Company Quick10K Filing
Boxwood Merger
Price-0.00 EPS0
Shares6 P/E-0
MCap-0 P/FCF0
Net Debt0 EBIT2
TEV-0 TEV/EBIT-0
TTM 2019-09-30, in MM, except price, ratios
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BWMC Filing

Note 1 — Organization and Basis of Presentation
Note 2 — Summary of Significant Accounting Policies
Note 3 — Atlas Business Combination
Note 4 — Business Acquisitions
Note 5 — Property and Equipment, Net
Note 6 — Goodwill and Intangibles
Note 7 — Long - Term Debt
Note 8 — Shareholders’ Equity
Note 9 — Loss per Share
Note 10 — Equity Based Compensation
Note 11 — Related - Party Transactions
Note 12 — Employee Benefit Plans
Note 14 — Commitments and Contingencies
Note 15 — Covid - 19 Pandemic
Note 16 — Subsequent Event
Note 1. Description of Organization and Business Operations
Note 2. Summary of Significant Accounting Policies
Note 3. Initial Public Offering
Note 4. Private Placement
Note 5. Related Party Transactions
Note 6. Commitments
Note 7. Stockholders’ Equity
Note 8. Income Tax
Note 9. Fair Value Measurements
Note 10. Subsequent Events
Note 1 — Organization and Basis of Presentation
Note 2 — Summary of Significant Accounting Policies
Note 3 — Business Acquisitions
Note 4 — Property and Equipment, Net
Note 5 — Goodwill and Intangibles
Note 6 — Long - Term Debt
Note 7 — Commitments and Contingencies
Note 8 — Equity Based Compensation
Note 9 — Related - Party Transactions
Note 10 — Employee Benefit Plans
Note 12 — Segment
Note 13 — Subsequent Events
Note 14 — Supplemental Cash Flow Information
Part II
Item 13. Other Expenses of Issuance and Distribution.
Item 14. Indemnification of Directors and Officers.
Item 15. Recent Sales of Unregistered Securities.
Item 16. Exhibits and Financial Statement Schedules
Item 17. Undertakings
EX-1.1 fs12020ex1-1_atlastec.htm
EX-5.1 fs12020ex5-1_atlastec.htm
EX-23.1 fs12020ex23-1_atlastec.htm
EX-23.2 fs12020ex23-2_atlastec.htm
EX-23.3 fs12020ex23-3_atlastec.htm

Boxwood Merger Filing 2020-08-11

S-1 1 fs12020_atlastechnical.htm

As filed with the Securities and Exchange Commission on August 11, 2020.

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

_____________________________________

Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

_____________________________________

Atlas Technical Consultants, Inc.

(Exact name of registrant as specified in its charter)

_____________________________________

Delaware

 

83-0808563

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification Number)

13215 Bee Cave Parkway, Building B, Suite 230
Austin, Texas 78738
(512) 851-1501

(Address, including zip code, and telephone number, including area code, of registrants’ and registrant guarantor’s principal executive offices)

_____________________________________

L. Joe Boyer
Chief Executive Officer
13215 Bee Cave Parkway, Building B, Suite 230
Austin, Texas 78738
(512) 851-1501

(Name, address, including zip code, and telephone number, including area code, of agent for service)

_____________________________________

 

Copies to:

   

Julian J. Seiguer, P.C.
Michael W. Rigdon
Kirkland & Ellis LLP
609 Main Street, Suite 4500
Houston, Texas 77002
(713) 836
-3600

     

Rachel W. Sheridan
Jason M. Licht
Latham & Watkins LLP
555 Eleventh Street, NW
Suite 1000
Washington, D.C. 20004
(202) 637
-2200

_____________________________________

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: £

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

£

 

Accelerated filer

 

S

Non-accelerated filer

 

£

 

Smaller reporting company

 

S

       

Emerging growth company

 

S

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. £

 

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered

 

Amount to be
Registered(1)

 

Proposed
Maximum
Offering
Price Per
Security(2)

 

Proposed
Maximum
Aggregate
Offering
Price(1)(2)

 

Amount of
Registration
Fee(3)

Class A common stock, par value $0.0001 per share

 

7,187,500

 

$

8.89

 

$

63,896,875

 

$

8,293.81

____________

(1)      Includes 937,500 shares that the underwriters have the option to purchase. See “Underwriting (Conflicts of Interest).”

(2)      Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act. The price per share and aggregate offering price are based on the average of the high and low prices of the Class A common stock on August 6, 2020, as reported on The Nasdaq Stock Market.

(3)     Pursuant to Rule 457(p) under the Securities Act, Atlas Technical Consultants, Inc. (the “Registrant”) is offsetting $8,293.81 of the filing fee previously paid with respect to the registration statement on Form S-3 (File Number 333-236470) filed by the Registrant with the Securities and Exchange Commission on February 14, 2020 ($110,630.36 of which was previously used to offset the filing fees due with respect to the registration statement on Form S-1 filed on April 17, 2020, $651.28 of which was previously used to offset the filing fees due with respect to the registration statement on Form S-8 filed on April 17, 2020 and $10,750.17 of which remains unused) against the entire filing fee of $8,293.81 due under this registration statement (the “Registration Statement”).

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended (the “Securities Act”), or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

The information in this preliminary prospectus is not complete and may be changed. We and the selling stockholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the “SEC”) is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

 

SUBJECT TO COMPLETION DATED AUGUST 11, 2020

Atlas Technical Consultants, Inc.

6,250,000 Shares of Class A Common Stock

_____________________

Atlas Technical Consultants, Inc. (formerly known as Boxwood Merger Corp. (prior to the Business Combination (defined below) “Boxwood”)), a Delaware corporation (the “Company,” “we,” “our” or “us”) is offering 5,000,000 shares of its Class A common stock, par value $0.0001 per share (the “Class A common stock”). The selling stockholder named in this prospectus is offering 1,250,000 shares of our Class A common stock. We will not receive any proceeds from the sale of our Class A common stock by such selling stockholder.

Our Class A common stock is traded on The NASDAQ Stock Market (“NASDAQ”) under the symbol “ATCX”. On August 10, 2020, the last reported sale price of our Class A common stock was $9.20 per share. As of August 10, 2020, we had 5,767,342 shares of Class A common stock issued and outstanding.

The selling stockholder named in this prospectus will grant the underwriters an option for a period of 30 days to purchase up to 937,500 additional shares of Class A common stock on the same terms and conditions set forth in this prospectus. We will not receive any of the proceeds from the sale of shares by the selling stockholder if the underwriters exercise their option to purchase 937,500 additional shares of Class A common stock.

 

Per share

 

Total

Public offering price

 

$

   

$

 

Underwriting discounts and commissions(1)

 

$

   

$

 

Proceeds to us before expenses

 

$

   

$

 

Proceeds to the selling stockholder

 

$

   

$

 

____________

(1)    We refer you to “Underwriting (Conflicts of Interest)” beginning on page 101 of this prospectus for additional information regarding total underwriters’ compensation.

_____________________

Investing in our common stock involves risks. See “Risk Factors” beginning on page 13.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), and are subject to reduced public company reporting requirements. See “Risk Factors.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of our Class A common stock to purchasers on or about       , 2020.

Joint Book-Running Managers

 

Stifel

 

Raymond James

   

Macquarie Capital

Co-Manager

Lake Street

_____________________

The date of this prospectus is             , 2020.

 

TABLE OF CONTENTS

 

Page

Prospectus Summary

 

1

Risk Factors

 

13

Cautionary Statement Regarding Forward-Looking Statements

 

28

Unaudited Pro Forma Condensed Combined Financial Information

 

29

Use of Proceeds

 

35

Dividend Policy

 

36

Capitalization

 

37

Selected Historical Financial Data

 

38

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

39

Business

 

53

Management

 

65

Executive Compensation

 

71

Principal and Selling Stockholder

 

80

Certain Relationships and Related Party Transactions

 

84

Description of Securities

 

91

Shares Eligible for Future Sale

 

94

Material U.S. Federal Income Tax Considerations for Non-U.S. Holdings

 

97

Underwriting (Conflicts of Interest)

 

101

Legal Matters

 

106

Experts

 

106

Where You Can Find More Information

 

106

Index to Financial Statements

 

F-1

_________________________________

Neither we nor the selling stockholder nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus, any accompanying prospectus supplement or any free writing prospectus we have prepared. We and the selling stockholder and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

This prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. See “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

i

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates of the Financial Accounting Standards Board (“FASB”).

Atlas Technical Consultants, Inc. (formerly named Boxwood Merger Corp.) was a special purpose acquisition company that acquired Atlas Intermediate Holdings LLC, a Delaware limited liability company (“Atlas Intermediate”), and ATC Group Partners LLC, a Delaware limited liability company (“ATC Group”) and now an indirect subsidiary of Atlas Intermediate, in connection with the consummation of the Business Combination (as defined herein). The Business Combination has been accounted for as a reverse recapitalization. Under this method of accounting, Atlas Technical Consultants, Inc. was treated as the acquired company and Atlas Intermediate and ATC Group were treated as the acquirer for financial reporting purposes. Therefore, the combined consolidated financial results included in this prospectus for historical periods prior to the consummation of the Business Combination present the financial information of Atlas Intermediate and ATC Group as the Company’s predecessor entity. Atlas Intermediate and ATC Group have been presented on a combined basis for historical periods as they are entities under common control. In January 2019, the businesses of Atlas Intermediate and ATC Group were merged through a series of transactions.

Industry and Market Data

The market data and certain other statistical information used throughout this prospectus are based on independent industry publications, government publications and other published independent sources. Although we believe these third-party sources are reliable as of their respective dates, neither we nor the selling stockholder have independently verified the accuracy or completeness of this information. Some data is also based on our good faith estimates. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in these publications.

ii

Prospectus Summary

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes included in this prospectus and the information set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In this prospectus, unless the context requires otherwise, references to the “Company,” “we,” “our,” or “us” refer to (i) Atlas Intermediate, ATC Group, AS&M Holdings LP (formerly known as “Atlas Technical Consultants Holdings LP” (“Atlas Holdings”)) and all of their subsidiaries prior to the consummation of the Business Combination, (ii) Atlas Technical Consultants, Inc. and its consolidated subsidiaries following the consummation of the Business Combination and (iii) references to “Boxwood” refer to Boxwood Merger Corp. References to the “selling stockholder” refer to PTE Holdings, Inc., the selling stockholder that is offering shares of Class A common stock in this offering and will grant the underwriters a 30-day option to purchase additional shares of Class A common stock in this offering, as applicable. The acquisition of Atlas Intermediate and ATC Group, pursuant to that certain unit purchase agreement entered into by and between Atlas TC Buyer LLC (the “Buyer”), a Delaware limited liability company, Atlas Holdings and the other parties thereto on August 12, 2019 (as amended, the “Purchase Agreement”) is referred to herein as the “Business Combination.”

Our Company

Headquartered in Austin, Texas, we are a leading provider of professional and technical testing, inspection engineering and consulting services, offering solutions to public and private sector clients in the transportation, commercial, water, government, education and industrial markets. With approximately 135 offices located throughout the United States, we provide a broad range of mission-critical technical services, helping our clients test, inspect, plan, design, certify and manage a wide variety of projects across diverse end markets.

We act as a trusted advisor to our clients, helping clients design, engineer, inspect, manage and maintain civil and commercial infrastructure, servicing existing structures as well as helping to build new structures. However, we do not perform any construction and do not take construction risk.

We provide a broad range of mission-critical technical services, ranging from providing inspection services in small projects to managing significant aspects of large, multi-year projects. For the year ended December 31, 2019, we:

•        performed more than 50,000 projects, with average revenue per project of less than $10,000; and

•        delivered over 90% of our revenue under “time & material” and “cost-plus” contracts.

We have long-term relationships with a diverse set of clients, providing a base of repeating clients, projects and revenues. Approximately 90% of our revenues were derived from clients that have used our services at least twice in the past three years and more than 95% of our revenues are generated from client relationships longer than 10 years, with greater than 25% of revenues generated from relationships longer than 30 years. Examples of such long-term customers include the Georgia and Texas Departments Department of Transportation, US Postal Service, US Environmental Protection Agency, Gwinnett County Georgia, New York City Housing Authority, San Francisco International Airport, Stanford University, Port of Oakland, United Rentals, Inc., Speedway, Walmart Inc., and Apple Inc.

Our broad base of customers spans a diverse set of end markets including the transportation, commercial, water, government, education and industrial sectors. Our customers include government agencies (federal, state and local), quasi-public entities, schools, hospitals, utilities and airports, as well as private sector clients across many industries.

Our services require a high degree of technical expertise, as our clients rely on us to provide testing, inspection and quality assurance services to ensure that structures are designed, engineered, built and maintained in accordance with building codes, regulations and the highest safety standards. As such, our services are delivered by a highly-skilled, technical employee base that includes engineers, inspectors, scientists and other field experts. As of June 30, 2020, our technical staff represented 75% out of our 3200 employees. Our services are typically provided under contracts, some of which are long-term with long lead times between when contracts are signed and when our services are performed. As such, we have a significant amount of contracted backlog, providing for a high degree of visibility with respect to revenues expected to be generated from such backlog. As of June 30, 2020, our contracted backlog was estimated to be approximately $621 million. See “— Backlog” below for additional information relating to our backlog.

1

For the six months ended June 30, 2020 and year ended December 31, 2019, we recognized approximately $222.0 million and $471.0 million of gross revenues, ($21.3) million and $8.0 million of net (loss) income, and $28.3 million and $65.6 million of Adjusted EBITDA, respectively. Our Adjusted EBITDA for 2019 does not take into account approximately $7.0 million of pro forma cost synergies reflecting the impact of cost savings arising from the merger between Atlas Intermediate and ATC Group Services (defined below) in 2019 by eliminating duplicate costs including those relating to labor, rent and sourcing. The $(21.3) million loss for the six months ended June 30, 2020 represents a loss of ($21.1) million prior to the Business Combination and ($0.2) million following the Business Combination. The loss prior to the Business Combination was significantly influenced by transaction costs associated with the merger of approximately $25.0 million. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to historical combined net income (loss), see “Prospectus Summary — Non-GAAP Financial Measures.”

Company History

Since our inception, we have strategically strengthened our capabilities and widened our footprint through acquisitions of premier national and large regional technical service companies to create an industry-leading platform. Prior to the consummation of the Business Combination, in 2017, we sequentially acquired three regional market leaders in Texas (Pavetex Engineering and Testing Service (“PAVETEX”)), Georgia (Moreland), and California (Consolidated Engineering Laboratories (“CEL”)). These businesses established our core services and capabilities. In 2018, we further augmented our core services and regional leadership through the acquisitions of Piedmont Geotechnical Consultants (“Piedmont”) (Georgia) and SCST, Inc. (“SCST”) (California). In January 2019, we acquired ATC Group Services, an environmental and engineering consulting services company with over 1,700 employees across North America (“ATC Group Services”). As a result of these acquisitions, we established ourselves as a leading national platform. In February 2020, consistent with our ongoing acquisition strategy, we purchased Long Engineering, Inc. (“LONG”), a land surveying and engineering company headquartered in Atlanta, Georgia, adding an additional 113 technical resources.

On February 14, 2020, Boxwood, a special purpose acquisition company and the historical registrant prior to such date, consummated the Business Combination pursuant to the Purchase Agreement in which it acquired Atlas Intermediate. In connection with the Business Combination, Boxwood changed its name to Atlas Technical Consultants, Inc. Following the consummation of the Business Combination, the combined company is organized in an “Up-C” structure in which the business of Atlas Intermediate and its subsidiaries is held by Atlas TC Holdings LLC, a subsidiary of the Company (“Holdings”). The Company operates its business through the subsidiaries of Atlas Intermediate, and the Company’s only direct assets consist of units of Holdings (“Holdings Units”). The Company is the sole manager of Holdings in accordance with the terms of the amended and restated limited liability company agreement of Holdings (the “Holdings LLC Agreement”) entered into in connection with the consummation of the Business Combination. For a more detailed discussion of the Company’s organizational structure, see “— Our Principal Stockholders and Corporate Structure.”

Competitive Strengths

We believe that the following competitive strengths have been instrumental in our success and position us for continued growth:

National provider of highly technical and mission-critical services.    Our scale and breadth in our service offering enables us to compete for complex, marquee contract opportunities and deliver highly customized solutions on both national projects and at the local level. Established footholds in key geographies provide multiple touchpoints within the country’s highest growth markets. We believe our considerable technical expertise, qualifications and strong reputation in key infrastructure markets enables us to be successful with competitive opportunities and deliver high-quality rapid response capabilities to clients.

Repeatable, non-discretionary demand and entrenched relationships with long-term customers.    Non-discretionary, compliance-driven demand for our services creates repeating revenue from decades-long relationships with our blue-chip, diverse customer base. Our knowledge of our clients’ businesses drives transformative outcomes and high rates of customer retention. We generated approximately 76% of net revenue for the six months ended June 30, 2020 and the year ended December 31, 2019 from customers that have engaged us in each of the last three years and 90% of our net revenue was derived from customers that have engaged us in at least two of the past three years. Of our top 15 customers by net revenue in 2019, over 50% had relationships with us of over 20 years, through our predecessor companies, and 96% had relationships with us of over 10 years.

2

De-risked business profile.    More than 90% of our revenue are either “time & material” or “cost-plus” contracts. Additionally, we estimate that approximately 70% of net revenue is generated from work on existing assets and structures, which are less impacted by new construction trends. We also utilize an asset-light operating model and variable cost workforce that allows management to right-size the cost structure to match demand trends and generate strong free cash flow during periods of slower activity.

Customer, end-market and geographic diversity.    We provide technical services to a diverse variety of customers with no significant end market, geography, project or customer concentration. We serve over 9,000 customers annually across over 50,000 projects. As of June 30, 2020, we operated in 41 states with 3,200 employees stationed across approximately 135 offices. For the six months ended June 30, 2020 and the year ended December 31, 2019, on a combined, net revenue basis, no customer represented more than 10% of our total net revenue and our top ten customers accounted for approximately 25% of total net revenue. Our broad geographic reach enables us to provide local service on a national level with entrenched positions in key markets that have favorable infrastructure spending patterns.

Highly visible revenue through a robust backlog.    Our significant backlog growth and robust pipeline provides visibility into our near-term revenue forecast. Our backlog, consisting of only contracted and fully funded work, has increased from $601 million as of December 31, 2019 to $621 million as of June 30, 2020, which represents over 130% of our gross revenue for the fiscal year ended December 31, 2019.

Strong margins and free cash flow.    We maintain strong margins and have achieved significant margin expansion since 2015. This attractive margin profile, coupled with a capital-light business model, enables us to maintain strong free cash flow.

Proven and experienced management team.    Our management team has deep industry expertise. We are led by our Chief Executive Officer, L. Joe Boyer, who has more than 30 years of experience in the technical services industry and is supported by an executive leadership team which also has an average of over 25 years of experience. Our management team has a long track record of achieving organic growth, high employee retention and executing on both accretive acquisitions and cross-selling opportunities.

Growth Strategy

We focus on a multi-pronged growth strategy, with a clear path to achieving our strategic plan driven by a unique inflection point in our evolution following recent acquisitions.

We intend to pursue the following growth strategies as we seek to expand our market share and position as a preferred provider of professional and technical services:

•        capitalize on key market tailwinds;

•        continue to expand cross-selling and national accounts;

•        pursue larger, premier infrastructure opportunities; and

•        maintain a disciplined approach to strategic, accretive and deleveraging mergers and acquisitions.

Capitalize on Key Market Tailwinds

We built our platform to take advantage of multiple independent, positive, macroeconomic trends that underpin momentum in target-end markets. Demands for our technical services are driven by aging infrastructure, increasing complexity and scrutiny of regulatory requirements, and continued inspection and quality assurance outsourcing trends. We have strategically established operations in states with large, predictable transportation budgets, and are primed to capitalize on the strong demand for repair and maintenance of aging infrastructure.

Cross-Selling and National Accounts

We intend to leverage our expanded platform to cross-sell our diverse services to existing customers. As the platform integration continues, we expect the number of cross-selling opportunities to drive increasing and above market organic revenue growth. We had previously ceded opportunities to subcontractors that can now be performed under our expanded, unified platform. We have already demonstrated success in increasing our self-performance net revenue across our platform as well as our cross-selling initiatives through our long-term relationship with clients, such as Walmart Inc.

3

Pursue Larger, Premier Infrastructure Opportunities

We intend to use our expanded geographic reach and service capabilities to pursue and win premier infrastructure opportunities that require complex infrastructure delivery services. We have already begun to execute on this blueprint, as illustrated by an increase in the number of backlog projects greater than $5 million from ten, as of December 31, 2018, to twenty, as of December 31, 2019. As of June 30, 2020, our sales team is pursuing 67 opportunities of greater than $5 million for 2020 and beyond. In addition, we continue to see our average contract and project sizes increase.

Disciplined Approach to Mergers and Acquisitions

We maintain a rigorous and highly disciplined approach in our pursuit of accretive acquisitions. We intend to selectively pursue targets that provide complementary, low-risk services and expand our national platform. These strategic acquisitions represent a highly attractive opportunity for us to continue diversifying and expanding our customer base, geographic footprint, and service offering across the platform. We intend to deploy this strategy within the highly fragmented technical services market which is largely comprised of regional service providers. We have a demonstrated track record of successfully identifying target companies and integrating them at highly accretive valuations, having completed seven such acquisitions since 2017.

Our Principal Stockholders and Corporate Structure

As the sole managing member of Holdings, the Company operates and controls the business and affairs of Holdings, and through Holdings and its subsidiaries, conducts its business. As a result, the Company consolidates the financial results of Holdings and its subsidiaries and reports the non-controlling interest related to the portion of Holdings Units not owned by the Company, which will reduce net income (loss) attributable to the Company’s Class A stockholders. After giving effect to this offering, the Company will own 34.6% of the voting power of Holdings (assuming that the underwriters’ option to purchase additional shares is not exercised).

Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by our amended and restated certificate of incorporation. Holders of our Class B common stock have no economic rights. Our Class B common stock is not listed on any exchange, nor do we intend to list it.

Under the Holdings LLC Agreement, AS&M Holdings LP, and following August 14, 2020 (the date that is six months from the consummation of the Business Combination), subject to the lock-up agreements described in “Shares Eligible for Future Sale — Lock-up Agreements,” each of the other members of Holdings (other than us and our subsidiaries) has a right to cause Holdings to redeem from time to time, all or a portion of such member’s Holdings Units (together with an equal number of shares of Class B common stock) for either (x) the delivery by Holdings of a number of shares of Class A common stock equal to the number of Holdings Units surrendered or (y) at Holdings’ election made in accordance with the Holdings LLC Agreement, the delivery by Holdings of cash equal to the Cash Election Amount (as defined in the Holdings LLC Agreement) calculated with respect to such redemption. For more information, see “Certain Relationships and Related Party Transactions — Material Relationships and Transactions with the Selling Stockholder.”

4

The following diagram indicates our simplified structure immediately following completion of this offering (assuming that the underwriters’ option to purchase additional shares is not exercised):

This diagram does not take into account shares that may be issuable to Alta Vista Solutions, Inc. (“Alta Vista”) as described in Note 16 to our financial statements included elsewhere in this prospectus

____________

(1)      Includes certain investment funds managed by Bernhard Capital Partners Management LP (AS&M Holdings LP and the other investment funds affiliated with Bernhard Capital Partners Management, LP are referred to herein as “Bernhard Capital Partners”) and certain members of management who were either direct or indirect limited partners of Atlas Holdings, at the time of the Business Combination.

(2)      Includes investments held by Boxwood Sponsor LLC (“Boxwood Sponsor”), MIHI Boxwood Sponsor, LLC and former officers of Boxwood that owned interests in Boxwood prior to the Business Combination.

Recent Developments

COVID-19 Pandemic

In March 2020, the World Health Organization categorized the novel coronavirus (“COVID-19”) as a pandemic. In conjunction with the spread of COVID-19 across the United States, recommendations and mandates have been handed down by various local, state and federal government agencies regarding social distancing, containment areas and against large gatherings. In addition, various travel restrictions have been imposed by the United States and foreign governments, and by companies with respect to their employees, and various event venues announced indefinite closures, which has negatively impacted our business. For example, shelter in place orders in large metropolitan areas on the West Coast and Eastern seaboard attributed to approximately ($15.2) million in decrease to revenue in the six months ended June 30, 2020. As a result of these and various other factors, we have taken a number of steps to ensure the safety of our clients and employees, including making a substantial increase in the number of our employees working remotely.

5

The domestic and global crisis resulting from the outbreak of the COVID-19 pandemic, and the measures being taken to address and limit the spread of the virus, have already adversely affected the U.S. economy and financial markets, resulting in an economic downturn that has negatively impacted the demand for our services. This crisis has affected our operations and liquidity in a number of ways. Project delays have negatively impacted our revenue, and if continued or exacerbated, could result in a material adverse effect to our business. Additionally, a prolonged downturn could ultimately result in an overall decrease in demand for our services. We cannot currently predict with certainty the full extent to which our business, results of operations, financial condition or liquidity will ultimately be impacted. We will continue to monitor the safety of our employees during the COVID-19 pandemic, and we are evaluating, and will continue to evaluate, the impact of COVID-19 on our current projects. The impact of the COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot currently predict with certainty the extent to which our business, results of operations, financial condition or liquidity will ultimately be impacted. Our top priority is to protect our employees and their families, as well as our clients.

Risks Associated with Our Business

Investing in our Class A common stock involves a high degree of risk. You should carefully consider these risks before investing in our Class A common stock, including the risks related to our business and industry described under “Risk Factors” elsewhere in this prospectus.

Our Controlled Company Status

The rules of NASDAQ define a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. Following the consummation of the Business Combination, Bernhard Capital Partners controlled, directly or indirectly, approximately 67.8% of the voting power of our common stock and pro forma for this offering will hold approximately 58.1% of the voting power of our common stock. As a result, we are a controlled company under the listing rules of NASDAQ (a “Controlled Company”) and the rules of the SEC. As a Controlled Company, the Company qualifies for exemptions from certain corporate governance rules.

Our Emerging Growth Company Status

As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we are eligible for certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.

We may take advantage of these provisions until we are no longer an emerging growth company, which will occur on the earliest of (i) the last day of the fiscal year in which the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more during such fiscal year, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock in the IPO, which would be December 31, 2023.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the same time private companies adopt the new or revised standard.

6

Our Smaller Reporting Company Status

We are also currently a “smaller reporting company,” meaning that we have either (a) a public float of less than $250 million or (b) annual revenues of less than $100 million and either no public float or a public float of less than $700 million. In the event that we are still considered a “smaller reporting company,” at such time as we cease being an “emerging growth company,” the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings.

Accordingly, the information that we provide you may be different than what you may receive from other public companies in which you hold equity interests.

Our Corporate Information

Our principal executive offices are located at 13215 Bee Cave Parkway, Building B, Suite 230, Austin, Texas 78738 and our telephone number is (512) 851-1501. Our website is www.oneatlas.com. The information on our website does not constitute part of, and is not incorporated by reference in, this prospectus or any accompanying prospectus supplement, and you should not rely on our website or such information in making a decision to invest in our securities.

7

THE OFFERING

Class A common stock to be offered by us

 


5,000,000 shares.

Class A common stock to be offered by the selling stockholder

 


1,250,000 shares, all of which represent shares of Class A common stock to be issued upon redemption of an equivalent number of the selling stockholder’s Holdings Units (together with a corresponding number of shares of our Class B common stock) prior to completion of this offering.

Underwriters’ option to purchase additional shares

 


The selling stockholder will grant the underwriters a 30-day option to purchase up to an additional 937,500 shares of Class A common stock, all of which represent shares of Class A common stock to be issued upon redemption of an equivalent number of their Holdings Units (together with a corresponding number of shares of our Class B common stock) prior to completion of this offering.

Class A common stock to be outstanding immediately after completion of this offering

 



12,017,342 shares (12,954,842 shares if the underwriters exercise in full their option to purchase additional shares), which includes the Class A common stock offered by the selling stockholder (issued upon redemption of an equivalent number of the selling stockholder’s Holding Units (together with a corresponding number of shares of our Class B common stock)).

Class B common stock to be outstanding immediately after completion of this offering

 



22,724,368 shares (21,786,868 shares if the underwriters exercise in full their option to purchase additional shares), or one share for each Holdings Unit held by the members of Holdings (other than the Company) immediately following this offering. Class B shares are non-economic. When a Holdings Unit is redeemed for a share of Class A common stock, a corresponding share of Class B common stock will be cancelled.

Redemption Rights of Members of Holdings

 


Under the Holdings LLC Agreement, Bernhard Capital Partners, and following August 14, 2020 (the date that is six months from the consummation of the Business Combination), each of the other members of Holdings (other than the Company and its subsidiaries) has a right to cause Holdings to redeem, from time to time, but in any event subject to the lock-up agreements described in “Shares Eligible for Future Sale — Lock-up Agreements,” all or a portion of such member’s Holdings Units (together with an equal number of shares of Class B common stock) for either (x) the delivery by Holdings of a number of shares of Class A common stock equal to the number of Holdings Units surrendered or (y) at Holdings’ election made in accordance with the Holdings LLC Agreement, the delivery by Holdings of cash equal to the Cash Election Amount (as defined in the Holdings LLC Agreement) calculated with respect to such redemption. See “Certain Relationships and Related Party Transactions — Material Relationships and Transactions with the Selling Stockholder.”

Voting power of Class A common stock after giving effect to this offering

 



34.6% (or 37.3% if the underwriters’ option to purchase additional shares is exercised in full).

Voting power of Class B common stock after giving effect to this offering

 



65.4% (or 62.7% if the underwriters’ option to purchase additional shares is exercised in full).

8

Voting rights

 

Each share of our Class A common stock entitles its holder to one vote on all matters to be voted on by stockholders generally. Each share of our Class B common stock entitles its holder to one vote on all matters to be voted on by stockholders generally. Holders of our Class A common stock and Class B common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise required by applicable law or by our certificate of incorporation. See “Description of Capital Stock.”

Use of proceeds

 

We estimate that, based on an assumed offering price of $9.20 per share (which is the last reported sales price of our Class A common stock on the NASDAQ on August 10, 2020), and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, we will receive approximately $43.0 million of net proceeds from our offering of Class A common stock. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we intend to use a portion of the net proceeds from this offering to repay $24.0 million of revolver borrowings outstanding under the Atlas Credit Agreement (defined below) and the remaining net proceeds for general corporate purposes. We will not receive any proceeds from the sale of Class A common stock by the selling stockholder in this offering. See “Use of Proceeds.”

Dividend policy

 

We currently do not intend to declare any dividends on our common stock in the foreseeable future. Our ability to declare dividends may be limited by restrictive covenants contained in any of our existing or future indebtedness. See “Dividend Policy.”

NASDAQ Stock Market symbol

 

ATCX.

Risk factors

 

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 13 of this prospectus for a discussion of factors you should carefully consider before investing in our common stock.

Conflicts of Interest

 

Boxwood Sponsor, which beneficially owns more than 10% of our outstanding common stock, is an affiliate of Macquarie Capital, an underwriter in this offering. In addition, an affiliate of Macquarie Capital (USA) Inc. (“Macquarie Capital”) is a lender under the Atlas Credit Agreement and will receive 5% or more of the net proceeds of this offering due to the repayment of our revolver borrowings outstanding under the Atlas Credit Agreement. As a result, Macquarie Capital is deemed to have a “conflict of interest” within the meaning of Rule 5121 (“Rule 5121”) of the Financial Industry Regulatory Authority (“FINRA”). Accordingly, this offering will be conducted in accordance with Rule 5121, which requires, among other things, that a “qualified independent underwriter” participate in the preparation of, and exercise the usual standards of “due diligence” with respect to, the registration statement and this prospectus. Lake Street Capital Markets, LLC has agreed to act as a qualified independent underwriter for this offering. Lake Street Capital Markets, LLC will not receive any additional fees for serving as a qualified independent underwriter in connection with this offering. We have agreed to indemnify Lake Street Capital Markets, LLC against liabilities incurred in connection with acting as a qualified independent underwriter, including liabilities under the Securities Act.

Except as otherwise indicated, all information contained in this prospectus assumes that the underwriters do not exercise their option to purchase additional shares of Class A common stock. Additionally, unless otherwise indicated, all information contained in this prospectus regarding the number of shares of common stock that will be outstanding immediately after this offering is based on 5,767,342 shares of Class A common stock and 23,974,368 shares of Class B common stock outstanding as of August 10, 2020, and:

•        excludes 598,275 shares of Class A common stock underlying restricted stock units that were outstanding as of August 10, 2020;

•        excludes 23,750,000 shares of Class A common stock underlying (i) 20,000,000 warrants (the “Public Warrants”) originally sold as part of the units in our initial public offering (the “IPO”) and (ii) 3,750,000 warrants originally sold as part of units to Boxwood Sponsor in private placements that closed concurrently with our IPO (the “Private Placement Warrants,” and together with the Public Warrants, the “Warrants”); and

•        excludes any shares that may be issuable to Alta Vista as described in Note 16 to our financial statements included elsewhere in this prospectus

9

SUMMARY HISTORICAL AND UNAUDITED PRO FORMA FINANCIAL DATA

The following tables set forth our summary historical and unaudited pro forma statement of operations data, balance sheet data and cash flow statement data as of the dates and for the periods indicated. The summary historical financial data as of and for the six months ended June 30, 2020 and for the six months ended June 30, 2019 is derived from our unaudited condensed consolidated financial statements appearing elsewhere in this prospectus. The summary historical and financial data as of and for the years ended December 31, 2019 and 2018 are derived from the audited consolidated financial statements of Atlas Intermediate and ATC Group appearing elsewhere in this prospectus. The following summary financial data should be read with the sections titled “Unaudited Pro Forma Condensed Combined Financial Statements,” “Selected Historical Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as our financial statements and the related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

The summary unaudited pro forma condensed combined financial information presents our unaudited pro forma condensed combined financial results for the year ended December 31, 2019 and for the six months ended June 30, 2020 based upon the combined historical financial statements of the Company, Boxwood and Atlas Intermediate after giving effect to the Business Combination and related adjustments, including the related equity financing and debt financing, as if they had been completed on January 1, 2019 and is derived from the unaudited pro forma condensed combined consolidated financial statements appearing elsewhere in this prospectus.

This information has been developed from and should be read together with the Company’s, Boxwood’s and Atlas Intermediate and ATC Group’s historical audited and unaudited financial statements and related notes included herein.

The unaudited pro forma condensed combined financial information is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Business Combination had been completed as of the dates set forth above, nor is it indicative of the future results or financial position of the combined company.

10

         

Pro Forma

   

Six Months Ended
June 30,

 

Years Ended
December 31,

 

Six Months Ended
June 30,
2020

 

Year Ended December 31,
2019

   

2020

 

2019

 

2019

 

2018

 
   

(in thousands, except share and per share data and Adjusted EBITDA)

   

(unaudited)

               

Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

222,017

 

 

$

229,280

 

 

$

471,047

 

 

$

426,439

 

 

$

222,017

 

 

$

471, 047

 

Cost of revenues

 

 

(117,612

)

 

 

(125,624

)

 

 

(259,741

)

 

 

(249,504

)

 

 

(117,612

)

 

 

(259,741

)

Operating expenses

 

 

(113,741

)

 

 

(92,105

)

 

 

(192,075

)

 

 

(157,459

)

 

 

(94,697

)

 

 

(182,861

)

Operating (loss) income

 

 

(9,336

)

 

 

11,551

 

 

 

19,231

 

 

 

19,476

 

 

 

9,708

 

 

 

28,445

 

Interest expense, net

 

 

(12,038

)

 

 

(5,534

)

 

 

(9,862

)

 

 

(6,787

)

 

 

(11,519

)

 

 

(19,477

)

Other

 

 

50

 

 

 

(782

)

 

 

(1,339

)

 

 

(644

)

 

 

50

 

 

 

(4,252

)

Net (loss) income

 

$

(21,324

)

 

$

4,863

 

 

$

8,030

 

 

$

12,045

 

 

$

(1,761

)

 

$

4,716

 

Provision for non-controlling interest

 

 

5,141

 

 

 

 

 

 

 

 

 

 

 

 

7,926

 

 

 

7,077

 

Redeemable preferred stock dividends

 

 

(6,777

)

 

 

 

 

 

 

 

 

 

 

 

(8,973

)

 

 

(17,919

)

Net (loss) income attributable to Members/holders of Class A common stock

 

$

(22,960

)

 

$

4,863

 

 

$

8,030

 

 

$

12,045

 

 

$

(2,808

)

 

$

(6,126

)

Net loss per Class A common share: basic and diluted(1)

 

$

(22,960

)

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

$

(0.49

)

 

$

(1.05

)

Weighted-average Class A common shares used in computing net loss per share: basic and diluted(1)

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

5,767,342

 

 

 

5,827,342

 

Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

16,881

 

 

 

 

 

 

$

20,185

 

 

$

6,509

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

15,439

 

 

 

 

 

 

 

14,824

 

 

 

12,260

 

 

 

 

 

 

 

 

 

Total Assets

 

$

354,875

 

 

 

 

 

 

$

352,773

 

 

$

354,835

 

 

 

 

 

 

 

 

 

Long-term debt, net of current maturities and loan costs, and other long-term liabilities

 

 

270,915

 

 

 

 

 

 

 

158,557

 

 

 

112,362

 

 

 

 

 

 

 

 

 

Total shareholders’ equity (deficit)/members’ capital

 

 

(127,483

)

 

 

 

 

 

$

127,443

 

 

$

171,794

 

 

 

 

 

 

 

 

 

Cash Flow Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash (used in) provided by operating activities

 

$

(6,250

)

 

$

6,942

 

 

$

31,507

 

 

$

36,916

 

 

 

 

 

 

 

 

 

Net cash (used in) investing activities

 

 

(12,881

)

 

 

(4,091

)

 

 

(9,607

)

 

 

(14,149

)

 

 

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

 

15,827

 

 

 

781

 

 

 

(8,224

)

 

 

(26,875

)

 

 

 

 

 

 

 

 

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA
(in millions)
(2)(3)

 

$

28.3

 

 

$

28.2

 

 

$

65.6

 

 

$

52.6

 

 

 

 

 

 

 

 

 

____________

(1)      See Notes 1 and 9 to our financial statements included elsewhere in this prospectus for an explanation of the calculations of our basic and diluted net loss per share and the weighted-average number of shares used in the computation of the per share amounts as of the years ended December 31, 2018 and 2019, and six months ended June, 2019 and 2020.

(2)      Our capital expenditures for 2018 and 2019 were $8,453 thousand and $5,626 thousand respectively.

(3)      For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to historical combined net income (loss), see “— Non-GAAP Financial Measures” below.

11

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA

Adjusted EBITDA is not a financial measure determined in accordance with GAAP. We define Adjusted EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization, further adjusted to reflect non-cash equity compensation as well as certain one-time or non-recurring items.

We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of Adjusted EBITDA to net income, our most directly comparable financial measure calculated and presented in accordance with GAAP.

 

Six Months Ended
June 30,

 

Year Ended
December 31,

   

2020

 

2019

 

2019

 

2018

   

(in millions)

Net (loss) income

 

$

(21.3

)

 

 

4.9

 

$

8.0

 

$

12.0

Interest expense

 

 

12.0

 

 

 

5.5

 

 

9.9

 

 

6.8

Provision for income taxes

 

 

 

 

 

0.2

 

 

1.3