ACQUISITIONSAssets acquired and liabilities assumed in business combinations are recorded on the Company’s Condensed Consolidated Balance Sheets as of the respective acquisition date based upon the estimated fair values at such date. The results of operations of the business acquired by the Company are included in the Company’s Condensed Consolidated Statements of Earnings since the respective date of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed is allocated to Goodwill. Pro forma supplemental financial information for all acquisitions is not provided as the impact of these acquisitions on the Company’s operating results was not material for any acquisition individually or in the aggregate. The following represents the fiscal year 2020 acquisitions:
Fiscal Year 2020 Acquisitions:
BUSINESS COMBINATIONS
Financial information on each transaction is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Shadow Financial | | Fi360 | | Clear-Structure | | Total | | | (In millions) | | | | | | | Cash payments, net of cash acquired | | $ | 35.7 | | | $ | 116.1 | | | $ | 59.5 | | | $ | 211.3 | | Deferred payments, net | | 3.0 | | | 3.5 | | | 2.5 | | | 9.0 | | Contingent consideration liability | | — | | | | — | | | 7.0 | | | 7.0 | | Aggregate purchase price | | $ | 38.7 | | | $ | 119.6 | | | $ | 69.0 | | | $ | 227.3 | | | | | | | | | | | Net tangible assets acquired / (liabilities assumed) | | $ | 0.2 | | | $ | (13.9) | | | $ | 1.4 | | | $ | (12.3) | | Goodwill | | 17.4 | | | 92.1 | | | 42.6 | | | 152.0 | | Intangible assets | | 21.1 | | | 41.5 | | | 25.0 | | | 87.6 | | Aggregate purchase price | | $ | 38.7 | | | $ | 119.6 | | | $ | 69.0 | | | $ | 227.3 | |
Shadow Financial Systems, Inc. (“Shadow Financial”) In October 2019, the Company completed the acquisition of Shadow Financial, a provider of multi-asset class post-trade solutions for the capital markets industry. The acquisition builds upon Broadridge’s post-trade processing capabilities by adding a market-ready solution for exchanges, inter-dealer brokers and proprietary trading firms. In addition, the acquisition adds capabilities across exchange traded derivatives and cryptocurrency. •Goodwill is tax deductible. •Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a seven-year life and five-year life, respectively. The allocation of the purchase price will be finalized upon completion of the analysis of the fair values of the acquired business’ assets and liabilities, and is still subject to a working capital adjustment.
Fi360, Inc. (“Fi360”) In November 2019, the Company completed the acquisition of Fi360, a provider of fiduciary and Regulation Best Interest solutions for the wealth and retirement industry, including the accreditation and continuing education for the Accredited Investment Fiduciary® Designation, the leading designation focused on fiduciary responsibility. The acquisition is expected to enhance Broadridge’s retirement solutions by providing wealth and retirement advisors with fiduciary tools that will complement its Matrix trust and trading platform. The acquisition also is expected to further strengthen Broadridge’s data and analytics tools and solutions suite that enable asset managers to grow their businesses by providing greater transparency into the retirement market. •Goodwill is not tax deductible. •Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a seven-year life and five-year life, respectively.
The allocation of the purchase price will be finalized upon completion of the analysis of the fair values of the acquired business’ assets and liabilities, and is still subject to a working capital adjustment. ClearStructure Financial Technology, LLC (“ClearStructure”) In November 2019, the Company acquired ClearStructure, a global provider of portfolio management solutions for the private debt markets. ClearStructure’s component services are expected to enhance Broadridge’s existing multi-asset class, front-to-back office asset management technology suite, providing Broadridge clients with a capability to access the public and private markets. •The contingent consideration liability is payable through fiscal year 2023 upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $12.5 million upon the achievement in full of the defined financial targets by the acquired business. •Goodwill is primarily tax deductible. •Intangible assets acquired consist primarily of customer relationships and software technology. The allocation of the purchase price will be finalized upon completion of the analysis of the fair values of the acquired business’ assets and liabilities, and is still subject to a working capital adjustment.
The following represents the fiscal year 2019 acquisitions:
Fiscal Year 2019 Acquisitions:
BUSINESS COMBINATIONS
Financial information on each transaction is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Rockall | | RPM | | TD Ameritrade* | | Total | | | (In millions) | | | | | | | Cash payments, net of cash acquired | | $ | 34.9 | | | $ | 258.3 | | | $ | 61.5 | | | $ | 354.7 | | Deferred payments, net | | 0.5 | | | 45.0 | | | — | | | 45.5 | | Contingent consideration liability | | 7.0 | | | 0.8 | | | — | | | 7.9 | | Aggregate purchase price | | $ | 42.4 | | | $ | 304.1 | | | $ | 61.5 | | | $ | 408.0 | | | | | | | | | | | Net tangible assets acquired / (liabilities assumed) | | $ | (2.5) | | | $ | 10.8 | | | $ | — | | | $ | 8.3 | | Goodwill | | 30.7 | | | 181.6 | | | 27.1 | | | 239.4 | | Intangible assets | | 14.2 | | | 111.7 | | | 34.4 | | | 160.3 | | Aggregate purchase price | | $ | 42.4 | | | $ | 304.1 | | | $ | 61.5 | | | $ | 408.0 | |
* Broadridge acquired the retirement plan custody and trust assets from TD Ameritrade Trust Company. Rockall Technologies Limited (“Rockall”) In May 2019, the Company completed the acquisition of Rockall, a leading provider of securities-based lending (“SBL”) and collateral management solutions for wealth management firms and commercial banks. The acquisition expands Broadridge’s core front-to-back office wealth capabilities, providing innovative SBL and collateral management technology solutions to help firms manage risk and optimize clients’ securities lending and financing needs. •The contingent consideration liability is payable over the next two years upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $10.1 million upon the achievement in full of the defined financial targets by the acquired business. •Goodwill is not tax deductible. •Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a four-year life and six-year life, respectively. •In the first quarter of fiscal year 2020, the Company settled deferred payment obligations totaling $0.5 million. RPM Technologies (“RPM”) In June 2019, Broadridge acquired RPM, a leading Canadian provider of enterprise wealth management software solutions and services. The acquisition brings new capabilities and next-generation technology to clients of both RPM and Broadridge. •The contingent consideration liability is payable over the next two years upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $3.7 million upon the achievement in full of the defined financial targets by the acquired business. •Goodwill is partially tax deductible. •Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a five-year life and seven-year life, respectively. •In the first quarter of fiscal year 2020, the Company settled deferred payment obligations totaling $40.9 million with a remaining expected payment obligation of approximately $4.0 million. The allocation of the purchase price is still subject to a working capital adjustment. Retirement Plan Custody and Trust Assets from TD Ameritrade In June 2019, Broadridge acquired the retirement plan custody and trust assets from TD Ameritrade Trust Company, a subsidiary of TD Ameritrade Holding Company. The acquisition expands Broadridge’s suite of solutions for the growing qualified and non-qualified retirement plan services market and the support it provides for third-party administrators, financial advisors, record-keepers, banks, and brokers. •Goodwill is tax deductible. •Intangible assets acquired consist of customer relationships, which are being amortized over a seven-year life.
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