Acquisitions

6 Months Ended

Jun. 30, 2019

Acquisitions:

2019 Acquisition

On March 29, 2019, the Company entered into a partnership agreement with an enterprise application software provider to acquire their Content as a Service (“CaaS”) business, which included the Environmental Health and Safety Regulatory Content and Environmental Health and Safety Regulatory Documentation teams and data assets, for a net cash purchase price of $69.1 million. The CaaS business has become part of the Company's Energy and Specialized Markets segment. This transaction strengthened the Company’s environmental health and safety services business and extended its global customer footprint and European operations. The preliminary purchase price allocation of the CaaS business resulted in the following:



	CaaS
Cash and cash equivalents	$	3.7
Other current assets		3.0
Fixed assets		0.1
Intangible assets		34.4
Goodwill		42.9
Deferred income taxes, net		0.1
Total assets acquired		84.2
Current liabilities		(1.3	)
Deferred revenues		(10.1	)
Total liabilities assumed		(11.4	)
Net assets acquired		72.8
Cash acquired		(3.7	)
Net cash purchase price	$	69.1

The preliminary amounts assigned to intangible assets by type for the CaaS business are summarized in the table below:



	Weighted Average Useful Life	Total
Technology-based	7 years	$	4.0
Marketing-related	3 years		0.3
Customer-related	12 years		15.5
Database-related	10 years		14.6
Total intangible assets		$	34.4

The preliminary allocations of the purchase price for the 2018 and 2019 acquisitions with less than a year ownership are subject to revisions as additional information is obtained about the facts and circumstances that existed as of each acquisition date. The revisions may have a significant impact on the condensed consolidated financial statements. The allocations of the purchase price will be finalized once all information is obtained, but not to exceed one year from the acquisition date. The primary areas of the purchase price allocation that are not yet finalized relate to operating leases, income and non-income taxes, deferred revenues, the valuation of intangible assets acquired, and residual goodwill. The preliminary amounts assigned to intangible assets by type for these acquisitions were based upon the Company's valuation model and historical experiences with entities with similar business characteristics.

For the six months ended June 30, 2019, the Company finalized the purchase accounting for the acquisitions of Marketview Limited, Business Insight Limited, and Validus-IVC Limited during the measurement periods in accordance with ASC 805, Business Combinations. The impact of finalization of the purchase accounting associated with these acquisitions was not material to the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2019 and 2018.

For the three and six months ended June 30, 2019, the Company incurred transaction costs of $0.3 million and $1.2 million, respectively. For the three and six months ended June 30, 2018, the Company incurred transaction costs of $0.5 million and $1.2 million, respectively. The transaction costs were included within "Selling, general and administrative" expenses in the accompanying condensed consolidated statements of operations. Of the total goodwill associated with the CaaS acquisition of $42.9 million, $13.1 million associated with the stock purchase is not deductible for tax purposes.

The 2019 acquisition was immaterial to the Company's condensed consolidated financial statements for the three and six months ended June 30, 2019 and 2018, and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented.

On July 24, 2019, the Company signed a definitive agreement to acquire 100% of the stock of Keystone Aerial Surveys, Inc. ("Keystone") for a purchase price of approximately $30.0 million to expand its remote imagery business. Keystone will source imagery by providing customers geospatial solutions and become part of the Company's Insurance segment. The purchase price is expected to be funded from the general assets of the Company and proceeds from the committed senior unsecured Syndicated Revolving Credit Facility (the "Credit Facility"). The transaction is anticipated to close at the end of July 2019, subject to the completion of customary closing conditions. This information will be included in the quarterly report on Form 10-Q for the nine months ending September 30, 2019.

Acquisition Escrows and Related Liabilities

Pursuant to the related acquisition agreements, the Company has funded various escrow accounts to satisfy pre-acquisition indemnity and tax claims arising subsequent to the acquisition date, as well as a portion of the contingent payments. At June 30, 2019 and December 31, 2018, the current portion of the escrows amounted to $6.0 million and $31.2 million, and the noncurrent portion of the escrows amounted to $8.6 million and $8.7 million, respectively. The decrease in the current portion of the escrows was primarily related to $25.0 million of escrow releases mostly associated with the Company's 2017 acquisitions. The current and noncurrent portions of the escrows have been included in “Other current assets” and "Other assets" in the accompanying condensed consolidated balance sheets, respectively.

The acquisitions of Emergent Network Intelligence Limited, Healix International Holdings Limited, Rebmark Legal Solutions Limited, PowerAdvocate, Inc. and Validus-IVC Limited include acquisition related contingencies, for which the sellers of these acquisitions could receive additional payments by achieving the specific predetermined revenue and EBITDA earn-out targets for exceptional performance. The Company believes that the liabilities recorded as of June 30, 2019 and December 31, 2018 reflect the best estimate of acquisition related contingent payments. The associated current liabilities for these acquisitions of $26.3 million and $12.7 million have been included in “Accounts payable and accrued liabilities” in the accompanying condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018, respectively. The associated noncurrent liabilities for these acquisitions of $32.1 million and $28.3 million have been included in “Other liabilities” in the accompanying condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018, respectively.