12.

Acquisitions

During the first quarter of 2014, CBIZ acquired substantially all of the assets of three businesses. Centric Insurance Agency (“Centric”), located in New Providence, New Jersey, is an insurance broker providing property and casualty insurance, with a specialty in education and public schools. Clearview National Partners, LLC (“Clearview”), located in Waltham, Massachusetts, is a specialized employee benefits broker focused on providing employee benefit solutions to clients with more than 100 employees. Lewis Birch & Richardo, LLC (“LBR”), located in Tampa Bay, Florida, is a professional tax, accounting and consulting service provider with significant experience and expertise in matrimonial and family law litigation support, not-for-profit entities and healthcare provider services. The operating results of Centric and Clearview are reported in the Employee Services practice group and the operating results of LBR are reported in the Financial Services practice group. Aggregate consideration for these acquisitions consisted of approximately $16.5 million in cash, $1.9 million in CBIZ common stock, and $10.2 million in contingent consideration.

The aggregate purchase price for these acquisitions was allocated as follows (in thousands):


Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	131
Accounts receivable, net		1,555
Work in process, net		900
Other assets		110
Identifiable intangible assets		5,803
Current liabilities		(485	)

Total identifiable net assets	$	8,014
Goodwill		20,610

Aggregate purchase price	$	28,624

Under the terms of the acquisition agreement, a portion of the purchase price is contingent on future performance of the business acquired. The maximum potential undiscounted amount of all future payments that CBIZ could be required to make under the contingent arrangements is $10.9 million. CBIZ is required to record the fair value of this obligation at the acquisition date. CBIZ determined, utilizing a probability weighted income approach, that the fair value of the contingent consideration arrangement was $10.2 million, which was recorded in the consolidated balance sheet at March 31, 2014. The goodwill of $20.6 million arising from the acquisition in the current year consists largely of expected future earnings and cash flow from the existing management team, as well as the synergies created by the integration of the new business within the CBIZ organization, including cross-selling opportunities expected with the Company’s Employee Services and Financial Services practice groups, to help strengthen the Company’s existing service offerings and expand market position. Goodwill recognized is deductible for income tax purposes.

In addition, CBIZ paid $1.5 million in cash during the first quarter of 2014 as contingent earnouts for previous acquisitions. During the first quarter of 2014, CBIZ also reduced the fair value of the contingent purchase price liability related to CBIZ’s prior acquisitions by $1.0 million due to lower than originally projected future results of the acquired businesses. This reduction of $1.0 million is included in “Other income, net” in the consolidated statements of comprehensive income.

During the first quarter of 2013, CBIZ did not acquire any businesses or client lists. CBIZ paid $0.9 million in cash and issued approximately 99,000 shares of common stock during the first quarter of 2013 as contingent earnouts for previous acquisitions. In addition, during the first quarter of 2013, CBIZ increased the fair value of the contingent purchase price liability related to CBIZ’s prior acquisitions by $0.9 million due to higher than originally projected future results of the acquired businesses. This increase is included in “Other income, net” in the consolidated statements of comprehensive income. See Note 8 for further discussion of contingent purchase price liabilities.

The operating results of these businesses were included in the accompanying consolidated financial statements since the dates of acquisition. Client lists and non-compete agreements were recorded at fair value at the time of acquisition. The excess of purchase price over the fair value of net assets acquired (including client lists and non-compete agreements) was allocated to goodwill.

Additions to goodwill, client lists and other intangible assets resulting from acquisitions and contingent consideration earned on prior period acquisitions during the three months ended March 31, 2014 and 2013 were as follows (in thousands):


	Three Months Ended March 31,
	2014		2013
Goodwill	$	20,610	$	217
Client lists	$	5,510	$	—
Other intangible assets	$	293	$	—