Annual report pursuant to Section 13 and 15(d)

Business Acquisitions

v2.4.0.6
Business Acquisitions
 12 Months Ended
Dec. 31, 2011
Business Acquisitions and Related Transactions [Abstract]  
Business Combination Disclosure [Text Block]
BUSINESS ACQUISITIONS AND RELATED TRANSACTIONS
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 approximately $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 AS 805, Business Combinations.
In July 2011, the Company acquired Applied Energy Group, Inc. ("AEG") from its stockholders. The Company made a cash payment of $11,993,236 to acquire all of the outstanding stock of AEG. The Company deposited $1,000,000 of the purchase price with a third-party escrow agent as security for the selling stockholders' indemnity obligations. 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 is estimated to be $1,652,000, and is included in other liabilities in the purchase allocation table below.
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 December 2011, the Company's wholly owned subsidiary Ameresco Intelligent Systems, LLC ("AIS") acquired xChange Point® and energy projects businesses, including automated demand response, from Energy and Power Solutions, Inc. ("EPS"). The Company made an initial cash payment of $4,497,141 to acquire from EPS certain assets used in these businesses. The purchase price is subject to a post-closing adjustment for certain indemnity obligations of EPS. The Company deposited approximately $900,000 of the purchase price with a third-party escrow agent as security for EPS's post-closing adjustment and indemnity obligations.
The Company's acquisitions in 2010 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. In the Quantum acquisition, identified intangible assets had de minimis value as the Company was primarily acquiring an assembled workforce in addition to the tangible net assets identified below. For the 2011 acquisitions, intangible assets identified have been recorded and are being amortized over periods ranging from one to ten years. See Note 4 for additional information.
 
2010
 
2011
 
Quantum
 
AEG
 
Ameresco Southwest
 
AIS
Cash
$
11,059

 
$
314,642

 
$
—

 
$
—

Accounts receivable
8,354,669

 
4,138,015

 
14,149,703

 
—

Accounts receivable retainage
423,927

 
—

 
—

 
—

Costs and estimated earnings in excess of billings
1,947,639

 
—

 
11,269,294

 
163,340

Inventory
—

 
—

 
—

 
47,193

Prepaid expenses and other current assets
33,922

 
62,345

 
33,329

 
—

Project development costs
—

 
—

 
—

 
130,044

Property and equipment and project assets
127,512

 
7,301

 
6,447,299

 
216,297

Goodwill
4,495,927

 
8,728,169

 
16,545,434

 
1,549,467

Intangible assets
—

 
4,904,000

 
7,019,000

 
2,557,000

Other assets
18,551

 
52,062

 
—

 
—

Accounts payable
(6,374,371
)
 
(1,610,734
)
 
(1,992,748
)
 
—

Accrued liabilities
(657,681
)
 
(1,011,032
)
 
(3,414,198
)
 
(65,627
)
Billings in excess of cost and estimated earnings
(274,788
)
 
—

 
—

 
(100,573
)
Deferred taxes and other liabilities
—

 
(3,591,532
)
 
—

 
—

Purchase price
$
8,106,366

 
$
11,993,236

 
$
50,057,113

 
$
4,497,141

Total, net of cash received
$
8,095,307

 
$
11,678,594

 
$
50,057,113

 
$
4,497,141

Total fair value of consideration
$
8,106,366

 
$
11,993,236

 
$
50,057,113

 
$
4,497,141

The allocations of the purchase price for the 2011 acquisitions of AEG, Ameresco Southwest and AIS are 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 and comprehensive income and consolidated statements of cash flows. The year-to-date revenue and pre-tax income (loss) of the acquisitions in 2011, following their corresponding acquisition dates, are as follows:
 
2011
 
AEG
 
Ameresco Southwest
 
AIS
Revenue
$
8,900,467

 
$
27,809,363

 
$
306,276

Pre-tax income (loss)
$
663,258

 
$
2,385,487

 
$
(58,989
)
The acquisition related information does not include any data related to the 2010 Quantum acquisition as this has been deemed immaterial to the Company. This supplemental unaudited pro forma information that follows 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, 2010, 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 unaudited pro forma presentation:
 
 
Years Ended December 31,
 
 
2010
 
2011
 
 
(Unaudited)
Pro forma consolidated results:
 
 
 
 
Revenue
 
$
720,431,788

 
$
783,303,331

Income
 
$
22,227,376

 
$
32,090,265

Basic earnings per share
 
$
0.86

 
$
0.75

Diluted earnings per share
 
$
0.54

 
$
0.72