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Acquisitions
 12 Months Ended
Oct. 31, 2018
Business Combinations [Abstract]  
Acquisitions
ACQUISITIONS
 
 
Acquisition of GCA during 2017
On September 1, 2017, we acquired all of the outstanding stock of GCA, a provider of integrated facility services to educational institutions and commercial facilities, for a purchase price of approximately $1.3 billion. As described in Note 18, “Segment and Geographic Information,” we integrated GCA’s operations into our industry group model effective November 1, 2017. As a result of the acquisition, we are now a leading facilities services provider in the education market.
Consideration Transferred
(in millions, except per share data)
 
 
Shares of ABM common stock, net of shares withheld for taxes
 
9.4

ABM common stock closing market price at acquisition date
 
$
44.63

Fair value of ABM common stock at closing
 
421.3

Cash consideration(1)
 
837.5

Total consideration transferred
 
$
1,258.8

(1) Revised during the second quarter of 2018 to reflect a post-closing purchase price adjustment related to a net working capital settlement.
Purchase Price Allocation
 
 
As reported at
 
 
 
As reported at
(in millions)
 
October 31, 2017
 
Adjustments
 
October 31, 2018
Cash and cash equivalents
 
$
2.5

 
$
(2.3
)
 
$
0.2

Trade accounts receivable(1)
 
118.1

 
(1.8
)
 
116.3

Prepaid expenses and other current assets
 
10.3

 
1.7

 
12.0

Property, plant and equipment
 
41.4

 
(4.1
)
 
37.3

Customer relationships(2)
 
340.0

 
—

 
340.0

Trade names(2)
 
9.0

 
(1.0
)
 
8.0

Goodwill(3)
 
933.9

 
(7.0
)
 
926.9

Other assets
 
4.2

 
(0.2
)
 
4.0

Trade accounts payable
 
(9.1
)
 
(0.4
)
 
(9.6
)
Insurance reserves
 
(35.5
)
 
0.3

 
(35.2
)
Income taxes payable
 
(16.5
)
 
7.9

 
(8.6
)
Accrued liabilities
 
(36.5
)
 
(2.3
)
 
(38.8
)
Deferred income tax liability, net
 
(92.6
)
 
7.0

 
(85.6
)
Other liabilities
 
(8.1
)
 
—

 
(8.1
)
Net assets acquired
 
$
1,261.3

 
$
(2.4
)
 
$
1,258.8

(1) The gross amount of trade accounts receivable was $121.9 million, of which $5.6 million is deemed uncollectible.
(2) The amortization periods for the acquired intangible assets are 15 years for customer relationships and 2 years for trade names.
(3) Goodwill is largely attributable to value we expect to obtain from long-term business growth, the established workforce, and buyer-specific synergies. This goodwill is not deductible for income tax purposes.
Financial Information
During the year ended October 31, 2018, we recorded revenue related to GCA of $1.0 billion and operating profit of $33.8 million. The following table presents our unaudited pro forma results for October 31, 2017 and 2016 as though the GCA acquisition occurred on November 1, 2015. These results include adjustments for the estimated amortization of intangible assets, interest expense, and the income tax impact of the pro forma adjustments at the statutory rate of 41%. These results were adjusted to exclude $24.2 million of acquisition-related costs incurred during 2017, which are included in selling, general and administrative expenses in the accompanying consolidated statements of comprehensive income. In addition, they do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the unaudited pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on November 1, 2015.
 
Years Ended October 31,
(in millions)
2017
 
2016
Pro forma revenue
$
6,293.0

 
$
6,153.6

Pro forma income from continuing operations
95.5

 
1.1


Other 2017 Acquisitions
Effective December 1, 2016, we acquired all of the outstanding stock of Mechanical Solutions, Inc. (“MSI”), a provider of specialized HVAC, chiller, and plumbing services, for a purchase price of $12.6 million. The purchase price includes up to $1.0 million of undiscounted contingent consideration that is based on the expected achievement of certain pre-established revenue goals. See Note 7, “Fair Value of Financial Instruments,” regarding our valuation of contingent consideration liabilities. As of December 1, 2016, the operations of MSI are included in our Technical Solutions segment.
Effective December 1, 2016, we also acquired all of the outstanding stock of OFJ Connections Ltd (“OFJ”), a provider of airport transportation services in the United Kingdom, for a purchase price of $6.3 million. As of December 1, 2016, the operations of OFJ are included in our Aviation segment.
2016 Acquisitions
Effective September 30, 2016, we acquired all of the outstanding stock of BRBIBR Limited, a company that held all of the outstanding shares of 8 Solutions Ltd. (“8 Solutions”), a provider of technical cleaning services to data centers in the United Kingdom and certain other locations, for a purchase price of $16.1 million. As of September 30, 2016, the operations of 8 Solutions are included in our Business & Industry segment, and 8 Solutions has been renamed “ABM Critical Solutions Limited.”
Effective December 1, 2015, we acquired all of the outstanding stock of Westway Services Holdings (2014) Ltd. (“Westway”), a provider of technical services to clients in the United Kingdom, for a purchase price of $81.0 million. This acquisition expanded the geographical reach of our technical solutions business to the United Kingdom, resulting in the allocation of a significant portion of the purchase price to goodwill. As such, we recorded goodwill and intangible assets of $53.8 million and $22.5 million, respectively. The goodwill associated with this acquisition is not deductible for tax purposes. See Note 10, “Goodwill and Other Intangible Assets,” for information related to impairment charges we recorded during 2018. As of December 1, 2015, the operations of Westway are included in our Technical Solutions segment.
Pro Forma and Other Financial Information
Except for GCA, we do not present pro forma and other financial information for our other acquisitions, as they are not considered material business combinations individually or on a combined basis.