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Business Acquisitions
6 Months Ended
Jun. 30, 2019
Business Acquisition [Line Items]  
Business Combination Disclosure Business Acquisitions
Callcredit Acquisition
On June 19, 2018, we acquired 100% of the equity of Callcredit Information Group, Ltd. (“Callcredit”) for $1,408.2 million in cash, funded primarily by additional borrowings against our Senior Secured Credit Facility. See Note 9, “Debt,” for additional information about our Senior Secured Credit Facility. There was no contingent consideration resulting from this transaction. Callcredit, founded in 2000, is a United Kingdom-based information solutions company that, like TransUnion, provides data, analytics and technology solutions to help businesses and consumers make informed decisions. International expansion is a key growth strategy for TransUnion, and we expect to leverage strong synergies across TransUnion’s and Callcredit’s business models and solutions.
Callcredit’s 2018 revenue and operating income since the date of acquisition for the three and six months ended June 30, 2018, are included as part of the International segment in the accompanying consolidated statements of income and are not material.
For the six months ended June 30, 2018, on a pro-forma basis assuming the transaction occurred on January 1, 2017, combined pro-forma revenue of TransUnion and Callcredit was $1,188.2 million and combined pro-forma net income from continuing operations was $118.8 million. For the six months ended June 30, 2018, combined pro-forma net income from continuing operations was adjusted to exclude $18.2 million of acquisition-related costs and $9.4 million of financing costs expensed in 2018.
We identified and categorized certain operations of Callcredit that we do not consider core to our business as discontinued operations of our International segment as of the date of acquisition. These discontinued operations consist of businesses that do not align with our stated strategic objectives. As of June 30, 2019, we have disposed of all of these businesses and do not expect to have a significant continuing involvement with any of these operations. At December 31, 2018, we categorized the assets and liabilities of these discontinued operations on separate lines on the face of our balance sheet and reflect them as of the date of acquisition as discontinued operations in the table below.
Purchase Price Allocation
The final allocation of the purchase price, including our estimate of the fair values of the identifiable assets and goodwill, to the assets acquired and liabilities assumed on the date of acquisition, consisted of the following:
(in millions)
 
Fair Value
Trade accounts receivable
 
$
20.8

Property and equipment
 
3.2

Goodwill(1)
 
757.1

Identifiable intangible assets
 
720.1

All other assets
 
55.0

Assets of discontinued operations(2)
 
57.1

Total assets acquired
 
1,613.3

 
 
 
All other liabilities
 
(185.5
)
Liabilities of discontinued operations(2)
 
(19.6
)
Net assets of the acquired company
 
$
1,408.2

(1)
For tax purposes, none of the goodwill is tax deductible.
(2)
We have categorized certain businesses of Callcredit as discontinued operations in our consolidated financial statements. As of June 30, 2019, we have disposed of all of these businesses.
We recorded the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed as goodwill in a new reportable unit in our International segment. The purchase price of Callcredit exceeded the preliminary fair value of the net assets acquired primarily due to growth opportunities, the assembled workforce, synergies associated with internal use software and other technological and operational efficiencies.
Identifiable Amortizable Intangible Assets
The fair values of the amortizable intangible assets acquired consisted of the following:
(in millions)
 
Estimated Useful Life
 
Fair Value
Database and credit files
 
15 years
 
$
502.0

Customer relationships
 
15 years
 
155.0

Technology and software
 
5 years
 
62.4

Trademarks
 
2 years
 
0.7

Total identifiable assets
 
 
 
$
720.1

We estimate the weighted-average useful life of the identifiable intangible assets to be approximately 14.1 years, resulting in approximately $51.0 million of annual amortization.
Acquisition Costs
As of June 30, 2019, we have incurred approximately $20.4 million of acquisition-related costs, including $19.9 million incurred in prior years. These costs include investment banker fees, legal fees, due diligence and other external costs that we have recorded in other income and expense. We may incur additional acquisition-related costs, including legal fees, valuation fees and other professional fees in the next several quarters that we will record in other income and expense.
Other Acquisitions
During the second quarter of 2018, we acquired 100% of the equity of iovation, Inc. (“iovation”) and Healthcare Payment Specialists, LLC (“HPS”). During the fourth quarter of 2018, we acquired 100% of the equity of Rubixis, Inc (“Rubixis”). During the second quarter of 2019, we acquired 100% of the equity of TruSignal, Inc. (“TruSignal”).
iovation is a provider of advanced device identity and consumer authentication services that helps businesses and consumers safely transact in a digital world. HPS provides expertise and technology solutions to help medical care providers maximize Medicare reimbursements. Rubixis is an innovative healthcare revenue cycle solutions company that helps providers maximize reimbursement from insurance payers. TruSignal is an innovative leader in people-based marketing technology for Fortune 500 brands, agencies, platforms, publishers and data owners.
The results of operations of iovation, HPS, Rubixis, and TruSignal, which are not material to our consolidated financial statements, have been included as part of our U.S. Markets segment (formerly U.S. Information Services) in our consolidated statements of income since the date of the acquisition.
We finalized the purchase accounting for iovation and HPS during the second quarter of 2019. The final allocation of the purchase price for these two entities resulted in $230.2 million of goodwill and $208.5 million of amortizable intangible assets recorded in addition to what we recorded for Callcredit as discussed above. The weighted-average useful lives of the amortizable intangible assets are approximately 10.6 years, resulting in approximately $19.7 million of annual amortization.