How do you interpret infrastructure solutions — working capital transfer?

A positive transfer indicates the seller delivered more working capital than required, while a negative transfer indicates a shortfall.

How does infrastructure solutions — working capital transfer compare across companies?

Common in all M&A transactions involving private company acquisitions.

IES Holdings, Inc. IESC Infrastructure Solutions — Working Capital Transfer

Discontinued — last reported Q3 '15

Similar metrics at other companies

CACISystems Engineering And Acquisition Support Services Business — Business Combination Consideration Transferred Initial Net Working Capital Payment

$6M—

BRKRVarious — Business Combination Consideration Transferred Working Capital Adjustment

-$400K—

RVTYDiscovery Analytical Solutions — Business Acquisition Cost Of Acquired Entity Working Capital Adjustments

$0—

RVTYEnvironmental Health — Business Acquisition Cost Of Acquired Entity Working Capital Adjustments

$0—

EWPayment for working capital adjustment for sale of product group

$0-100%

DTEGas Storage and Pipelines — Goodwill, working capital adjustments

$1M—

Other financials

Income statement

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Revenue$974.3M+16.8%

Gross profit$254.8M+22.0%

Operating income$112.3M+21.1%

Net income$110.3M+52.0%

EPS (diluted)$5.44+55.4%

Balance sheet

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Cash & equivalents$48.7M+117%

Total debt$107.4M+108%

Total equity$1.1B+52.0%

Total assets$2.0B+46.1%

Cash flow

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Operating cash flow$103.3M+316%

CapEx$31.8M+87.8%

Free cash flow$71.5M+805%

Valuation

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Market cap$14.19B+187%

Enterprise value$14.25B+187%

P/E37.6×+17.7×

P/S3.9×+2.3×

Profitability

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Gross margin26.1%+1.5pp

Operating margin11.7%+1.1pp

Net margin10.4%+2.4pp

FCF margin6.6%+1.0pp

Returns & leverage

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Return on equity42.5%+2.3pp

Debt / equity0.1×0.0×

Current ratio1.6×-0.1×

Where this comes from

Reported directly by IES Holdings, Inc. in its filing.

Tagged under the XBRL concept iesc:WorkingCapitalTransfer.

The official record: IES Holdings, Inc.’s 10-Q, filed August 8, 2016, on SEC EDGAR. View the filing →

Questions, answered.

What does infrastructure solutions — working capital transfer mean?: The cash adjustment made to an acquisition price to account for differences in the target company's working capital at closing.
How do you interpret infrastructure solutions — working capital transfer?: A positive transfer indicates the seller delivered more working capital than required, while a negative transfer indicates a shortfall.
How does infrastructure solutions — working capital transfer compare across companies?: Common in all M&A transactions involving private company acquisitions.