Acquisitions (Tables)

9 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [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 third quarter and first nine months of fiscal 2023 on an unaudited pro forma basis, as if the RPS acquisition had been consummated at the beginning of fiscal 2023 (in thousands):

	Three Months Ended		Nine Months Ended
	July 2, 2023		July 2, 2023
Revenue	$	1,208,947	$	3,519,792
Net income including noncontrolling interests	61,770		104,564

Schedule of estimated contingent earn out liabilities

The following table summarizes the changes in the fair value of estimated contingent consideration (in thousands):

	Three Months Ended				Nine Months Ended
	June 30, 2024		July 2, 2023		June 30, 2024		July 2, 2023
Beginning balance	$	74,579	$	88,082	$	73,422	$	65,566
Estimated earn-out liabilities for acquisitions	1,138		—		23,038		12,248
Payments of contingent consideration	(7,000)		(13,078)		(29,112)		(15,078)
Adjustments to fair value recorded in earnings	500		—		477		8,477
Interest accretion expense	1,038		707		1,953		1,919
Effect of foreign currency exchange rate changes	28		888		505		3,467
Ending balance	$	70,283	$	76,599	$	70,283	$	76,599
Maximum potential payout at end of period	$	128,573	$	120,320	$	128,573	$	120,320