ACQUISITIONS

12 Months Ended

Dec. 31, 2012

ACQUISITIONS

ACQUISITIONS

5.  ACQUISITIONS

The results of operations of the following acquisitions have been included in our consolidated results from the respective acquisition dates. The acquisitions did not have a material effect on our financial position, results of operations or cash flows.

Acquisition-related transaction costs are included in selling, general and administrative expenses in the consolidated statements of operations.

Springhouse and Tracmail

In April 2011, we acquired Springhouse, an appraisal management company that utilizes a nationwide panel of appraisers to provide real estate appraisals principally to mortgage originators, including the members of Lenders One, and real estate asset managers.

In July 2011, we acquired the assembled workforce of Tracmail, a sub-contractor in India that performs asset recovery services.  Prior to acquisition, the costs paid to the sub-contractor were included in outside fees and services within cost of revenue in the consolidated financial statements.

The allocation of the purchase price for these transactions is as follows:

(in thousands)
Accounts receivable	$	289
Premises and equipment	16
Identifiable intangible assets	1,180
Goodwill	3,079
	4,564
Accounts payable and accrued expenses	(2,049		)
Total consideration	$	2,515

MPA

On February 12, 2010, we acquired all of the outstanding membership interests of MPA pursuant to a Purchase and Sale Agreement.  MPA serves as the manager of Lenders One, a national alliance of independent mortgage bankers.  The alliance was established in 2000 and as of December 31, 2012 consisted of 241 members.

Consideration for the transaction consisted of cash, common stock and put option agreements:

(in thousands)	Consideration
Cash	$	29,000
Common stock	23,900
Put option agreements at fair value	1,289
Working capital adjustment	835
Total consideration	$	55,024

The common stock consisted of 1.0 million shares of Altisource’s common stock valued at $24.92 per share based on the closing price of Altisource common stock on February 11, 2010. A portion of the stock consideration (0.3 million shares) was held in escrow two years from the closing date of the acquisition to secure MPA’s indemnification obligations under the Purchase and Sale Agreement. The escrowed shares were released in 2011. In addition, we entered into three put option agreements with certain of the sellers whereby each seller had the right, with respect to an aggregate of 0.5 million shares of our common stock, to put up to 25% of eligible shares each year for a total of four years at a price equal to $16.84 per share. All put agreements expired in December 2011 due to the attainment of certain Altisource share price thresholds.

Acquisition of Fee Based Businesses from Ocwen

On January 31, 2013, we entered into letters of intent with Ocwen to acquire certain fee based businesses associated with Ocwen’s acquisition of Homeward Residential and the anticipated acquisition of the ResCap servicing portfolio (see Note 23 for additional information).