Business Acquisition (Notes)

12 Months Ended

Dec. 28, 2019

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Business Acquisition

On October 25, 2019, we acquired all of the issued and outstanding membership interests of AbleVets, LLC, a Virginia limited liability company ("AbleVets"). AbleVets is a health IT engineering and consulting company specializing in cybersecurity, cloud and system development solutions for federal organizations. We believe this acquisition enhances our resource capabilities and growth opportunities within our federal business. These factors, combined with the synergies and economies of scale expected from combining the operations of AbleVets, are the basis for acquisition and comprise the resulting goodwill recorded.

Consideration for the acquisition was $75 million in cash. The purchase price is subject to post-closing adjustments for working capital and certain other adjustments, as specified in the Purchase Agreement dated October 17, 2019, as amended.

The acquisition of AbleVets is being treated as a purchase in accordance with ASC 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase price is based on management's judgment after evaluating several factors, including a valuation assessment. The allocation of purchase price is subject to changes as working capital and certain other adjustments are agreed upon and finalized, and additional information becomes available; however, we do not expect material changes. The following is a summary of the preliminary allocation of purchase price:

(In thousands)	Allocation Amount
Cash and cash equivalents	$	471
Receivables, net	11,690
Prepaid expenses and other	911
Property and equipment, net	1,240
Right-of-use assets	8,448
Goodwill	37,071
Intangible assets, net	37,402
Accounts payable	(5,244		)
Deferred revenue	(157		)
Accrued payroll and tax withholdings	(5,812		)
Other current liabilities	(2,994		)
Other liabilities	(8,016		)
Total purchase price	$	75,010

The fair values of the acquired intangible assets were estimated by applying the income approach. Such estimations required the use of inputs that were unobservable in the marketplace (Level 3), including a discount rate that we estimated would be used by a market participant in valuing these assets, projections of revenues and cash flows, and client attrition rates, among others. Refer to Note (11) for further information about the fair value level hierarchy.

The goodwill was allocated to our Domestic operating segment and is expected to be deductible for tax purposes. Identifiable intangible assets primarily consist of customer relationship intangible assets and are being amortized over a weighted-average period of 8 years. The operating results of AbleVets were combined with our operating results subsequent to the purchase date of October 25, 2019. Pro-forma results of operations, assuming this acquisition was made at the beginning of the earliest period presented, have not been presented because the effect of this acquisition was not material to our results.