Business Acquisitions

9 Months Ended

Oct. 01, 2021

Business Acquisitions [Abstract]

BUSINESS ACQUISITIONS

NOTE 4 – BUSINESS ACQUISITIONS

In February 2020, the Company acquired Long Engineering LLC (“LONG”), a land surveying and engineering company headquartered in Atlanta, Georgia. The aggregate purchase price consideration paid in connection with this stock acquisition was $10.7 million in cash, subject to customary closing working capital adjustments plus an earnout of up to $12.0 million contingent upon the achievement of certain financial targets to be paid upon the first, second and third anniversaries of the closing.

In September 2020, the Company acquired AltaVista Solutions (“Alta Vista”), a provider of testing and inspection services primarily to infrastructure clients. Alta Vista is headquartered in Oakland, California and has offices in California and New York. The purchase agreement called for the Company to pay Alta Vista up to $15.1 million in the form of cash and stock consideration. The Company issued 776,197 shares of Class B common stock to the former owners of Alta Vista, which represented $7.0 million of the total consideration paid. Total consideration may also be increased or decreased based on results in future years.

In November 2020, the Company acquired WesTest LLC (“WesTest”), a testing and engineering services provider with operations in Colorado and Wyoming. WesTest, headquartered in Lakewood, Colorado, received consideration of $4.1 million in the form of cash and stock consideration. The Company issued 285,115 shares of Class A common stock to the former owner of WesTest, which represented $1.6 million of the total consideration paid. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies.

On April 14, 2021, the Company acquired Atlantic Engineering Laboratories, Inc. and Atlantic Engineering Laboratories of New York, Inc. (collectively, “AEL”) for cash and an amount of equity consideration totaling $24.5 million. The Company issued 738,566 shares of Class A common stock to the former owner of AEL, which represented $7.5 million of the total consideration paid. AEL is a materials testing and inspection firm based in Avenel, New Jersey, and provides steel, concrete, soil and other testing and inspection services to a diverse mix of public and private clients primarily in New York and New Jersey. AEL added approximately 290 professionals to the Company’s workforce and is expected to strengthen the Company’s materials testing and inspection services in the Northeast. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies.

On July 1, 2021, the Company acquired O’Neill Services Group (“O’Neill), a quality assurance and environmental services firm that services clients throughout the Pacific Northwest. O’Neill, headquartered in Redmond, Washington, employs 90 people and received $24.4 million in the form of cash and stock consideration. The Company issued 653,728 shares of Class A common stock which represented $6.5 million of the total consideration received. Total consideration may also be increased or decreased based on results in future years. Final value will be subject to the resolution of certain contingencies.

Acquisition costs of approximately $0.5 million and $0 million have been expensed in the three months ended October 1, 2021 and September 30, 2020, respectively, and $1.9 million and $0.6 million for the nine months ended October 1, 2021 and September 30, 2020, respectively, in the Consolidated Statement of Operations within operating expenses.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition:

	LONG			Alta Vista			WesTest*			AEL*			O'Neill*
Cash	$	-		$	314		$	649			2,354			1,608
Accounts receivable		4,994			2,786			1,072			6,026			4,201
Unbilled receivable		-			4,258			-			1,094			-
Property and equipment		1,423			306			246			52			349
Other current and long-term assets		14			707			2			130			-
Intangible assets		7,290			4,957			1,459			13,816			22,735
Liabilities		(1,178	)		(3,517	)		(304	)		(3,065	)		(1,546	)
Net assets acquired	$	12,543		$	9,811		$	3,124			20,407			27,347
Consideration paid (cash and equity consideration)	$	10,748		$	15,098		$	4,055		$	24,502		$	24,369
Contingent earnout liability at fair value (cash)		6,700			8,064			400			6,618			5,446
Total consideration		17,448			23,162			4,455			31,120			29,815
Excess consideration over the amounts assigned to the net assets acquired (goodwill)	$	4,905		$	13,351		$	1,331		$	10,713		$	2,468

*The above purchase price allocation is tentative and preliminary and subject to further updates as we complete the purchase price allocation.