Everus Construction Group, Inc.

Note 4 –Acquisition

On April 1, 2026, the Company acquired 100% of the issued and outstanding equity interests of SE&M Constructors, LLC, SE&M of the Triangle, LLC and SECO Rentals, LLC (collectively, “SE&M”). SE&M, founded in 1923 and headquartered in Elm City, North Carolina, provides mechanical, electrical and plumbing services to customers across a variety of sectors, including pharmaceutical, complex industrial and healthcare. The Company believes the acquisition enhances its services capabilities, expands its geographic footprint in the Southeastern U.S., where it sees strong industry tailwinds, and deepens its exposure to attractive end-markets. SE&M is included in the Company’s E&M segment.

The Company accounted for this transaction as an acquisition of a business using the acquisition method under ASC 805, Business Combinations (Topic 805).

The Company acquired SE&M for initial base consideration of $158 million, subject to certain closing adjustments, funded by cash on hand. Cash consideration paid at closing was $161.7 million, and was reflective of the initial base consideration adjusted in accordance to the terms of the purchase agreement for acquired cash, outstanding indebtedness, and target working capital. Transaction terms also allow for potential contingent consideration up to $12.0 million, or approximately 8% of the initial base consideration, based on certain post-acquisition financial performance targets over aone year period.

The Company incurred animmaterial amount and $1.3 million of acquisition-related costs in connection with the SE&M acquisition during the three and six months ended June 30, 2026, respectively, which were included in Selling, general and administrative expenses on the unaudited condensed consolidated statements of income.

Purchase Price Allocation

The Company is finalizing its purchase price allocation related to SE&M, and adjustments to the preliminary purchase price allocation may occur, since certain necessary data is not yet available to complete the purchase price allocation. Final valuations of intangible assets and goodwill acquired, contingent consideration liabilities, and the finalization of closing working capital may cause future adjustments to the preliminary purchase price allocation. The Company will finalize the purchase price allocation during the 12-month period following the acquisition date. The following table summarizes the preliminary purchase price allocation of the consideration transferred or estimated to be transferred and the acquisition-date fair value of identifiable assets acquired and liabilities assumed related to the SE&M acquisition:

Contingent Consideration

Acquisition-date fair value of the contingent consideration that is not subject to continued employment of the sellers was determined using a Monte Carlo simulation model with a risk-free rate of 3.66%, earnings before interest, taxes, depreciation and amortization (“EBITDA”) volatility of 58.00%, EBITDA risk premium of 9.16%, and a credit risk-adjusted discount rate of 7.00%. Any changes in the final valuation of the acquisition-date fair value of the contingent consideration related to additional information about facts and circumstances that existed at the acquisition date will adjust the acquisition’s purchase price allocation, since it was included as part of the preliminary consideration transferred or estimated to be transferred. However, changes in the fair value of the contingent consideration relating to periods following the acquisition date will be recognized in earnings on the unaudited condensed consolidated statements of income.

Contingent consideration that is subject to continued employment of the sellers is recorded as post-combination expense over the period earned.

Intangible Assets

The fair value of each finite-lived intangible asset acquired was determined using the multi-period excess earnings method. For the valuation of customer relationships and backlog, various significant inputs and assumptions, including future revenues, contributory asset charges, discount rates, customer attrition rates and tax amortization benefit, were used to determine the respective gross intangible asset value as well as the appropriate amortization period.

The following finite-lived intangible assets were acquired as a result of the SE&M acquisition:

Fair value of the indefinite-lived intangible assets acquired were determined using the relief from royalty method-profit split analysis, which used various significant inputs and assumptions, including market royalty rates, operating history, brand reputation discount rates, long-term growth and capitalization rates, and tax amortization benefit.

The following indefinite-lived intangible assets were acquired as a result of the SE&M acquisition:

The Company did not incur costs to renew or extend the term of acquired intangible assets during the six months ended June 30, 2026.

Goodwill

Goodwill recognized in connection with the SE&M acquisition was recorded within the E&M segment, and the full goodwill amount of $69.0 million is expected to be deductible for income tax purposes.

Impact of Acquisition

The results of operations of SE&M were included in the Company’s unaudited condensed consolidated statements of income for the reporting periods following the April 1, 2026, acquisition date. For each of the three and six months ended June 30, 2026, the acquired business contributed $33.4 million of operating revenues and $1.8 million of net income. In addition, the preliminary purchase price allocation of acquisition-date fair value of identifiable assets acquired and liabilities assumed, as well as any measurement period adjustments, were included in the Company’s unaudited condensed consolidated balance sheet as of June 30, 2026.