Business Combinations and Divestitures

12 Months Ended

Sep. 30, 2020

Business Combination Disclosure [Text Block]

19. BUSINESS COMBINATIONS

The Company completed two acquisitions during the year ended September 30, 2020 for a total aggregate cash consideration of $28,952.

• Aerial Lighting & Electric, Inc. (“Aerial”) – On February 18, 2020, we acquired 100% of the equity interests in Aerial, a Naugatuck, Connecticut-based electrical contractor specializing in the design and installation of electrical systems for multi-family developments. The acquisition of Aerial furthers our Residential segment's growth strategy by providing a foothold in the Northeast market.

• Plant Power & Control Systems, LLC (“PPCS”) – On February 21, 2020, we acquired 100% of the membership interests in PPCS, a Birmingham, Alabama-based manufacturer and installer of custom engineered power distribution equipment. The acquisition of PPCS furthers our Infrastructure Solutions segment's growth strategy by accelerating their expansion in the Southeast market.

The Company accounted for the transactions under the acquisition method of accounting, which requires recording assets and liabilities at fair value (Level 3). The valuation of the assets and liabilities assumed is as follows:


Current assets	$	5,660
Property and equipment	489
Operating right of use asset	331
Intangible assets	18,276
Goodwill	10,117
Current liabilities	(3,802)
Operating long-term lease liabilities	(170)
Deferred tax liability	(1,949)
Net assets acquired	$	28,952

With regard to goodwill, the balance is attributable to the workforce of the acquired business and other intangibles that do not qualify for separate recognition. In connection with these acquisitions, we acquired goodwill of $10,117 of which $3,916 is tax deductible.

The intangible assets acquired primarily consisted of customer relationships with a total weighted-average amortization period of 8.8 years.

In conjunction with these acquisitions, we acquired receivables totaling $3,190, of which we estimated none to be uncollectible at the date of acquisition. These acquisitions contributed $21,836 in revenue and $812 in operating income during the year ended September 30, 2020.

Unaudited Pro Forma Information

The following unaudited supplemental pro forma results of operations for the year ended September 30, 2020 are calculated as if each acquisition occurred as of October 1 of the fiscal year prior to consummation.


		Unaudited
		Twelve Months Ended September 30,
		2020		2019
Revenues	$	1,208,020	$	1,118,460
Net income attributable to IES Holdings, Inc.	$	43,285	$	34,967