Booz Allen Hamilton Holding Corp
For the period ended Dec 31, 2023. Filed Jan 26, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2023 · Filed Jan 26, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
5. Acquisition, Goodwill and Intangible Assets
- Acquisition, Goodwill and Intangible Assets
Acquisition
On October 14, 2022, the Company completed the acquisition of EverWatch Corp. (“EverWatch”), a leading provider of advanced solutions to the defense and intelligence communities for approximately $445.1 million, net of post-closing adjustments and incurred transaction costs as part of the acquisition. The acquisition was funded with cash on hand. As a result of the transaction, EverWatch became a wholly owned subsidiary of Booz Allen Hamilton Inc.
The Company recognized $108.6 million of intangible assets which consists primarily of contract assets and were valued using the excess earnings method discounted cash flow approach, incorporating Level 3 inputs as described under the fair value hierarchy of Topic 820. These unobservable inputs reflect the Company's own judgment about which assumptions market participants would use in pricing an asset on a non-recurring basis. The intangible assets are being amortized over the estimated useful life of 14 years. The goodwill of $330.9 million is primarily attributable to EverWatch's specialized workforce and the expected synergies between the Company and EverWatch, and is non-deductible for tax purposes.
The following table summarizes the consideration and the allocation of the purchase price paid for EverWatch:
| Cash consideration (gross of cash acquired) | $445,074 |
|---|---|
| Purchase price allocation: | |
| Cash | 4,779 |
| Current assets | 27,725 |
| Operating lease right-of-use asset | 7,894 |
| Other long-term assets | 5,078 |
| Intangible assets | 108,600 |
| Deferred tax liabilities | (20,394) |
| Current liabilities | (11,612) |
| Operating lease liabilities - short-term | (1,362) |
| Operating lease liabilities - long-term | (6,532) |
| Total fair value of identifiable net assets acquired | $114,176 |
| Goodwill | $330,898 |
The acquisition was accounted for under the acquisition method of accounting, which requires the total acquisition consideration to be allocated to the assets acquired and liabilities assumed based on an estimate of the acquisition date fair value, with the difference reflected in goodwill. During the first quarter of fiscal 2024, the Company completed the determination of fair values of the acquired assets and liabilities assumed. Pro forma results of operations for this acquisition are not presented because the acquisition is not material to the Company's consolidated results of operations.
Goodwill
As of December 31, 2023 and March 31, 2023, goodwill was $2,343.8 million and $2,338.4 million, respectively. The $5.4 million increase in the carrying amount of goodwill was attributable the Company's finalization of the accounting for the acquisition of EverWatch.
Intangible Assets
Intangible assets consisted of the following:
| December 31, 2023 | March 31, 2023 | |||||
|---|---|---|---|---|---|---|
| Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |
| Amortizable intangible assets: | ||||||
| Programs and contract assets, channel relationships, and other amortizable intangible assets | $591,894 | $220,557 | $371,337 | $599,794 | $169,316 | $430,478 |
| Software | 145,613 | 87,996 | 57,617 | 134,152 | 69,215 | 64,937 |
| Total amortizable intangible assets | $737,507 | $308,553 | $428,954 | $733,946 | $238,531 | $495,415 |
| Unamortizable intangible assets: | ||||||
| Trade name | $190,200 | $— | $190,200 | $190,200 | $— | $190,200 |
| Total | $927,707 | $308,553 | $619,154 | $924,146 | $238,531 | $685,615 |
The decrease in the gross carrying value of amortizable intangible assets (excluding software) was primarily attributable to a $7.9 million adjustment related to the Company's finalization of the accounting for the acquisition of EverWatch in the first quarter of fiscal 2024.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.