Acquisitions (Tables)

6 Months Ended

Mar. 31, 2024

Business Combination and Asset Acquisition [Abstract]

Schedule of recognized identified assets acquired and liabilities assumed

The table below represents the purchase price allocation for RPS based on estimates, assumptions, valuations and other analyses as of January 23, 2023. The all cash purchase consideration, excluding the aforementioned forward contract gain, was allocated to the tangible and intangible assets, and liabilities of RPS based on their estimated fair values, with any excess purchase consideration allocated to goodwill as follows (in thousands):

	Amount
Cash and cash equivalents	$	32,093
Accounts receivable and contract assets	202,303
Prepaid expenses and other current assets	45,999
Income taxes receivables	1,999
Property and equipment	38,435
Right-of-use assets, operating leases	40,179
Intangible assets	174,094
Deferred income taxes	35,084
Other long-term assets	1,061
Total assets acquired	571,247
Accounts payable	$	(44,376)
Accrued compensation	(19,073)
Contract liabilities	(46,287)
Income tax payable	(7,083)
Short-term lease liabilities, operating leases	(13,477)
Other current liabilities	(135,474)
Current portion of long-term debt	(91,973)
Long-term lease liabilities, operating leases	(26,702)
Other long-term liabilities	(13,742)
Deferred tax liabilities	(41,613)
Total liabilities assumed	(439,800)
Fair value of net assets acquired	131,447
Goodwill	652,762
Total purchase consideration	$	784,209

Schedule of acquired finite-lived intangible assets by major class

The following table summarizes the estimated fair values that were assigned to intangible assets at the acquisition date:

	Fair Value		Weighted-Average Estimated Useful Life
	(in thousands)		(in years)
Backlog	$	27,880	1.6
Trade names	27,260		3.0
Client relations	118,954		11.1
Total intangible assets acquired	$	174,094	8.3

Business acquisition, pro forma information

Following are the supplemental consolidated financial results of Tetra Tech and RPS for the second quarter and first half of fiscal 2023 on an unaudited pro forma basis, as if the RPS acquisition had been consummated at the beginning of fiscal 2022 (in thousands):

	Three Months Ended		Six Months Ended
	April 2, 2023		April 2, 2023
Revenue	$	1,203,538	$	2,310,839
Net Income including noncontrolling interests	40,200		103,901

Schedule of estimated contingent earn out liabilities

The following table summarizes the changes in the fair value of estimated contingent consideration for the second quarters and first halves of fiscal 2024 and 2023 (in thousands):

	Three Months Ended				Six Months Ended
	March 31, 2024		April 2, 2023		March 31, 2024		April 2, 2023
Beginning balance	$	55,604	$	69,029	$	73,422	$	65,566
Estimated earn-out liabilities for acquisitions	21,900		12,248		21,900		12,248
Payments of contingent consideration	(3,250)		(2,000)		(22,112)		(2,000)
Adjustments to fair value recorded in earnings	14		7,544		(22)		8,477
Interest accretion expense	444		697		915		1,212
Effect of foreign currency exchange rate changes	(133)		564		476		2,579
Ending balance	$	74,579	$	88,082	$	74,579	$	88,082
Maximum potential payout at end of period	$	129,253	$	143,882	$	129,253	$	143,882