ACQUISITIONS AND DISPOSITIONS

12 Months Ended

Oct. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition of RavenVolt

On September 1, 2022, we completed the acquisition of all of the equity interests of RavenVolt, Inc. (“RavenVolt”), a nationwide provider of advanced turn-key microgrid systems utilized by diversified commercial and industrial customers, national retailers, utilities, and municipalities. RavenVolt’s operations are included within our Technical Solutions segment. The transaction met the definition of a business combination. We applied the acquisition method of accounting.

The initial purchase price for the acquisition was approximately $170.0 million in cash at closing (subject to customary working capital and net debt adjustments) plus the potential of post-closing contingent consideration of up to $280.0 million. The post closing contingent consideration is payable in cash in calendar years 2024, 2025, and 2026 if RavenVolt’s earnings before interest, taxes, depreciation, and amortization (EBITDA), as defined in the RavenVolt merger agreement, meets or exceeds certain defined targets. The maximum contingent consideration that is payable in calendar years 2024, 2025, and 2026 is $75.0 million, $75.0 million, and $130.0 million, respectively. If the EBITDA achieved for calendar years 2023 - 2025 cumulatively meets the defined EBITDA targets, the entire $280.0 million would be paid in calendar year 2026, minus any earn-out payments made in 2024 and 2025.

To estimate the fair value of the contingent consideration on the date of acquisition, we used the Real Options method. The key assumptions used in our valuation were: i) forecast of revenues and EBITDA margins; ii) the volatility associated with the EBITDA; iii) risk-adjusted discount rate applied to forecasted EBITDA; and (iv) the credit-adjusted discount rate related to the payment of the contingent consideration. A simulation of one million scenarios was performed with the assistance of a third-party valuation specialist, resulting in a fair value for the cumulative contingent consideration for calendar years 2023 through 2025 totaling $59.0 million. There were no material adjustments to the fair value of the contingent consideration from September 1, 2022 to October 31, 2022.

At October 31, 2023, the estimate of the fair value of the contingent consideration was $13.4 million. Results of operations subsequent to the acquisition date and changes to management’s forecasts, as well as the accretion of the liability, resulted in a total decrease in fair value of $45.6 million. This decrease is recognized within the “Selling, general and administrative expenses” of the Consolidated Statements of Comprehensive Income. We do not expect the RavenVolt business to achieve the financial targets for calendar year 2023, and as such we do not expect contingent consideration to be payable in the next 12 months.

Final Acquisition Accounting

The assets acquired and liabilities assumed were recognized at their acquisition date fair values. Goodwill arising from the RavenVolt Acquisition is not deductible for tax reporting purposes. There were no material changes made to preliminary acquisition accounting.

The following table summarizes the final acquisition accounting:


(in millions)


Cash and cash equivalents	$	29.0
Trade accounts receivable	16.5
Other assets	3.8
Intangible assets	16.7
Goodwill	207.4
Trade accounts payable	(5.2)
Deferred revenue	(31.6)
Other accrued liabilities	(3.2)
Deferred income tax liability, net	(4.5)
Net assets acquired	$	228.9

Acquisition of Momentum

Effective April 7, 2022, we acquired Maybin Support Services Limited, Momentum Support Limited (UK), and Momentum Property Support Services Limited (collectively “Momentum”), a leading independent provider of

facility services, primarily janitorial, across Ireland and Northern Ireland, for a purchase price of approximately $54.8 million. We have completed the acquisition accounting, and recorded final goodwill and intangibles of $42.9 million and $10.4 million, respectively. The total assets acquired, excluding goodwill and intangibles, and liabilities assumed amounted to $20.4 million and $18.9 million, respectively. Goodwill is not deductible for income tax purposes. There were no material changes made to preliminary acquisition accounting.

Disposition of Assets

During 2022, we sold a group of customer contracts for healthcare technology management within our Technical Solutions segment for $8.5 million and recognized a gain of $7.6 million, which is included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income.

Acquisition of Able

On September 30, 2021, we completed the Able Acquisition for a net cash purchase price of $741.7 million. Pursuant to the terms of the purchase agreement, approximately $12.1 million of the cash consideration was placed into escrow accounts, of which approximately $8.2 million was placed into escrow to satisfy any applicable indemnification claims for a period of 12 months. To fund the cash purchase price, we used cash on hand and borrowed $325.0 million on September 30, 2021, at an average interest rate of 1.58% from our revolving line of credit.