Acquisitions (Tables)

12 Months Ended

Dec. 31, 2012

Fairfax, LLC [Member]

Summary of Purchase Price Allocation

The Company allocated the purchase price as follows (dollars in thousands):

Restricted cash	$	100
Other assets		220
Accounts payable		(23	)
Purchase price	$	297

PrinceRidge [Member]

Summary of Assets Acquired and Liabilities Assumed

The following table summarizes the amounts of identified assets acquired and liabilities assumed at the acquisition date of May 31, 2011. 

	Total Estimated Fair Value as of Acquisition Date (provisional) (1)			Measurement Period Adjustments			Total Estimated Fair Value as of Acquisition Date  (final)
	(dollars in thousands)
Assets acquired:
Cash and cash equivalents	$	2,149		$	—		$	2,149
Receivables from brokers, dealers, and clearing agencies		9,382			—			9,382
Other receivables		1,815			—			1,815
Investments-trading		42,407			—			42,407
Receivables under resale agreements		158,688			—			158,688
Other assets		4,730			—			4,730
Liabilities assumed:
Accrued compensation		(1,725	)		—			(1,725	)
Accounts payable and other liabilities		(2,877	)		—			(2,877	)
Trading securities sold, not yet purchased		(38,605	)		—			(38,605	)
Securities sold under agreement to repurchase		(158,620	)		—			(158,620	)
Fair value of existing PrinceRidge net assets		17,344			—			17,344
Purchase price (2) (4)	$	18,502		$	(93	)	$	18,409
Excess of purchase price over net fair value		1,158			(93	)		1,065
Less amount allocated to intangible asset (3)		(166	)		—			(166	)
Goodwill (4) (5)	$	992		$	(93	)	$	899

(1) As previously reported in the Company’s 2011 Annual Report on Form 10-K.

(2) The purchase price represents the fair value of PrinceRidge retained by the members of PrinceRidge other than the Operating LLC:

	Total Estimated Fair Value as of Acquisition  Date (provisional)			Measurement Period Adjustments			Total Estimated Fair Value as of Acquisition Date (final)
	(dollars in thousands)
Summary Purchase Accounting
Net Fair Value Summary
Net Fair Value of IFMI Contribution	$	45,000		$	—		$	45,000
Net Fair Value of PrinceRidge immediately prior to IFMI Contribution		17,344			—			17,344
Net Fair Value of PrinceRidge After IFMI Contribution		62,344			—			62,344
Effective Ownership Percentage (as negotiated)
IFMI		70.3	%		0.02	%		70.5	%
Non-Controlling Interest		29.7	%		(0.02	)%		29.5	%
Total		100.0	%		—			100.0	%
Allocable Net Fair Value of PrinceRidge After IFMI Contribution
IFMI		43,842			93			43,935
Non-Controlling Interest (purchase price)		18,502			(93	)		18,409
Total	$	62,344		$	—		$	62,344

See note 18 for a description of the redeemable non-controlling interest. The excess of the purchase price over the net fair value of PrinceRidge immediately prior to the IFMI contribution equals $1,065 calculated as the purchase price of $18,409 minus the fair value of PrinceRidge prior to IFMI’s contribution of $17,344. The excess of $1,065 can also be calculated as IFMI’s contribution of $45,000 minus IFMI’s allocable fair value of PrinceRidge subsequent to IFMI’s contribution of $43,935.

(3) The intangible asset of $166 represented the estimated value of the broker-dealer license, which was allocated to the Capital Markets business segment.

(4) Goodwill recognized as of the acquisition date was allocated to the Capital Markets business segment. The December 31, 2011 balance of goodwill related to the acquisition of PrinceRidge was not retrospectively adjusted for the measurement period adjustment since the Company believed this adjustment was not material. As of December 31, 2012 and 2011, the goodwill related to the acquisition of PrinceRidge reported on its consolidated balance sheets was $899 and $992, respectively. See note 12.

Summary of Pro Forma Consolidated Information

The following unaudited pro forma summary presents consolidated information of the Company as if the acquisition had occurred on January 1, 2010:

	Pro forma Year ended December 31,
	2011			2010
	(dollars in thousands)
Revenue	$	114,007		$	150,294
Earnings (loss) attributable to IFMI	$	(10,527	)	$	5,097

JVB Holdings [Member]

Summary of Purchase Price Allocation

The following table summarizes the calculation of the fair value of consideration transferred by the Company to acquire JVB Holdings (dollars in thousands except share and per share data):

Equity consideration:
Shares of IFMI issued (1)		313,051
Multiplied by (2)	$	4.89
Value of stock consideration	$	1,531	$	1,531
Cash consideration (3)				14,956
Contingent payments due (4)				326
Total purchase price			$	16,813

(1) Excluded 559,020 units of the Operating LLC issued to certain JVB Holdings Sellers that remained employees of JVB Holdings. These units vest over a three year period and are treated as compensation for future service and not part of the purchase price. See notes 19 and 20.

(2) Represented the closing price of IFMI shares on January 13, 2011.

(3) When closing the transaction, payment was made based on an estimate of JVB Holdings’ tangible net worth. However, a mechanism existed in the contract whereby the Company would owe additional funds or could recapture funds to the extent JVB Holdings’ tangible net worth differed from the amount estimated. The amount of cash consideration represented actual cash paid at closing of $15,044 less $88 receivable from escrowed proceeds for the tangible net worth adjustment. Also, cash consideration excluded $2,482 to be paid over time to the Management Employees. The amount is contingent upon the individuals remaining employees. It is earned ratably over a three-year period. If the employee terminates employment during the three year period, any unearned portion is refundable to the Company. It is treated as compensation for future services and not part of the purchase price.

(4) Represents contingent payments due to the Sellers based on performance targets. A specific business unit of JVB Holdings was required to earn a minimum amount of revenue within 12 months of the business combination in order for this amount to be due to the owners of JVB Holdings. If that threshold was met, the owners of JVB Holdings would receive an additional payment of $384 which the Company would have treated as contingent consideration. Accordingly, the Company determined the fair value of this arrangement and recorded a liability equal to the fair value as of the date of the business combination. The Company had determined that the fair value of this obligation at the business combination date was $326. The Company carried this liability at fair value and any future adjustments in fair value were recognized in earnings. As of December 31, 2011, the Company carried this liability at $0 on the Company’s consolidated balance sheets and recognized income of $326 for the year ended December 31, 2011 which was included in principal transactions and other income in the Company’s consolidated income statement.

Summary of Assets Acquired and Liabilities Assumed

The following table summarizes the amounts of identified assets acquired and liabilities assumed at the acquisition date as of January 1, 2011 (dollars in thousands):

	Total Estimated Fair Value as of Acquisition Date
Assets acquired:
Cash and cash equivalents	$	91
Receivables from brokers, dealers and clearing agencies (deposits with clearing organizations)		100
Investments-trading		31,935
Other assets (1) (2)		1,077
Liabilities assumed:
Payables to brokers, dealers, and clearing agencies		(17,655	)
Accounts payable and other liabilities		(1,221	)
Trading securities sold, not yet purchased		(4,497	)
Fair value of net assets acquired		9,830
Purchase price for net assets acquired	$	16,813
Goodwill (2) (3)	$	6,983

(1) Other assets are comprised of a purchase accounting adjustment of $166, which represents the estimated value of the broker-dealer license. The intangible asset of $166 related to the broker-dealer license was allocated to the Capital Markets business segment.

(2) During the measurement period, which ended on January 13, 2012, an adjustment of $30 reducing the fair value of the assets acquired was made with a corresponding adjustment to increase goodwill by $30.

(3) Goodwill recognized as of the acquisition date was allocated to the Capital Markets business segment.