Acquisitions

On August 11, 2015, the Company acquired 100% of the voting equity interest of Maxxton Holding B.V. (“MHB”) and its wholly owned subsidiaries, a Software as a Service ("SaaS") solution for vacation rental management companies. MHB provides central reservations systems, property management systems and integrated software applications including point-of-sale and is included in our Corporate and Other in our segment presentation found in Note 23. The total consideration was $23.6 million, which consisted of cash paid, net of cash acquired, of $13.3 million, deferred purchase price payable of $6.8 million, and liabilities assumed totaling $3.5 million. The deferred purchase price is payable over 5 years. In addition, the Company has a 5 year variable compensation arrangement with MHB's former owner, which is contingent on future minimum performance targets. As these amounts are contingent on achievement of certain targets and continued employment, no amounts were recorded for these future payments at the acquisition date. Based on current projections, total expected compensation under this arrangement is estimated to be approximately $8.2 million over the 5 year term. The transaction has been accounted for using the acquisition method of accounting and accordingly, assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The results of MHB have been consolidated with the Company since August 11, 2015.

The Company allocated the purchase price based upon a preliminary assessment of the fair value of the assets and liabilities assumed as of August 11, 2015. The Company completed its assessment of the MHB acquisition in the third quarter of 2016, identifying no adjustments to the fair value determination. As a result, the purchase price allocation is final as of the third quarter of 2016, with no adjustments made from the preliminary allocation.

Real Estate Acquisitions

In the first quarter of 2016, the Company completed three acquisitions of real estate as part of its program to incent franchise development in strategic markets for certain brands. The aggregate purchase price for these acquisitions was $25.8 million consisting of $25.6 million cash with an additional $0.2 million of current liabilities assumed. In addition, the Company incurred $0.5 million in acquisition related costs, which were expensed in the period. These acquisitions included:


•	On January 8, 2016, the Company acquired a parcel of land in Milwaukee, WI. The land is currently being utilized as a parking lot and will be developed into a Cambria hotel & suites hotel by the Company or through a future joint venture.


•	On January 11, 2016, the Company acquired a parcel of land and an office building in Indianapolis, IN. Subsequent to the acquisition, the land and building were utilized as a parking lot and actively managed office building. The properties were sold during the third quarter of 2016, reference "Real Estate Disposition" below.


•	On February 1, 2016, the Company acquired an actively managed office building and surrounding parking area in Houston, TX. The Company's plan for the building is to convert the property into a Cambria hotel & suites hotel either through development or as a part of a joint venture agreement.

The Company completed its assessment of the fair value of the assets acquired in the first quarter of 2016 and as a result the allocation is final. The results of operations, assets and liabilities have been reflected within the Company's franchising segment. The fair value of the assets and liabilities and associated useful lives are as follows:



	Estimated Fair Value (in thousands)			Useful Lives
Land	$	14,548		Not depreciated
Land Improvements	100			5 years
Building	10,499			30 years
Leasehold Value	(24		)	Not depreciated
Lease in Place	327			Not depreciated
Leasing Commission	51			Not depreciated
Other Assets	303
Total Assets Acquired	25,804
Other Liabilities	(240		)
Cash paid, net of cash acquired	$	25,564

Real Estate Disposition

On September 21, 2016, the Company completed the sale of the parcel of land and office building in Indianapolis, IN, as part of a combined transaction for $6.7 million. As a result of this sale, the Company recognized a pre-tax gain of $0.4 million included in Gain on sale of assets, net in the consolidated statements of income. The gain recognized is net of transaction costs.