Company: HCKT
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-030037
Chunk: 95

Company: HACKETT GROUP, INC.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 95
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 Combinations

For transactions that are considered business combinations, we utilize fair values in determining the carrying values of the purchased assets and assumed liabilities, which are recorded at fair value at acquisition date, and identifiable intangible assets are recorded at fair value. Costs directly related to the business combinations are recorded as expenses as they are incurred. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values become available. A bargain purchase gain on an acquisition occurs when the net of the estimated fair value of the assets acquired and liabilities assumed exceeds the consideration paid.

          On September 23, 2024, the Company acquired 100% of the equity of LeewayHertz Technologies Private Limited (“LeewayHertz”), a technology consulting company based in India, focused on AI technology solutions for a provisional purchase consideration of $7.8 million subject to a working capital achievement. LeewayHertz’s founder, one of LeewayHertz’s owners, was hired by the Company to serve as its executive vice president of the AI practice.  

           Since the acquisition was only recently completed, the allocation of the purchase price is preliminary and will likely change in future periods as fair value estimates of the assets acquired and liabilities assumed are finalized, including those primarily related to working capital, property and equipment, intangible assets, and taxes.  The final determination of the fair values will be completed within the one-year measurement period.

           The following table summarizes the provisional fair value of the assets acquired and liabilities assumed:

    Amount

    Assets / Liabilities
     
    (in thousands)

    Cash
     
    $
    1,020

    Current assets

    2,081

    Intangible assets

    2,500

    Current liabilities

    (2,587
    )

    Other liability

    (432
    )

    Deferred tax liability

    (652
    )

    Net assets acquired
     
    $
    1,930

    Consideration
     
    $
    7,806

    Goodwill
     
    $
    5,876

        As a result, the provisional excess of the purchase price over the assets acquired resulted in goodwill of $5.9 million. Additionally, the Company recognized provisional intangible assets of $2.5 million, with a remaining weighted average useful life of 4.6 years. The fair values of identifiable intangible assets acquired were prepared by a third-party valuation specialist and