v3.26.3
Acquisition
 9 Months Ended
Sep. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisition Acquisition
Valley Holdings I, Inc.
On July 1, 2026, the Company acquired all issued and outstanding shares of capital stock of Valley Holdings I, Inc. and its subsidiaries (collectively, “Valley"), a full-service electrical contractor based in Everett, Washington. The Company paid initial cash consideration of $325.4 million at closing, net of cash acquired, funded through a combination of approximately $93.0 million of cash on hand and the remaining amount borrowed under its Prior Revolving Facility (as defined in Note 6—Debt), which initial consideration was subsequently reduced by $0.6 million for estimated net asset and other adjustments for total consideration of $324.8 million.
The purchase agreement for the Valley acquisition provides for additional contingent consideration, which may become payable based on the achievement of certain performance targets over a three-year post-acquisition period. As of the acquisition date, the fair value of the contingent consideration was $2.0 million. The future payout of the contingent consideration, if any, is unlimited and could be significantly higher than the acquisition date fair value. If the minimum thresholds of the performance targets are achieved, the contingent consideration payment will be approximately $22.5 million. There were no changes in contingent earn-out consideration, subsequent to the acquisition, for the three months ended September 30, 2026. The purchase agreement for the Valley acquisition also provides for additional contingent compensation for key executives of Valley, which may become payable based on the achievement of certain performance targets and continued employment of certain key executives of Valley over three- and five-year post-acquisition periods. The related contingent compensation expense will be recognized in the consolidated statements of operations over the post-acquisition periods, using a calculated estimate that may increase or decrease based on Valley's financial results for such periods. For the three months ended September 30, 2026, the Company recognized $0.7 million of compensation expense associated with these contingent payments. The results of the Valley acquisition were included in the Company’s consolidated financial statements beginning on the transaction date. During the three and nine months ended September 30, 2026, the Company recognized approximately $0.1 million and $1.4 million, respectively, of acquisition-related costs associated with this acquisition, which were recorded in selling, general and administrative expenses on the Company’s consolidated statement of operations.
The purchase agreement for the Valley acquisition also provides for additional contingent consideration for downside margin guarantee adjustments, and downside and upside margin guarantee adjustments for a certain project, which are based upon certain contract performance subsequent to the acquisition. The contracts were valued at fair value at the acquisition date, causing no margin guarantee estimate or adjustments for fair value. Unfavorable changes in contract estimates, such as modified costs to complete or change order recognition, will result in changes to these margin guarantee estimates. Changes in margin guarantee adjustments on contracts subsequent to the acquisition will be recorded in other income. The Company did not record any margin guarantee adjustments during the three months ended September 30, 2026. Future margin guarantee adjustments, if any, are expected to be recognized over a three-year post-acquisition period.
The following table summarizes the preliminary allocation of the opening balance sheet as of the date of the Valley acquisition through September 30, 2026:
(in thousands)July 1, 2026 acquisition date (initial estimates)
Cash paid$331,043 
Contingent consideration - fair value at acquisition date2,000 
Preliminary estimated net asset and other adjustments(636)
Total consideration, net of estimated net asset adjustments332,407 
Less: Acquired cash(5,619)
Total consideration less cash acquired, net of estimated net asset and other adjustments$326,788 
Cash and cash equivalents$5,619 
Accounts receivable97,662 
Contract assets, net56,053 
Prepaid expenses and other current assets2,078 
Property and equipment9,737 
Intangible assets168,000 
Operating lease right-of-use assets9,875 
Other assets1,185 
Current portion of long-term debt(162)
Accounts payable(36,705)
Contract liabilities, net(35,389)
Current portion of operating lease obligations(1,974)
Current portion of finance lease obligations(206)
Accrued salaries and benefits(6,971)
Other current liabilities(1,085)
Deferred income tax liabilities(37,507)
Operating lease obligations, net of current maturities(7,591)
Finance lease obligations, net of current maturities(581)
Long-term debt(126)
Total identifiable assets and liabilities221,912 
Goodwill$110,495 
The following table summarizes the estimated fair value of identifiable intangible assets and the related weighted average amortization periods as of the date of the Valley acquisition.
Estimated Fair Value at Acquisition DateWeighted Average Amortization Period at Acquisition Date
(in thousands)(in years)
Amortizable Intangible Assets
Customer relationships$100,000 12.0
Backlog25,000 2.3
Total amortizable intangible assets125,000 11.6
Indefinite-lived Intangible Assets
Trade name43,000 Indefinite
Total intangible assets$168,000 
The Company has developed preliminary estimates of fair value of the assets acquired and liabilities assumed for the purposes of allocating the purchase price. During the three months ended September 30, 2026, the Company recorded certain measurement period adjustments related to various working capital, property and equipment, intangible asset and deferred tax accounts determined during our purchase price allocation procedures. The goodwill to be recognized, which represents the excess of the purchase price over the net amount of the fair value assigned to assets acquired and liabilities assumed, is primarily attributable to the value of an assembled workforce and other non-identifiable assets. No synergies were anticipated in the acquisition as Valley will function as an individual business within the Company’s operating structure. Further adjustments are expected to the allocation as deferred taxes, net asset adjustments and third-party valuations of contingent earn-out consideration, acquired right-of-use assets and lease liabilities and identifiable intangible assets, including backlog, customer relationships, trade name and off-market components, are finalized. The Company expects $3.6 million of goodwill to be deductible for tax purposes.