Acquisitions

We acquired operations in various countries in 2017. We accounted for these 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 operations include the results of operations for each acquired entity from the date of acquisition.

Maco Transportadora de Caudales S.A. (“Maco Transportadora”)

Argentine Cash in Transit (“CIT”) and Money Processing business

On July 18, 2017, we acquired 100% of the shares of Maco Transportadora for approximately $205 million. The total purchase price will be paid in cash and approximately $173 million of the purchase consideration was paid to the sellers through December 31, 2017. The remaining amounts will be paid in scheduled installments over the next two years with the final amount based partially on the retention of customer revenue versus a target revenue amount. This contingent consideration arrangement requires us to pay a potential undiscounted amount between $0 to $30 million based on retaining the revenue levels of existing customers at the acquisition date. If there is a shortfall in revenues, a multiple of 2.5 is applied to the revenue shortfall and the contingent consideration to be paid to the former owners is reduced. We used a probability-weighted approach to estimate the fair value of the contingent consideration. The fair value of the contingent consideration reflected in the table below is the present value of the full $30 million potentially payable as of December 31, 2017 as we believe it is unlikely that the contingent consideration payments will be reduced for a revenue shortfall.

The Maco Transportadora business will be integrated into our existing Brink’s Argentina operations. Maco Transportadora has approximately 1,450 employees, 4 branches and over 150 armored vehicles across its operations.

We have provisionally estimated fair values for the assets purchased, liabilities assumed and purchase consideration as of the date of the acquisition in the following table. The determination of estimated fair value required management to make significant estimates and assumptions. The amounts reported are considered provisional as we are completing the valuations that are required to allocate the purchase price. As a result, the allocation of the provisional purchase price may change in the future. There have been no significant changes to our fair value estimates of the net assets acquired for Maco Transportadora.



(In millions)	Estimated Fair Value at Acquisition Date

Fair value of purchase consideration

Cash paid through December 31, 2017	$	173.3
Fair value of future payments to sellers	2.5
Contingent consideration	28.7
Fair value of purchase consideration	$	204.5

Fair value of net assets acquired

Cash	$	10.3
Accounts receivable	16.6
Other current assets	0.6
Property and equipment, net	2.4
Intangible assets^(a)	60.2
Goodwill^(b)	147.6
Other noncurrent assets	0.1
Current liabilities	(11.8		)
Noncurrent liabilities	(21.5		)
Fair value of net assets acquired	$	204.5


(a)	Intangible assets are comprised of customer relationships, trade name and non-competition agreements. Final allocation will be determined once the valuation is complete.


(b)	Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating Maco Transportadora’s operations into our existing Brink’s Argentina operations. All of the goodwill has been assigned to the South America reporting unit and is not expected to be deductible for tax purposes.

Other acquisitions in 2017

On March 14, 2017, we acquired 100% of the capital stock of American Armored Transport, Inc. ("AATI"). AATI provides secured trucking transportation of high-value cargo throughout the continental United States and is expected to complement our existing tractor trailer division in the United States.

On April 19, 2017, we acquired 100% of the capital stock of Muitofacil Holding Ltda., a Brazil-based holding company, and its subsidiary, Muitofacil Arrecadacao e Recebimento Ltda. (together "Pag Facil"). Pag Facil offers bank correspondent services, bill payment processing and mobile phone top-up services in Brazil and is expected to supplement our existing Brazilian payment services businesses.

On June 29, 2017, we acquired 100% of the capital stock of Global Security S.A. (“LGS”). LGS is a Chilean security company specializing in CIT and ATM services and will be integrated into our existing Brink’s Chile operations.

On August 14, 2017, we acquired 100% of the capital stock of Maco Litoral, S.A., (“Maco Litoral”) an Argentina-based company which provides CIT and ATM services.

On October 31, 2017, we acquired 100% of the shares of Temis S.A.S. and its wholly-owned subsidiaries, Les Goelands S.A.S. and Temis Conseil et Formation S.A.R.L (together "Temis"). The Temis business provides CIT and Money Processing services in France and will be integrated into our existing Brink's France operations.

The aggregate purchase price of these five business acquisitions (AATI, Pag Facil, LGS, Maco Litoral and Temis) was approximately $160 million. These five acquired operations employ approximately 1,700 people in the aggregate.

For these five business acquisitions (AATI, Pag Facil, LGS, Maco Litoral and Temis), we have provisionally estimated fair values for the assets purchased and liabilities assumed as of the date of the acquisitions. These estimated amounts are aggregated in the following table. The determination of estimated fair value required management to make significant estimates and assumptions. The amounts reported are considered provisional as we are completing the valuations that are required to allocate the purchase price, as a result, the allocation of the purchase price and the amount of goodwill and intangibles may change in the future. Our fair value estimates of acquisition date goodwill increased approximately $14 million, acquisition date intangible assets decreased approximately $11 million, and acquisition date noncurrent liabilities increased approximately $6 million as compared to our initial estimates in the period of acquisition. There have been no other significant changes to our fair value estimates of the net assets acquired for these acquisitions.



(In millions)	Estimated Fair Value at Acquisition Date

Fair value of purchase consideration

Cash paid through December 31, 2017	$	160.4
Indemnification asset	(4.0		)
Fair value of future payments to sellers	3.9
Fair value of purchase consideration	$	160.3

Fair value of net assets acquired

Cash	$	7.4
Accounts receivable	20.1
Property and equipment, net	13.2
Intangible assets ^(a)	39.6
Goodwill ^(b)	118.9
Other current and noncurrent assets	5.0
Current liabilities	(24.2		)
Noncurrent liabilities	(19.7		)
Fair value of net assets acquired	$	160.3


(a)	Intangible assets are comprised of customer relationships, trade names and non-competition agreements. Final allocation will be determined once all valuations have been completed.

(b)

Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating these acquired operations into our existing operations. The goodwill from these acquisitions has been assigned to the following reporting units: AATI (U.S.), Pag Facil (Brazil), LGS and Maco Litoral (South America), and Temis (France). We do not expect goodwill related to AATI, LGS, Maco Litoral or Temis to be deductible for tax purposes. If certain conditions are met in the future, goodwill related to Pag Facil will be deductible for tax purposes.

Pro Forma disclosures (unaudited)

The pro forma consolidated results of Brink’s presented below reflect a hypothetical ownership on January 1, 2016 of the businesses we acquired during 2017.



(In millions)	Revenue		Net income attributable to Brink's

Actual results included in Brink's consolidated 2017 results for businesses acquired in 2017 from the date of acquisition

Twelve months ended December 31, 2017
Maco Transportadora	$	49.3	7.8
Other acquisitions^(a)	50.8		2.2
Total	$	100.1	10.0

Pro forma results of Brink's for the twelve months ended December 31,
2017
Brink's as reported	$	3,347.0	16.7
Maco Transportadora^(b)	56.9		6.2
Other acquisitions^(b)	65.7		2.6
Total	$	3,469.6	25.5

2016
Brink's as reported	$	3,020.6	34.5
Maco Transportadora^(b)	79.5		6.2
Other acquisitions^(b)	98.0		5.2
Total	$	3,198.1	45.9


(a)	Includes the actual results of AATI, Pag Facil, LGS, Maco Litoral and Temis.


(b)	Represents amounts prior to acquisition by Brink's.

Acquisition costs

We have incurred $2.6 million in transaction costs related to business acquisitions in 2017. These costs are classified in the consolidated statement of operations as selling, general and administrative expenses.