Goodwill and Identifiable Intangible Assets, Net

12 Months Ended

Dec. 31, 2024

Goodwill and Identifiable Intangible Assets, Net

Goodwill and Identifiable Intangible Assets, Net

6. Goodwill and Identifiable Intangible Assets, Net

Goodwill

The changes in the carrying amount of goodwill are as follows (in thousands):

	Mechanical Segment		Electrical Segment		Total
Balance at December 31, 2022	$	363,929	$	247,860	$	611,789
Acquisitions and purchase price adjustments (See Note 5)		29,347		25,698		55,045
Balance at December 31, 2023		393,276		273,558		666,834
Acquisitions and purchase price adjustments (See Note 5)		208,236		200		208,436
Balance at December 31, 2024	$	601,512	$	273,758	$	875,270

The aggregate goodwill balance as of December 31, 2024 and 2023 includes $116.6 million of accumulated impairment charges, all of which relate to the mechanical segment.

During our annual impairment testing on October 1, 2024, we performed a qualitative assessment for each reporting unit, which considered various factors, including changes in the carrying value of the reporting unit, forecasted operating results, long-term growth rates and discount rates. Additionally, we considered qualitative key events and circumstances (i.e., macroeconomic environment, industry and market specific conditions, cost factors and events specific to the reporting unit, etc.). Based on this assessment, we concluded that it was more likely than not that the fair value of each reporting unit was greater than its carrying value. Accordingly, no further testing was required.

For the years ended December 31, 2024, 2023 and 2022, no impairment of our goodwill or other intangible assets was recorded.

There are significant inherent uncertainties and management judgment involved in estimating the fair value of each reporting unit. While we believe we have made reasonable estimates and assumptions to estimate the fair value of our reporting units, it is possible that a material change could occur. If actual results are not consistent with our current estimates and assumptions, or the current economic outlook worsens, goodwill impairment charges may be recorded in future periods.

Identifiable Intangible Assets, Net

Identifiable intangible assets consist of the following (dollars in thousands):

	Weighted-Average	December 31, 2024				December 31, 2023
	Remaining Useful Lives	Gross Book		Accumulated		Gross Book		Accumulated
	in Years	Value		Amortization		Value		Amortization
Customer Relationships	7.2	$	550,518	$	(241,263)	$	376,621	$	(193,338)
Backlog	1.5		54,918		(40,328)		5,900		(4,331)
Trade Names	17.6		151,561		(40,989)		129,661		(34,116)
Total		$	756,997	$	(322,580)	$	512,182	$	(231,785)

Identifiable intangible assets attributable to businesses acquired in 2024 have been preliminarily valued at $251.3 million, consisting of customer relationships, trade names, and backlog. Identifiable intangible assets attributable to businesses acquired in 2023 have been valued at $49.9 million, consisting of customer relationships, trade names, and backlog. The weighted-average initial amortization period for the identifiable intangible assets attributable to businesses acquired in 2024 and 2023 was 9.1 years and 10.2 years, respectively.

The amounts attributable to customer relationships and trade names are amortized to “Selling, General and Administrative Expenses” based upon the estimated consumption of their economic benefits, or under a shorter period of time using the straight-line method if the pattern of economic benefit cannot be reliably estimated. Our intangible assets related to customer relationships and trade names are amortized over periods from one to twenty-five years. The amounts attributable to backlog are amortized to “Cost of Services” on a proportionate method over the remaining backlog period. Amortization expense for the years ended December 31, 2024, 2023 and 2022 was $97.3 million, $43.4 million and $47.8 million, respectively.

As of December 31, 2024, future amortization expense of identifiable intangible assets was as follows (in thousands):

Year ending December 31—
2025	$	66,576
2026		55,961
2027		53,650
2028		52,103
2029		45,835
Thereafter		160,292
Total	$	434,417