2. Acquisitions

Western Pacific Enterprises Ltd.

On October 28, 2016, the Company completed the acquisition of substantially all of the assets of Western Pacific Enterprises GP and of Western Pacific Enterprises Ltd., except for certain real estate owned by Western Pacific Enterprises Ltd., with the company continuing operations under the name Western Pacific Enterprises Ltd. (“WPE”), an electrical contracting firm in western Canada. With its main headquarters in Coquitlam, British Columbia, WPE provides a wide range of commercial and industrial electrical construction capabilities under the Company’s C&I segment. WPE also provides substation construction capabilities under the Company’s T&D segment. The total consideration paid was approximately $12.1 million, which was funded through borrowings from our line of credit. Total consideration paid included $2.2 million subject to potential net asset adjustments once finalized by the end of 2017 as stipulated in the purchase agreement. These net asset adjustments were approximately $0.8 million as of the October 28, 2016 closing date and as of March 31, 2017. The Company accounted for the net asset adjustments as a reduction to consideration paid and will be funded through our escrow, established at the time of purchase.

The purchase agreement also includes contingent consideration provisions for margin guarantee adjustments based upon performance subsequent to the acquisition on certain contracts. Contingent consideration of approximately $0.9 million related to the margin guarantee adjustments on certain contracts was recorded in other income for the three months ended March 31, 2017. Future margin guarantee adjustments, if any, are expected to be completed by the end of 2017. There could also be contingent compensation payments based on the successful achievement of certain performance targets and continued employment of certain key executives of WPE. These payments are recognized as compensation expense in the consolidated statement of operations as incurred. The Company has recognized approximately $0.2 million of compensation expense associated with these contingent payments since the acquisition.

The results of operations for WPE are included in the Company’s consolidated statement of operations and the C&I segment from the date of acquisition. Costs of approximately $0.4 million related to the acquisition were included in selling, general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2016.

The following table summarizes the allocation of the opening balance sheet from the date of acquisition through March 31, 2017:

	(as of				Adjusted
	acquisition date)		Measurement		acquisition
	October 28,		Period		amounts as of
(in thousands)	2016		Adjustments		March 31, 2017

Total consideration, net of net asset adjustments	$	11,283	$	—	$	11,283

Accounts receivable, net	$	20,249	$	—	$	20,249
Costs and estimated earnings in excess of billings on uncompleted contracts		1,610		—		1,610
Other current assets		8		—		8
Property and equipment		4,108		—		4,108
Accounts payable		(10,125)		—		(10,125)
Billings in excess of costs and estimated earnings on uncompleted contracts		(3,020)		—		(3,020)
Other current liabilities		(2,294)		—		(2,294)
Net identifiable assets		10,536		—		10,536
Unallocated intangible assets	$	747	$	—	$	747

The Company has developed preliminary estimates of fair value of the assets acquired and liabilities assumed for the purposes of allocating the purchase price. Further adjustments are expected to the allocation as third party valuations of identifiable intangible assets, including backlog, customer relationships, trade name and off-market component, are determined, and as net asset adjustments are finalized. A portion of the unallocated intangible assets are expected to be tax deductible per applicable Canadian Revenue Authority regulations. The Company expects to complete the purchase accounting in the second half of 2017.