Acquisitions and Dispositions

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Acquisitions and Dispositions

Acquisitions and Dispositions

Acquisitions

We account for 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 condensed consolidated statements of operations include the results of operations for each acquired entity from the date of acquisition.

G4S International Logistics Group Limited

On March 9, 2020, we acquired 100% of the capital stock of G4S International Logistics Group Limited, a UK-based company that directly or indirectly owns controlling interests in multiple business operations in ten other markets (together "G4Si") for $90.1 million. The G4Si business specializes in secure logistics and storage of highly valuable commodities including banknotes, precious metals, diamonds and jewelry. G4Si operations generate approximately $90 million in annual revenues and are expected to supplement our existing global services business.

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.

(In millions)	Estimated Fair Value at Acquisition Date
Fair value of purchase consideration
Cash paid through March 31, 2020	$	88.8
Liabilities assumed from seller	1.6
Receivable from seller	(0.3		)
Fair value of purchase consideration	$	90.1
Fair value of net assets acquired(a)
Cash	$	17.1
Accounts receivable	12.1
Other current assets	3.0
Property and equipment, net	1.8
Intangible assets(b)	20.7
Goodwill(c)	55.5
Other noncurrent assets	4.4
Current liabilities	(16.4		)
Noncurrent liabilities	(8.1		)
Fair value of net assets acquired	$	90.1

(a) Final allocation will be determined once the valuation is complete.

(b) Intangible assets are composed of customer relationships ($21 million fair value and 10 year amortization period).

(c) Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating G4Si’s operations with our existing global services operations. Goodwill has been provisionally assigned to the Global Markets-EMEA reporting unit ($47.4 million) and the Global Markets-Asia reporting unit ($8.1 million). We do not currently expect goodwill in these reporting units to be deductible for tax purposes.

Rodoban Transportes Aereos e Terrestres Ltda., Rodoban Servicos e Sistemas de Seguranca Ltda., and Rodoban Seguranca e Transporte de Valores Ltda ("Rodoban")

On January 4, 2019, we acquired 100% of the capital stock of Rodoban in Brazil for $134 million. Rodoban provides cash-in-transit, money processing and ATM services and generates annual revenues of approximately $80 million. The Rodoban business expanded our operations in southeastern Brazil and is integrated with our existing Brink's Brazil operations. Rodoban has approximately 2,900 employees, 13 branches and about 190 armored vehicles across its operations.

We 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. We finalized our purchase price accounting in the fourth quarter of 2019. There were no significant changes to our fair value estimates of the net assets acquired of Rodoban.

(In millions)	Fair Value at Acquisition Date
Fair value of purchase consideration
Cash paid through March 31, 2020	$	135.7
Indemnification asset	(1.9		)
Fair value of purchase consideration	$	133.8
Fair value of net assets acquired
Cash	$	1.4
Accounts receivable	8.9
Other current assets	0.5
Property and equipment, net	2.4
Intangible assets(a)	49.0
Goodwill(b)	85.1
Other noncurrent assets	5.8
Current liabilities	(11.4		)
Noncurrent liabilities	(7.9		)
Fair value of net assets acquired	$	133.8

(a) Intangible assets are composed of customer relationships ($47 million fair value and 11 year amortization period), trade name ($1 million fair value and 1 year amortization period), and non-compete agreement ($1 million fair value and 5 year amortization period).

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

Other acquisitions in 2019

On June 12, 2019, we acquired 100% of the capital stock of Balance Innovations, LLC and its wholly owned subsidiary, Balance Innovations Services, Inc. (together "BI"). BI develops and licenses software that provides real-time data to optimize operations for general retail and convenience store industries throughout the United States and Canada. This acquisition enhances our ability to deliver technology-enabled, end-to-end retail cash management services.

On June 14, 2019, we acquired 100% of the capital stock of Comercio Eletronico Facil Ltda. ("COMEF"), a Brazil-based company. COMEF offers bank correspondent services and bill payment processing and is expected to supplement our existing Brazilian payment services businesses.

On September 30, 2019, we acquired 100% of the capital stock of Transportadora de Valores del Sur Limitada and its wholly owned subsidiary, TVS Pagos, Recaudos y Procesos S.A.S. (together "TVS"). TVS provides cash in transit and money processing services in Colombia. This acquisition is expected to provide opportunities for branch consolidation and route efficiencies and position our existing Colombian business as well as TVS to more effectively service our customers.

The aggregate purchase price of these three business acquisitions (BI, COMEF and TVS) was approximately $49 million. Together, these three acquired operations have approximately 1,300 employees.

For these three business acquisitions (BI, COMEF and TVS), we 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 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.

(In millions)	Estimated Fair Value at Acquisition Date
Fair value of purchase consideration
Cash paid through March 31, 2020	$	60.2
Contingent consideration	1.6
Indemnification asset	(12.9		)
Fair value of purchase consideration	$	48.9
Fair value of net assets acquired(a)
Cash	$	6.5
Accounts receivable	4.5
Property and equipment, net	7.1
Intangible assets(a)	24.4
Goodwill(b)	33.8
Other current and noncurrent assets	1.9
Current liabilities	(15.2		)
Noncurrent liabilities	(14.1		)
Fair value of net assets acquired	$	48.9

(a) Intangible assets are composed of developed technology, customer relationships and trade names. Final allocation will be determined after 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 have been assigned to the following reporting units: BI (U.S.), COMEF (Brazil) and TVS (Global Markets - South America). We expect goodwill related to BI to be deductible for tax purposes. We do not expect goodwill related to COMEF or TVS to be deductible for tax purposes.

Actual and Pro forma disclosures

Below are the actual results included in Brink's consolidated results for the businesses we acquired in the first three months of 2020.

(In millions)	Revenue		Net income (loss) attributable to Brink's
Three months ended March 31, 2020
G4Si	$	5.4	0.4
Total	$	5.4	0.4

The pro forma consolidated results of Brink’s presented below reflect a hypothetical ownership as of January 1, 2018 for the businesses we acquired during 2019 and a hypothetical ownership as of January 1, 2019 for the businesses we acquired in the first three months of 2020.

(In millions)	Revenue		Net income (loss) attributable to Brink's
Pro forma results of Brink's for the three months ended March 31,
2020
Brink's as reported	$	872.8	1.8
G4Si(a)	16.0		0.5
Total	$	888.8	2.3
2019
Brink's as reported	$	905.0	13.7
G4Si(a)	20.9		0.7
Rodoban(a)	0.6		—
Other 2019 acquisitions(a)	12.9		0.5
Total	$	939.4	14.9

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

Acquisition costs

We have incurred $5.5 million in transaction costs related to business acquisitions in the first three months of 2020 (compared to $0.4 million in the first three months of 2019). These costs are classified in the condensed consolidated statements of operations as selling, general and administrative expenses.

Dispositions

On January 1, 2020, we sold 100% of our ownership interest in a French security services company for a net sales price of approximately

$11 million. We recognized a $4.7 million gain on the sale of this business, which is reported in interest and other nonoperating income (expense) in the condensed consolidated statements of operations. The French security services company was part of the Rest of World reportable segment and reported revenues of $3 million in 2019.