Acquisitions

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

EBI Acquisition

On November 30, 2021, the Company acquired all of the outstanding shares of EBI for a purchase price of $67.8 million, consisting of $66.3 million of cash and $1.5 million of contingent consideration recorded at fair value. The contingent consideration is limited to a maximum of $8.5 million of additional payments, to be determined based on actual future results. As of December 31, 2021, the fair value of this contingent consideration totaled $1.5 million and consisted of $0.9 million for an earn-out payable two years after the acquisition based upon revenue retention and $0.6 million payable throughout the year following the acquisition based on customer collections on receivables acquired. As of December 31, 2022, the fair value of this contingent consideration totaled $1.2 million and consisted of the $0.9 million earn-out and $0.3 million remaining payable throughout the year following the acquisition based on customer collections on acquired receivables. The Company recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed

based on their estimated fair values as of November 30, 2021. As of December 31, 2022, the purchase price was reduced by $0.3 million reflecting the final determination of the post-closing adjustment of the purchase price in accordance with the purchase agreement with EBI, resulting in an adjusted purchase price of $67.5 million. The receivable related to this adjustment was collected in February 2023.

Revenues and net earnings attributable to EBI for the year ended December 31, 2021 were immaterial to the Company’s total operating results for such period.

The Company incurred approximately $1.9 million of transaction expenses related to the acquisition of EBI during the year ended December 31, 2021.

The allocation of the purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date. The following table summarizes the consideration paid and the amounts recognized for the assets acquired and liabilities assumed:

	Preliminary Purchase Price Allocation				Final Purchase Price Allocation
(in thousands)	November 30, 2021		Purchase Price Adjustments		December 31, 2022
Consideration
Cash	$	—	$	—	$	—
Other current assets
Accounts receivable	8,861		—		8,861
Prepaid expenses	394		—		394
Property and equipment	1,290		—		1,290
Intangible assets	59,161		—		59,161
Total assets acquired	$	69,706	$	—	$	69,706
Accounts payable and accrued expenses	5,614		—		5,614
Other current liabilities	1,182		—		1,182
Deferred tax liability	16,566		(215)		16,351
Other liabilities	298		—		298
Total liabilities assumed	$	23,660	$	(215)	$	23,445
Total identifiable net assets	46,046		215		46,261
Goodwill	21,721		(515)		21,206
Total consideration	$	67,767	$	(300)	$	67,467

Goodwill recognized is primarily attributable to assembled workforce and expected synergies and is not tax deductible in future years. Intangible assets acquired consist largely of customer lists in the amount of $56.0 million to be amortized over 15 years. The remaining intangible assets include trade names and a non-compete agreement, which will be amortized over two years and five years, respectively.

The following unaudited pro forma results for the years ended December 31, 2020 and 2021 show the effect on the Company’s revenues as if the acquisition of EBI had occurred on January 1, 2020. The pro forma results presented are the result of combining the revenues of the Company with the revenues of EBI. Pro forma net operating results are not presented as they were determined to not be material to the total net operating results of the Company. The Company did not have any material, non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue.

	For the Years Ended
	December 31,
(in thousands)	2020		2021
Revenues	$	485,342	$	679,542

The pro forma information above is presented for illustrative purposes only and may not be indicative of the future results or results of operations that would have actually occurred had the acquisition of EBI occurred as presented. Further, the above pro forma amounts do not consider any potential synergies that may result from the transaction. In addition, future results may vary significantly from the results reflected in such pro forma information.