Acquisitions

ECS Acquisition

On April 2, 2018, the Company acquired all of the outstanding equity interests of ECS Federal, LLC ("ECS") for $775.0 million. Acquisition expenses were approximately $12.0 million and were included in SG&A expenses. ECS, which is headquartered in Fairfax, Virginia, is a leading provider of government IT services and solutions. The ECS acquisition allows the Company to compete in the Federal IT and professional services sector. ECS is reported as a separate segment of the Company.

The results of operations of ECS have been included in the consolidated results of the Company from the date of acquisition. The consolidated statements of operations and comprehensive income for the year ended December 31, 2018 included revenues from ECS of $493.0 million and income before income taxes of $14.2 million, respectively.

Assets and liabilities of all acquired companies are recorded at their estimated fair values at the dates of acquisition. The fair value assigned to identifiable intangible assets was primarily determined using a discounted cash flow method (a non-recurring fair value measurement based on Level 3 inputs). Goodwill represents the acquired assembled workforce, potential new customers and future cash flows after the acquisition. Goodwill related to this acquisition totaled $528.2 million, of which $514.2 million is estimated to be deductible for income tax purposes. Preliminary fair values of assets acquired and liabilities assumed have been updated for working capital adjustments, deferred taxes and completion of the valuation of identifiable intangible assets. The purchase accounting for this acquisition has been finalized.

The following table summarizes the consideration paid and the fair value of assets acquired and liabilities assumed (in thousands):



Cash	$	12,400
Accounts receivable	97,167
Prepaid expenses and other current assets	8,568
Property and equipment	28,977
Identifiable intangible assets	194,950
Goodwill	528,207
Other non-current assets	1,282
Total assets acquired	871,551

Current liabilities	94,667
Long-term liabilities	4,268
Total liabilities assumed	98,935

Total purchase price	$	772,616

The following table summarizes the acquired identifiable intangible assets of ECS (in thousands):



	Useful life
Contractual customer relationships	12.75 years	$	144,600
Backlog	2.75 years	23,100
Non-compete agreements	4 to 7 years	10,250
Favorable contracts	5 years	500
Trademarks	indefinite	16,500
Total identifiable intangible assets acquired		$	194,950

The weighted-average amortization period for identifiable intangible assets, excluding trademarks, is 11 years.

The summary below (in thousands, except for per share data) presents pro forma unaudited consolidated results of operations for the years ended December 31, 2018 and 2017 as if the acquisition of ECS by the Company and the acquisition of a business by ECS in April 2017, both occurred on January 1, 2017. The pro forma unaudited consolidated results give effect to, among other things: (i) amortization of intangible assets, (ii) stock-based compensation expense and the related dilution for restricted stock units granted to ECS employees, (iii) interest expense on acquisition-related debt and (iv) the exclusion of nonrecurring expenses incurred by ECS prior to its acquisition by the Company for ECS’ acquisition-related activities and costs incurred in the sale of ECS to the Company. The pro forma unaudited consolidated results are not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of the date indicated, nor are they necessarily indicative of future operating results.



	2018		2017
Revenues	$	3,548,820	$	3,213,465
Income from continuing operations	$	169,604	$	134,830
Net income	$	169,326	$	134,632

Earnings per share:
Basic	$	3.24	$	2.57
Diluted	$	3.19	$	2.53

Number of shares and share equivalents used to calculate earnings per share:
Basic	52,353		52,503
Diluted	53,164		53,245

Stratacuity Acquisition

On August 8, 2017, the Company acquired all of the outstanding shares of StratAcuity Staffing Partners, Inc. ("Stratacuity") headquartered in New Hampshire for $25.9 million. Acquisition expenses of approximately $0.5 million were included in SG&A expenses in 2017. Stratacuity was purchased to expand the Company's specialized clinical/scientific staffing solutions for biotechnology and pharmaceutical organizations. Goodwill associated with this acquisition totaled $17.5 million and is deductible for income tax purposes. Identifiable intangible assets related to this acquisition totaled $7.6 million. The results of operations for this acquisition have been combined with those of the Company from the acquisition date. Revenues and income before income taxes from Stratacuity of $7.5 million and $0.6 million, respectively, were included in the consolidated statement of operations and comprehensive income for 2017. The purchase accounting for this acquisition has been finalized. Stratacuity is included in the Apex segment.