XML 70 R50.htm IDEA: XBRL DOCUMENT v3.20.4
Acquisitions (Tables)
 12 Months Ended
Sep. 30, 2020
Business Combinations [Abstract]  
Schedule of Aggregate Merger Consideration
The aggregate merger consideration was (in millions):
Aggregate cash consideration $215.0 
Accrual for merger cash consideration 21.6 
Total merger consideration $236.6 
Schedule of Preliminary Purchase Price Allocation as of the Acquisition
The following table summarizes the preliminary purchase price allocation as of the Gain acquisition date (in millions):
Preliminary Purchase Price Allocation
Cash and cash equivalents$507.2 
Cash, securities and other assets segregated under federal and other regulations 497.4
Deposits with and receivables from broker-dealers, clearing organizations, and counterparties (1)
249.7
Receivables from clients, net (2)
2.0
Income taxes receivable 0.4
Deferred income taxes, net 23.0
Property and equipment, net 6.1
Right of use assets, net15.0
Other assets17.9
Total fair value of tangible assets acquired1,318.7
Accounts payable and other accrued liabilities52.7
Operating lease liabilities 15.0
Payable to clients863.4
Payable to broker-dealers, clearing organizations, and counterparties0.5
Income taxes payable 12.4
Convertible senior notes (3)
92.0
Total fair value of tangible liabilities assumed1,036.0
Fair value of tangible net assets acquired (4)
282.7
Identifiable intangible assets acquired
Trademarks/domain names(5)
3.7
Software programs/platforms(5)
22.2
Customer base(5)
9.8
Total fair value of intangible assets acquired35.7
Fair value of identifiable net assets acquired 318.4
Total merger consideration 236.6
Bargain purchase gain $81.8 
(1) Amount represents the contractual amount of deposits with and receivables from broker-dealers, clearing organizations, and counterparties, all of which the Company expects to be collectible as of the Gain acquisition date.
(2) Amount represents the contractual amount of receivables due from clients for trading activity, all of which the Company expects to be collectible as of the Gain acquisition date.
(3) As $91.5 million of the $92.0 million in aggregate principal of the Gain Notes were redeemed on September 1, 2020, the Company believes that the face value of the Gain Notes approximated their fair value as of the Gain acquisition date due to the fundamental change right provided for in the Gain Notes indenture. Refer to Note 12 for further discussion of the Gain Notes redemption.
(4) With the exception of deferred income taxes and the convertible senior notes, the Company believes that the fair value of the tangible assets acquired and tangible liabilities assumed approximate their carrying values as of the Gain acquisition date due either to their short-term nature, the Company’s ability to initiate the withdrawal and settlement of client related trading balances, or the fact that the balances are recorded at fair value on a recurring basis.
(5) The trademark/domain names, software programs/platforms, and customer base intangible assets have been assigned useful lives of 5 years, 3 years, and 4 years, respectively.
The following represents the final allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed as of the acquisition date (in millions):
Fair Value
Cash and cash equivalents$1.1 
Deposits with and receivables from broker-dealers, clearing organizations, and counterparties (1)
7.7 
Financial instruments owned, at fair value (2)
7.1 
Deferred income taxes2.7 
Property and equipment0.7 
Other assets0.7 
Total fair value of assets acquired20.0 
Accounts payable and other accrued liabilities1.9 
Payable to broker-dealers, clearing organizations, and counterparties0.1 
Financial instruments sold, not yet purchased, at fair value (2)
4.4 
Total fair value of liabilities assumed6.4 
Fair value of net assets acquired13.6 
Purchase price8.2 
Bargain purchase gain$5.4 
(1) Amount represents the contractual amount of deposits and receivables due from the clearing organization for trading activity as of the acquisition date.
(2) Financial instruments owned and sold, not yet purchased, at fair value primarily includes equity securities and high yield, convertible and emerging market fixed income securities. Equity securities have been included within Level 1 of the fair value hierarchy and fixed income securities have been included in Level 2 of the fair value hierarchy as disclosed in Note 4.
The following represents the final allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed as of the acquisition date (in millions):
Fair Value
Cash and cash equivalents$2.0 
Receivables from clients (1)
1.2 
Receivable from affiliate 1.1 
Income tax receivable0.1 
Physical commodities inventory 9.8 
Deferred tax assets, net0.2 
Other assets1.2 
Total fair value of tangible assets acquired15.6 
Accounts payable and other accrued liabilities0.2 
Payables to clients0.2 
Total fair value of tangible liabilities assumed0.4 
Fair value of net tangible assets acquired15.2 
Purchase price22.0 
Excess purchase price over fair value of tangible net assets acquired$6.8 
Excess purchase price over fair value of tangible net assets acquired allocated to identifiable intangible assets:
Domain names $2.1 
Internally developed software2.5 
Total excess purchase price allocated to identifiable intangible assets4.6 
Remaining excess allocated to goodwill$2.2 
(1) Amount represents the contractual amount of receivables due from clients for trading activity, all of which was collected.
The following represents the final allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed as of the acquisition date (in millions):
Fair Value
Cash and cash equivalents$0.2 
Deposits with and receivables from broker-dealers, clearing organizations, and counterparties0.3 
Receivables from clients, net (1)
0.2 
Other assets0.4 
Total fair value of tangible assets acquired1.1 
Accounts payable and other accrued liabilities0.5 
Total fair value of tangible liabilities assumed0.5 
Fair value of net tangible assets acquired0.6 
Purchase price (2)
3.2 
Excess purchase price over fair value of tangible net assets acquired$2.6 
Excess purchase price over fair value of tangible net assets acquired allocated to identifiable intangible assets:
Client relationships$0.7 
Total excess purchase price allocated to identifiable intangible assets0.7 
Remaining excess allocated to goodwill$1.9 
(1) Amount represents the contractual amount of receivables due from clients for trading activity, all of which was collected.
(2) Includes the fair value of contingent consideration of $1.8 million.
Schedule of Business Acquisition Pro Forma Financial Information
The following unaudited pro forma financial information (in millions, except per share amounts) has been adjusted to give effect to the Gain merger as if it were consummated on October 1, 2018.
Year Ended September 30, 2020Year Ended September 30, 2019
Total revenues$54,414.1 $33,160.0 
Net income $138.5 $38.3 
Basic earnings per share $7.17 $2.01 
Diluted earnings per share$7.02 $1.97