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Acquisitions
 12 Months Ended
Dec. 31, 2014
Notes to Financial Statements [Abstract]  
Acquisitions

Note 6 – Acquisitions

We account for acquisitions as business combinations using the acquisition method. Under the acquisition method of accounting, assets acquired and liabilities assumed from these operations are recorded at fair value on the date of acquisition. The consolidated statements of income include the results of operations for each acquired entity from the date of acquisition.

We acquired 100% of the capital stock of Brazil-based Rede Transacoes Eletronicas Ltda. (Rede Trel) on January 31, 2013. The purchase price was $27.7 million, including $1.8 million in estimated contingent consideration. On the acquisition date, Rede Trel had $10 million of cash and cash equivalents that it uses as working capital, resulting in a net cash outflow in our consolidated statement of cash flows of $16 million related to the acquisition. Rede Trel distributes electronic prepaid products, including mobile phone airtime, via a network of approximately 20,000 retail locations across Brazil. Rede Trel’s strong distribution network supplements Brink’s existing payments business, ePago, which has operations in Brazil, Mexico, Colombia and Panama.

We estimated fair values for the assets purchased and liabilities assumed as of the date of the acquisition. This valuation required management to make significant estimates and assumptions. We have completed the valuation work required to allocate the purchase price and our final estimates of the acquisition-date fair values of Rede Trel assets and liabilities are shown in the following table.

Estimated Fair
Value at
(In millions)January 31, 2013
Fair value of purchase consideration
Cash paid for 100% of shares$ 25.9
Fair value of contingent consideration 1.8
Fair value of purchase consideration$ 27.7
Fair value of net assets acquired
Cash$10.0
Accounts receivable7.8
Other current assets19.9
Property and equipment4.0
Intangible assets(a)11.8
Goodwill(b)14.0
Current liabilities(38.8)
Noncurrent liabilities(1.0)
Fair value of net assets acquired$ 27.7

  • Intangible assets are primarily comprised of agent relationships and contractual agreements with the major Brazilian telecommunications companies. As of the acquisition date, the weighted-average amortization period for these intangible assets was 10.9 years.
  • Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating Rede Trel's distribution network into our existing ePago business. All of the goodwill was assigned to the Latin America reporting unit at the acquisition date and is expected to be deductible for tax purposes.