Acquisitions

The Risk and Insurance Services segment completed three acquisitions during the first three months of 2016.

February – Marsh & McLennan Agency ("MMA") acquired The Celedinas Agency, Inc., a Florida-based brokerage firm providing property and casualty and marine insurance as well as employee benefits services to businesses and individuals, and Aviation Solutions, LLC, a Missouri-based aviation risk advisor and insurance broker.

March – MMA acquired Corporate Consulting Services, Ltd., a New York-based insurance brokerage and human resource consulting firm.

The Consulting segment completed one acquisition during the first three months of 2016.


•	January – Mercer acquired The Positive Ageing Company Limited, a UK-based firm providing advice on issues surrounding the aging workforce.

Total purchase consideration for acquisitions made during the first three months of 2016 was $103 million, which consisted of cash paid of $77 million and deferred purchase and estimated contingent consideration of $26 million. Contingent consideration arrangements are based primarily on EBITDA and revenue targets over a period of 3 years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. The Company also paid $25 million of deferred purchase consideration and $18 million of contingent consideration related to acquisitions made in prior years.

The following table presents the preliminary allocation of the acquisition cost to the assets acquired and liabilities assumed during 2016 based on their fair values:



For the Three Months Ended March 31, 2016
(In millions of dollars)
Cash	$	77
Estimated fair value of deferred/contingent consideration	26
Total Consideration	$	103
Allocation of purchase price:
Cash and cash equivalents	$	2
Accounts receivable, net	1
Property, plant, and equipment	1
Other intangible assets	42
Goodwill	61
Total assets acquired	107
Current liabilities	2
Other liabilities	2
Total liabilities assumed	4
Net assets acquired	$	103

Other intangible assets acquired are based on initial estimates and subject to change based on final valuations during the measurement period after the acquisition date. The following chart provides information of other intangible assets acquired during 2016:

(a) Primarily non-compete agreements, trade names and developed technology.

Prior-Year Acquisitions

The Risk and Insurance Services segment completed thirteen acquisitions during 2015.


•	January – Marsh acquired INGESEG S.A., an insurance brokerage located in Argentina.


•	May – Marsh acquired Sylvite Financial Services, Inc., a Canada-based insurance consulting firm and Sumitomo Life Insurance Agency America, Inc., an employee benefits brokerage and consulting firm providing employee benefit and other services to U.S.-based subsidiaries of Japanese companies.


•	June – Marsh & McLennan Agency ("MMA") acquired MHBT, Inc., a Texas-based insurance broker and Marsh acquired SIS Co. Ltd, a Korea-based insurance broker and advisor.

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July – MMA acquired Vezina, a Canada-based independent insurance brokerage firm, Tequesta Insurance Advisors, an employee benefits insurance provider based in Florida, Cline Wood Agency, a Kansas City-based independent specialty insurance agency and J.W. Terrill, a Missouri-based independent insurance agency. Marsh acquired SMEI Group Ltd., a U.K.-based insurance broker providing specialist commercial insurance to small and medium-sized firms.


•	August – Marsh acquired Dovetail Insurance, a leading provider of insurance technology services to the U.S. small commercial market.


•	October – MMA acquired Dawson Insurance Agency, a North Dakota-based agency providing commercial and personal insurance, surety bonds, safety and loss control programs, and employee benefits services.


•	December – Marsh acquired Jelf Group, PLC, a U.K.-based insurance broking and financial consulting firm.

The Consulting segment completed eight acquisitions during 2015.


•	February – Oliver Wyman acquired TeamSAI, a Georgia-based provider of consulting and technical services to the transportation industry, and Mercer acquired Strategic Capital Management AG, a Switzerland-based institutional investment advisor.


•	June – Mercer acquired Kepler Associates, a U.K.-based executive remuneration specialist.


•	August – OWG acquired the Hong Kong and Shanghai franchises of OC&C Strategy Consultants.


•	September – Mercer acquired Comptryx, a global pay and workforce metrics business specializing in the technology sector.


•	November – Mercer acquired HR Business Solutions (Asia) Limited, a Hong Kong-based compensation and employee benefits consulting firm, and Gama Consultores Associados Ltda, a Brazil-based retirement consulting firm.


•	December – Mercer acquired CPSG Partners, a Workday Services partner assisting clients worldwide to maximize the value of Workday Financial Management and Human Capital Management.

Total purchase consideration for acquisitions made during the first three months of 2015 was $32 million, which consisted of cash paid of $20 million and deferred purchase and estimated contingent consideration of $12 million. Contingent consideration arrangements are primarily based on EBITDA and revenue targets over two to four years. The fair value of the contingent consideration was based on projected revenue and earnings of the acquired entities. Estimated fair values of assets acquired and liabilities assumed are subject to adjustment when purchase accounting is finalized. In the first three months of 2015, the Company also paid $26 million of deferred purchase consideration and $19 million of contingent consideration related to acquisitions made in prior years. In addition, the Company purchased other intangible assets in the amount of $3 million.

Pro-Forma Information

While the Company does not believe its acquisitions in the aggregate are material, the following unaudited pro-forma financial data gives effect to the acquisitions made by the Company during 2016 and 2015. In accordance with accounting guidance related to pro-forma disclosures, the information presented for current year acquisitions is as if they occurred on January 1, 2015 and reflects acquisitions made in 2015 as if they occurred on January 1, 2014. The unaudited pro-forma information adjusts for the effects of amortization of acquired intangibles. The unaudited pro-forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if such acquisitions had occurred on the dates indicated, nor is it necessarily indicative of future consolidated results.



	Three Months Ended March 31,
(In millions, except per share figures)	2016		2015
Revenue	$	3,343	$	3,330
Income from continuing operations	$	491	$	509
Net income attributable to the Company	$	482	$	492
Basic net income per share:
– Continuing operations	$	0.92	$	0.92
– Net income attributable to the Company	$	0.92	$	0.91
Diluted net income per share:
– Continuing operations	$	0.92	$	0.91
– Net income attributable to the Company	$	0.92	$	0.90

The consolidated statements of income include the results of operations of acquired companies since their respective acquisition dates. The consolidated statements of income for the three-month period ended March 31, 2016 include approximately $2 million of revenue and less than $1 million of operating income related to acquisitions made in 2016.

Weighted Average Amortization Period

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