Business Combinations and Divestitures

6 Months Ended

Mar. 31, 2020

Business Combination Disclosure [Text Block]

14. BUSINESS COMBINATIONS AND DIVESTITURES

The Company completed two acquisitions during the six months ended March 31, 2020 for a total aggregate cash consideration of $28,952.

• Aerial Lighting & Electric, Inc. (“Aerial”) – On February 18, 2020, we acquired 100% of the equity interests in Aerial, a Naugatuck, CT based electrical contractor specializing in the design and installation of electrical systems for multi-family developments. The acquisition of Aerial furthers our Residential segment's growth strategy by providing a foothold in the Northeast market.

• Plant Power & Control Systems, LLC (“PPCS”) – On February 21, 2020, we acquired 100% of the membership interests in PPCS, a Birmingham, AL based manufacturer and installer of custom engineered power distribution equipment. The acquisition of PPCS furthers our Infrastructure Solutions segment's growth strategy by accelerating their expansion in the Southeast market.

The Company accounted for the transactions under the acquisition method of accounting, which requires recording assets and liabilities at fair value (Level 3). The valuations derived from estimated fair value assessments and assumptions used by management are preliminary pending finalization of certain tangible and intangible asset valuations and assessment of deferred taxes. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different values being assigned to individual assets acquired and liabilities assumed. This may result in adjustments to the preliminary amounts recorded. The preliminary valuation of the assets and liabilities assumed is as follows:



Current assets	$	6,127
Property and equipment		489
Intangible assets		19,743
Goodwill		9,920
Current liabilities		(4,873)

Deferred tax liability		(2,454)
Net assets acquired	$	28,952

With regard to goodwill, the balance is attributable to the workforce of the acquired business and other intangibles that do not qualify for separate recognition. In connection with these acquisitions, we acquired goodwill of $9,920 of which $3,906 is tax deductible.

These acquisitions contributed $4,956 in additional revenue and $527 in operating income during the three and six months ended March 31, 2020.

Unaudited Pro Forma Information

The following unaudited supplemental pro forma results of operations for the three and six months ended March 31, 2020 and 2019 are calculated as if each acquisition occurred as of October 1 of the fiscal year prior to consummation.


		Unaudited
		Three Months Ended March 31,
		2020		2019
Revenues	$	298,777	$	266,093
Net income attributable to IES Holdings, Inc.		$	6,982	$	5,600

		Unaudited
		Six Months Ended March 31,
		2020		2019
Revenues	$	584,484	$	518,386
Net income attributable to IES Holdings, Inc.		$	16,133	$	12,704