Business Acquisitions

9 Months Ended

Sep. 30, 2022

Disclosure Text Block Supplement [Abstract]

BUSINESS ACQUISITIONS

NOTE 4 – BUSINESS ACQUISITIONS

In April 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, plus an earnout of up to $13.5 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.

In July 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, plus an earnout of up to $16.0 million. 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.

In March 2022, the Company acquired TranSmart Technologies, Inc. (“TranSmart”) for an initial purchase price of $29.8 million which was paid in a combination of cash and shares of our Class A common stock, plus an earnout of up to $7.0 million. TranSmart specializes in Intelligent Transportation Systems (ITS) and engineering for transportation agencies and customers throughout the Midwest. TranSmart was founded in 1986 and is headquartered in Chicago, Illinois employs approximately 100 employees specializing in ITS, engineering, design and construction/program management services. The Company issued 872,752 of Class A common stock which represented $9.9 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.

In March 2022, the Company acquired 1 Alliance Geomatics, LLC (“1 Alliance”) for an initial purchase price of $22.0 million which was paid in a combination of cash and shares of our Class A common stock, plus an earnout of up to $8.3 million. 1 Alliance is a provider of geospatial services to transportation and water resources clients from its four offices within the Pacific Northwest. 1 Alliance, based in Bellevue, Washington, was founded in 2012 and employs approximately 70 people. The Company issued 355,649 of Class A common stock which represented $4.3 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 $0.0 million and $0.5 million have been expensed in the three months ended September 30, 2022 and October 1, 2021, respectively, and $0.5 million and $1.9 million for the nine months ended September 30, 2022 and October 1, 2021, 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 (in thousands):

	AEL			O’Neill			TranSmart*			1 Alliance*
Cash	$	684		$	1,608			-			-
Accounts receivable		6,026			4,201			6,244			2,489
Unbilled receivable		858			-			1,832			2,115
Property and equipment		52			1,049			139			1,733
Other current and long-term assets		130			-			298			174
Intangible assets		13,816			22,735			23,555			16,314
Liabilities		(3,065	)		(1,546	)		(5,062	)		(3,557	)
Net assets acquired	$	18,501			28,047			27,006			19,268
Consideration paid (cash and equity consideration)	$	24,502		$	24,369			25,763			16,517
Contingent earnout liability at fair value (cash)		7,045			7,106			4,000			5,500
Total Consideration		31,547			31,475			29,763			22,017
Excess consideration over the amounts assigned to the net assets acquired (goodwill)	$	13,046			3,428			2,757			2,749

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