Acquisitions and Dispositions

In 2018, we acquired one business operation and additionally acquired a controlling interest in a second business operation. In 2017, we acquired six business operations. 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.

Dunbar Armored, Inc. ("Dunbar")

U.S. cash management business

On August 13, 2018, we acquired 100% of the shares of Dunbar for approximately $547 million, subject to a working capital adjustment. The Dunbar business is being integrated with our existing Brink's U.S. operations. This acquisition is expected to expand our customer base in the U.S. as a result of Dunbar's focus on small-to-medium sized retailers and financial institutions. Dunbar has approximately 5,400 employees, 78 branches and over 1,600 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. Our fair value estimates of acquisition date intangible assets decreased approximately $20 million, acquisition date goodwill increased approximately $24 million, acquisition date other noncurrent assets increased approximately $11 million and acquisition date noncurrent liabilities increased approximately $13 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 the Dunbar acquisition.



(In millions)	Estimated Fair Value at Acquisition Date

Fair value of purchase consideration

Cash paid through December 31, 2018	$	546.8
Fair value of purchase consideration	$	546.8

Fair value of net assets acquired

Cash	$	25.8
Accounts receivable	31.9
Other current assets	11.7
Property and equipment, net	57.0
Intangible assets^(a)	162.0
Goodwill^(b)	307.1
Other noncurrent assets	21.1
Current liabilities	(29.7		)
Noncurrent liabilities	(40.1		)
Fair value of net assets acquired	$	546.8


(a)	Intangible assets are composed of customer relationships ($148 million fair value and 15 year amortization period) and rights related to the trade name ($14 million fair value and 8 year amortization period). 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 Dunbar’s operations with our existing Brink’s U.S. operations. All of the goodwill has been assigned to the U.S. reporting unit and is expected to be deductible for tax purposes.

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

Argentine CIT and money processing business

On July 18, 2017, we acquired 100% of the shares of Maco Transportadora for approximately $206 million. The total purchase price will be paid in cash and approximately $190 million of the purchase consideration was paid to the sellers through December 31, 2018. The remaining amount will be paid in scheduled installments ending in the fourth quarter of 2019 with the final amount based partially on the retention of customer revenue versus a target revenue amount. This contingent consideration arrangement required us to pay a potential 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 $15 million which remains potentially payable as of December 31, 2018 as we believe it is unlikely that the contingent consideration payments will be reduced for a revenue shortfall.

The Maco Transportadora business is being 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 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. 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, 2018	$	189.6
Indemnification asset	(0.3		)
Fair value of future payments to sellers	1.5
Contingent consideration	15.1
Fair value of purchase consideration	$	205.9

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)	148.8
Other noncurrent assets	0.1
Current liabilities	(11.8		)
Noncurrent liabilities	(21.3		)
Fair value of net assets acquired	$	205.9


(a)	Intangible assets are comprised of customer relationships, trade name and non-competition agreements.


(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

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.

On December 4, 2018, we acquired 60% of the shares of Worldbridge Secure Logistics Co., Ltd. ("Worldbridge"), a Cambodian company that provides CIT and money processing services.

The aggregate purchase price of these six business acquisitions (AATI, Pag Facil, LGS, Maco Litoral, Temis and Worldbridge) was approximately $156 million. These six acquired operations employ approximately 1,800 people in the aggregate.

For these six business acquisitions (AATI, Pag Facil, LGS, Maco Litoral, Temis and Worldbridge), we have 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 included in the table below for the Worldbridge acquisition are considered provisional as we are completing the valuation that is 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 $9 million, acquisition date intangible assets decreased approximately $10 million and acquisition date noncurrent liabilities increased approximately $12 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 and noncontrolling interests

Cash paid through December 31, 2018	$	162.5
Indemnification asset	(9.8		)
Fair value of future payments to sellers	3.7
Fair value of purchase consideration	$	156.4
Fair value of noncontrolling interests	1.1
Fair value of purchase consideration and noncontrolling interests	157.5

Fair value of net assets acquired

Cash	$	7.6
Accounts receivable	20.3
Property and equipment, net	14.1
Intangible assets ^(a)	41.6
Goodwill ^(b)	115.8
Other current and noncurrent assets	7.4
Current liabilities	(23.7		)
Noncurrent liabilities	(25.6		)
Fair value of net assets acquired	$	157.5


(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), Temis (France) and Worldbridge (Asia). We do not expect goodwill related to AATI, LGS, Maco Litoral, Temis or Worldbridge to be deductible for tax purposes. Goodwill related to Pag Facil will be deductible for tax purposes.

Actual and Pro Forma (unaudited) disclosures

The pro forma consolidated results of Brink’s presented below are unaudited and reflect a hypothetical ownership on January 1, 2016 of the businesses we acquired during 2017 and a hypothetical ownership as of January 1, 2017 for the businesses we acquired in 2018.



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

Actual results included in Brink's consolidated 2018 and 2017 results for businesses acquired in 2018 and 2017 from the date of acquisition

Twelve months ended December 31, 2018
Dunbar	$	148.7	2.4
Maco Transportadora	77.2		13.1
Other acquisitions^(a)	104.8		2.9
Total	$	330.7	18.4

Twelve months ended December 31, 2017
Dunbar	$	—	—
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,
2018
Brink's as reported	$	3,488.9	(33.3	)
Dunbar	244.0		5.4
Maco Transportadora^(b)	—		—
Other acquisitions^(b)	1.4		0.3
Total	$	3,734.3	(27.6	)

2017
Brink's as reported	$	3,347.0	16.7
Dunbar	386.6		2.4
Maco Transportadora^(b)	56.9		6.2
Other acquisitions^(b)	66.7		2.8
Total	$	3,857.2	28.1


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


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

Acquisition costs

We have incurred $6.7 million in transaction costs related to business acquisitions in 2018 ($2.6 million in 2017). These costs are classified in the consolidated statement of operations as selling, general and administrative expenses.

Acquisition of noncontrolling interest

In November 2018, we completed the acquisition of the 42% noncontrolling interest in our consolidated subsidiary, Brink's de Colombia, S.A. We now own 100% of the shares of this subsidiary and we accounted for this increase in ownership interest as an equity transaction.

Dispositions

On June 1, 2018, we sold 100% of our ownership interest in a French airport security services company for a net sales price of approximately $19 million. We recognized an $11.2 million gain on the sale of this business, which is reported in interest and other nonoperating income (expense) in the consolidated statements of operations. The French airport security services company was part of the Rest of World reportable segment and reported revenues of $79 million in 2017.