Acquisition

On September 1, 2015, the Company completed its acquisition of all of the outstanding interests in Concept Capital Markets, LLC ("Concept"), a registered broker-dealer (member Financials Industry Regulatory Authority "FINRA" and SIPC) offering prime brokerage services and outsourced trading. Following the acquisition, Concept was renamed Cowen Prime Services, LLC ("Cowen Prime").

The acquisition was completed for a combination of cash and unregistered shares of the Company's Class A common stock and contingent consideration. In accordance with the terms of the purchase agreement, the Company is also required to pay to the sellers a portion of future net profits of the business over the period through December 31, 2020. The Company estimated the contingent consideration using the income approach (discounted cash flow method) which requires the Company to make estimates and assumptions regarding the future cash flows and profits. Changes in these estimates and assumptions could have a significant impact on the amount recognized. The undiscounted amount can range from zero to $6.7 million.

The acquisition was accounted for under the acquisition method of accounting in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). As such, the results of operations for Concept are included in the accompanying condensed consolidated statements of operations since the date of the acquisition and the assets acquired, liabilities assumed and the resulting goodwill were recorded at their fair values within their respective line items on the accompanying condensed consolidated statement of financial condition (see Note 8).

The Company recognized total identifiable assets of $25.2 million (including cash and cash equivalents of $1.6 million, fixed assets of $0.6 million, intangibles and goodwill of $17.8 million and receivables and other assets of $5.1 million respectively). The Company also recognized accrued expenses and other liabilities of $2.6 million. The Company is currently in the process of finalizing the valuation for certain acquired assets of Concept; therefore, the fair value measurements as of September 30, 2015 and goodwill are preliminary and subject to measurement period adjustments. The allocation of the purchase price to the net assets acquired will be finalized as necessary, up to one year after the acquisition closing date, as information becomes available.

Goodwill, which primarily relates to expected synergies from combining operations, is fully deductible for tax purposes and has been assigned to the broker-dealer segment of the Company.

The Company recognized approximately $0.6 million of acquisition-related costs, including legal, accounting, and valuation services. These costs are included in professional, advisory and other fees in the accompanying condensed consolidated statements of operations.

Included in the accompanying condensed consolidated statements of operations for the period from September 1, 2015 through September 30, 2015 are revenues of $2.2 million and net income of $0.1 million related to the Concept results of operations.

The following unaudited supplemental pro forma information presents condensed consolidated financial results for the nine month periods as if the acquisition was completed as of January 1, 2014. This supplemental pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's results would have been had the acquisition been completed on January 1, 2014, nor does it purport to be indicative of any future results.



	For the nine months ended September, 30
	2015		2014
	(dollars in thousands, except per share data)
	(unaudited)
Revenues	$	375,651	$	328,677
Net income (loss) attributable to Cowen Group, Inc. common stockholders	12,952		24,840

Net income per common share:
Basic	$	0.12	$	0.21
Diluted	$	0.11	$	0.21