663 
Prepaid expenses and other current assets 1,499  —  1,499 
Goodwill 12,499  389  12,888 
Intangible assets 6,354  (409) 5,945 
Operating lease assets 488  —  488 
Accounts payable (1,795) —  (1,795)
Accrued expenses and other current liabilities (964) (127) (1,091)
Current portion of operating lease liabilities (145) (145)
Billings in excess of cost and estimated earnings (2,464) —  (2,464)
Deferred income tax liabilities (1,693) (1,693)
Long-term operating lease liabilities, net of current portion (343) —  (343)
Purchase price $ 21,240  $ (147) $ 21,093 
Purchase price, net of cash acquired $ 18,469  $ (147) $ 18,322 
Total fair value of consideration $ 21,240  $ 21,093 
Cash paid to date $ 17,692  $ 18,727 
Hold-back $ 750  $ 500