v3.26.1
Acquisitions
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisitions
Pioneer Power Transaction
On July 1, 2025 (the “Pioneer Power Effective Date”), LFS and the former owners of Pioneer Power (the “Pioneer Power Seller”) entered into a Purchase Agreement (the “Pioneer Power Purchase Agreement”) pursuant to which LFS purchased all of the outstanding equity interests in Pioneer Power from the Pioneer Power Seller (the “Pioneer Power Transaction”). Prior to the acquisition, Pioneer Power was 100% owned through an employee stock ownership plan. The Pioneer Power Transaction closed on the Pioneer Power Effective Date. As a result of the Pioneer Power Transaction, Pioneer Power became a wholly-owned indirect subsidiary of the Company. Pioneer Power is a provider of industrial and institutional mechanical solutions serving healthcare, food, power/utility, oil refining and other select markets in the greater Twin Cities region of Minnesota and upper Midwest region. The acquisition further expanded the Company’s footprint in the core Midwest and extends its reach into new geographic markets in the upper Midwest regions.
Total purchase price paid by the Company for the Pioneer Power Transaction at closing was $66.1 million (the “Pioneer Power Closing Purchase Price”), which was funded through a combination of available cash on hand and borrowings under the Company's revolving credit facility. The payment was subject to typical adjustments for working capital. Of the consideration paid to the Pioneer Power Seller, approximately $4.1 million was held in escrow for indemnification purposes. The purchase price was subject to customary post-closing adjustments.
Allocation of Purchase Price. The Pioneer Power Transaction was accounted for as a business combination using the acquisition method. As a result of the acquisition, the Company recognized $37.5 million of goodwill, which was allocated between the Company's ODR and GCR segments and is fully deductible for tax purposes. Such goodwill primarily related to anticipated future earnings. The fair value estimates for the assets acquired and liabilities assumed, as well as the Company's estimates and assumptions, are subject to change as the Company obtains additional information during the measurement
period. Measurement period adjustments are reflected as if the adjustments had been made as of the Pioneer Power Effective Date. The impact of all changes that do not qualify as measurement period adjustments have been included in current period earnings.
The following table summarizes the purchase price and estimated fair values of assets acquired and liabilities assumed as of the Pioneer Power Effective Date, with any excess of purchase price over estimated fair value of the identified net assets acquired recorded as goodwill.
(in thousands)Purchase Price AllocationMeasurement Period AdjustmentsAdjusted Purchase Price Allocation
Consideration:
Cash$66,612 $— $66,612 
Total Consideration66,612 — 66,612 
Fair value of assets acquired:
Cash and cash equivalents961 — 961 
Accounts receivable18,416 — 18,416 
Contract assets(1)
4,176 920 5,096 
Other current assets58 — 58 
Property and equipment6,291 — 6,291 
Intangible assets16,200 — 16,200 
Amount attributable to assets acquired46,102 920 47,022 
Fair value of liabilities assumed:
Accounts payable, including retainage8,071 — 8,071 
Accrued expenses and other current liabilities1,527 — 1,527 
Contract liabilities(1)
6,506 1,843 8,349 
Amount attributable to liabilities assumed16,104 1,843 17,947 
Goodwill$36,614 $923 $37,537 
(1)    Measurement period adjustments recorded during the quarters ended March 31, 2026 and December 31, 2025 reflect changes to the fair value of contract assets acquired and contract liabilities assumed, resulting in a net increase of approximately $0.1 million and $0.9 million, respectively, to goodwill.
As of March 31, 2026, the allocation of the purchase price has not been finalized with respect to the valuation of identifiable intangible assets acquired, the fair value of certain tangible assets acquired and liabilities assumed, goodwill and tax related matters. A final determination of the fair value of assets acquired and liabilities assumed relating to the acquisition could differ from the preliminary purchase price allocation. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable, but no later than one year from the Pioneer Power Effective Date.
Impact of Acquisitions on the Company’s Financial Statements
The acquisition of Pioneer Power contributed $23.5 million of total revenue for the three months ended March 31, 2026. Pioneer Power did not have a material contribution to net income for the three months ended March 31, 2026. Pioneer Power operates at a lower gross margin profile relative to the Company’s legacy ODR operations. Management continues to integrate Pioneer Power into the Company’s broader operating model with the objective of enhancing operating efficiencies and improving profitability over time.