10. Acquisition

On December 1, 2015, the Company completed its acquisition of Legacy Hay, a global leader in people strategy and organizational performance, for $470.5 million, net of cash acquired. The purchase price consisted of $252.6 million in cash ($54 million from foreign locations), net of estimated cash acquired and 5,922,136 shares of the Company’s common stock, par value $0.01 per share (the “Consideration Shares”), representing an aggregate value of $217.9 million based on the closing price of the Company’s common stock on The New York Stock Exchange on November 30, 2015. On November 23, 2015, the Company borrowed $150 million from the Term Facility, to finance a portion of the Legacy Hay acquisition purchase price. As part of the acquisition, the Company has committed to a $40 million retention pool (up to $5 million payable within one year of the closing of the acquisition) for certain employees of Legacy Hay subject to certain circumstances. Of the remaining balance, 50% will be payable within 45 days after November 30, 2017 and the remaining 50% will be payable within 45 days after November 30, 2018.

The acquisition strengthens the Company’s intellectual property, enhances our geographical presence, adds complimentary capabilities to further leverage search relationships and broadens capabilities for assessment and development. It improves our ability to support the global business community not only in attracting top talent and designing compensation and reward incentives, but also with an integrated approach to the entire leadership and people continuum. Actual results of operations of Legacy Hay are included in the Company’s consolidated financial statements from December 1, 2015, the effective date of the acquisition, and includes $71.9 million, $746.1 million and $8.6 million in fee revenue, total assets and Adjusted EBITDA, respectively, with an Adjusted EBITDA margin of 11.0%, during the third quarter of fiscal 2016. Legacy Hay is included in the Hay Group segment.

Following is a summary of the net assets acquired of Legacy Hay:


	(in thousands)
Receivables due from clients	$	116,509
Other current assets		16,306
Property and equipment		27,904
Intangibles assets (1)		198,700
Other non-current assets		7,345
Current liabilities		127,099
Deferred compensation and other retirement plans		31,400
Deferred tax liabilities		55,369
Other liabilities		9,118

Net assets acquired		143,778
Purchase price		470,502

Goodwill	$	326,724


Integration/acquisition costs	$	33,815

(1)

Acquisition-related intangible assets acquired in connection with the acquisition of Legacy Hay consist of customer lists and intellectual property of $86.3 million and $10.2 million, respectively, with weighted-average useful lives from the date of purchase of eleven years and seven years, respectively. Acquisition-related intangible assets not subject to amortization acquired in connection with the acquisition of Legacy Hay consist of trademarks of $102.2 million.

The aggregate purchase price for Legacy Hay was allocated on a preliminary basis to the assets acquired and liabilities assumed on their estimated fair values at the date of acquisition. As of January 31, 2016, these allocations remain preliminary as it relates to, among other things, items such as working capital adjustments and income taxes. The measurement period for purchase price allocation ends as soon as information on the facts and circumstances becomes available, not to exceed 12 months. Adjustments to purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisitions occurred.