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Acquisitions
12 Months Ended
Dec. 31, 2016
Acquisitions [Abstract]  
Acquisitions
Acquisitions

CATCo Investment Management Acquisition

In December 2015, the Company completed the acquisition of substantially all of the assets of CATCo Investment Management Ltd. (CATCo IM) and CATCo-Re Ltd. CATCo IM was a leading insurance-linked securities investment fund manager and reinsurance manager headquartered in Bermuda focused on building and managing highly diversified, collateralized retrocession and reinsurance portfolios covering global property catastrophe risks. Results attributable to Markel CATCo Investment Management Ltd. (MCIM), the wholly owned subsidiary formed in conjunction with this transaction, are included with the Company's non-insurance operations, which are not included in a reportable segment.

Total consideration for the acquisition was $205.7 million, all of which was cash. The purchase price was allocated to the acquired assets and liabilities based on estimated fair values at the acquisition date. The Company recognized goodwill of $91.9 million, all of which is expected to be deductible for income tax purposes. The goodwill is primarily attributable to the Company's ability to achieve continued capital growth in excess of that which can be expected for the investment funds previously managed by CATCo IM. The Company also recognized other intangible assets of $113.0 million, primarily related to its investment management agreements. These intangible assets are expected to be amortized over a weighted average period of 14 years.

In connection with the acquisition, the Company instituted performance incentive and retention arrangements for former CATCo employees, whom are now employed by MCIM. Pursuant to these agreements, the Company committed to the payment of performance bonuses derived from the results of the business in 2016 through 2018 and retention bonuses that will be paid annually over the three year period following the acquisition. The total amount of these payments is currently estimated to be $105 million, of which $33.2 million was recognized as compensation expense for the year ended December 31, 2016. The balance will be recognized in the consolidated financial statements as post-acquisition compensation expense over the remaining performance period and as services are provided.

Markel Ventures Acquisitions

In December 2015, the Company acquired 80% of the outstanding shares of CapTech Ventures, Inc. (CapTech), a privately held company headquartered in Richmond, Virginia. CapTech is a management and IT consulting firm, providing services and solutions to a wide array of customers. Under the terms of the acquisition agreement for CapTech, the Company has the option to acquire the remaining equity interests and the remaining equity interests have the option to sell their interests to the Company in the future. The redemption value of the remaining equity interests is generally based on CapTech's earnings in specified periods preceding the redemption date.

Total consideration for the CapTech acquisition was $60.6 million. Total consideration included the estimated fair value of contingent consideration we expected to pay based on CapTech's earnings, as defined in the stock purchase agreement, through 2018. The purchase price was preliminarily allocated to the acquired assets and liabilities based on the estimated fair values at the acquisition date. During 2016, the Company completed the process of determining the fair value of the assets and liabilities acquired with CapTech. There were no material adjustments to the provisional estimates recorded as of December 31, 2015. The Company recognized goodwill of $50.6 million related to this acquisition, none of which is expected to be deductible for income tax purposes. The Company also recognized other intangible assets of $49.2 million, primarily related to customer relationships, and redeemable noncontrolling interests of $13.8 million. These intangible assets are expected to be amortized over a weighted average period of 14 years. Results attributable to this acquisition are included with the Company's non-insurance operations, which are not included in a reportable segment.

In July 2014, the Company acquired 100% of the outstanding shares of Cottrell, Inc. (Cottrell), a privately held company headquartered in Gainesville, Georgia. Cottrell is a leading manufacturer of over-the-road car hauler equipment and related car hauler parts. In June and August 2014, ParkLand Ventures, Inc. (ParkLand) also completed the acquisition of several manufactured housing communities. Total consideration for these acquisitions was $187.0 million, which primarily consisted of cash consideration. Total consideration included the estimated fair value of contingent consideration we expected to pay based on Cottrell's earnings, as defined in the stock purchase agreement, in 2014 and 2015. The Company recognized goodwill of $38.7 million related to these acquisitions, the majority of which we expect to amortize for income tax purposes. The Company also recognized other intangible assets of $78.7 million, including $53.7 million of customer relationships and $13.0 million of trade names, which are expected to be amortized over a weighted average period of 17 years and 10 years, respectively. Results attributable to these acquisitions are included with the Company's non-insurance operations, which are not included in a reportable segment.

Acquisition of Abbey Protection

In January 2014, the Company completed its acquisition of 100% of the share capital of Abbey Protection plc (Abbey), an integrated specialty insurance and consultancy group headquartered in London. Abbey's business is focused on the underwriting and sale of insurance products to small and medium-sized enterprises and affinity groups in the United Kingdom providing protection against legal expenses and professional fees incurred as a result of legal actions or investigations by tax authorities, as well as providing a range of complementary legal and professional consulting services. Results attributable to Abbey's insurance operations are included in the International Insurance segment. Results attributable to Abbey's consultancy operations are reported with the Company's non-insurance operations, which are not included in a reportable segment.

Total consideration for this acquisition was $190.7 million, all of which was cash consideration. The purchase price was allocated to the acquired assets and liabilities based on estimated fair values at the acquisition date. The Company recognized goodwill of $65.8 million, of which $43.0 million was allocated to the International Insurance segment and $22.8 million was allocated to the Company's non-insurance operations. None of the goodwill recognized is expected to be deductible for income tax purposes. The goodwill is primarily attributable to Abbey's assembled workforce and synergies that are expected to result upon integration of Abbey into the Company's insurance operations. The Company also recognized other intangible assets of $113.4 million, including $103.5 million of customer relationships and $9.9 million of trade names. These intangible assets are expected to be amortized over 20 years and 14 years, respectively.

Subsequent Event

On February 1, 2017, the Company entered into a definitive merger agreement to acquire SureTec Financial Corp. (SureTec) for approximately $250 million. SureTec is a Texas-based privately held surety company primarily offering contract, commercial and court bonds. The transaction is subject to customary closing conditions, including insurance regulatory approvals, and is expected to close in the first half of 2017. Upon completion of the acquisition, SureTec's operating results will be included in the Company's U.S. Insurance segment.