Acquisitions

12 Months Ended

Dec. 31, 2011

Acquisitions [Abstract]

ACQUISITIONS

4. 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 performed asset recovery services. Prior to acquisition, the costs paid to the sub-contractor were included in Outside Fees and Services (included in Cost of Revenue in the Consolidated Financial Statements).

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

		September 30,
(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

Management has assigned the following lives to identified assets acquired as a result of the acquisitions:

		September 30,
	Estimated Life (in Years)
Premises and Equipment		2 – 5
Trademarks (1)		4
Customer Lists (1)		6
Non-compete (1)		2
Goodwill		Indefinite
(1)       The identifiable assets are subject to amortization on a straight-line basis as this best approximates the benefit period related to these assets.

The goodwill arising from the Springhouse acquisition assigned to our Mortgage Services segment relates principally to in-place workforce and our ability to go to market more quickly with a retail origination appraisal business. The goodwill arising from the Tracmail acquisition assigned to our Financial Services segment relates principally to in-place workforce. All goodwill and intangible assets related to the acquisitions are expected to be amortizable and deductible for income tax purposes.

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, 2011 consisted of 214 members.

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

		September 30,
(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 has 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 remaining put agreements expired in December 2011 due to the attainment of certain Altisource share price thresholds.