12.

Acquisitions

The cost of an acquisition is measured at the fair value of the consideration transferred, including contingent consideration. Acquisition-related costs are recognized as an expense in the period in which they are incurred. The identifiable assets acquired, liabilities assumed and contingent consideration are measured at their fair values at the date of acquisition. Goodwill is measured as the excess of the aggregate of the consideration transferred over the net of the amounts of identifiable assets acquired and liabilities assumed. A significant portion of the goodwill is deductible for income tax purposes. The operating results of acquired businesses are included in the accompanying consolidated financial statements beginning on the date of acquisition.

First quarter 2016

During the quarter ended March 31, 2016, CBIZ acquired substantially all of the non-attest assets of one business (described below) and two client lists which are reported in the Employee Services practice group. Total consideration was approximately $1.9 million in contingent consideration, $1.3 million in net cash consideration and $1.0 million in guaranteed future consideration.

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Effective January 1, 2016, CBIZ acquired Millimaki Eggert, L.L.P., (“Millimaki”), located in San Diego, California. Millimaki provides professional tax, accounting, and financial services, with a specialty niche practice in the real estate sector, to closely held businesses, their owners, and mid-to-high net worth individuals. Annualized revenue attributable to Millimaki is estimated to be approximately $2.4 million. Operating results attributable to Millimaki are reported in the Financial Services practice group.

First quarter 2015

During the quarter ended March 31, 2015, CBIZ acquired substantially all of the assets of one business (described below) and two client lists which are reported in the Employee Services practice group. Total consideration was approximately $5.6 million in net cash consideration and $4.5 million in contingent consideration.

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Effective March 1, 2015, CBIZ acquired Model Consulting, Inc. (“Model”), located in Trevose, Pennsylvania. Model provides employee benefit consulting services to mid-sized companies in the Philadelphia and Southern New Jersey markets. Operating results attributable to Model are reported in the Employee Services practice group.

Pro forma results of operations for these acquisitions have not been presented because the effects of the acquisitions, individually or in the aggregate, were not significant to the Company’s results.

Aggregate purchase price

The estimated fair values of the assets acquired and the liabilities assumed during the three months ended March 31, 2016 and 2015, respectively, are as follows (in thousands):


	Three Months Ended March 31,
	2016			2015
Accounts receivable, net	$	325		$	—
Other assets		38			—
Identifiable intangible assets		1,005			2,844
Accrued liabilities		(49	)		—

Total identifiable net assets	$	1,319		$	2,844
Goodwill		988			6,865

Aggregate purchase price	$	2,307		$	9,709

The goodwill arising from the acquisitions consists largely of expected future earnings and cash flows from the existing management team, as well as the synergies created by the integration of the new businesses within the CBIZ organization, including cross-selling opportunities expected with the Company’s Financial Services group and the Employee Services group, to help strengthen the Company’s existing service offerings and expand the Company’s market position. All of the goodwill recognized is deductible for income tax purposes.

The goodwill of $1.0 million from the acquisition in the first quarter of 2016 is reported under the Financial Services practice group. The goodwill of $6.9 million from the acquisition that closed in the first quarter of 2015 is reported under the Employee Services practice group.

Contingent purchase price liability

Under the terms of the Millimaki acquisition agreement, a portion of the purchase price is contingent on future performance of the businesses acquired. Utilizing a probability weighted income approach, CBIZ determined that the fair value of the contingent consideration arrangement was $1.2 million, of which $0.5 million was recorded in “Contingent purchase price liability – current” and $0.7 million was recorded in “Contingent purchase price liability – non-current” in the accompanying Consolidated Balance Sheets at March 31, 2016.

Change in contingent purchase price liability for previous acquisitions

During the first quarter of 2016 and 2015, CBIZ decreased the fair value of the contingent purchase price liability related to prior acquisitions by $1.3 million and $1.5 million, respectively, due to lower than originally projected future results of the acquired businesses. These reductions are included in “Other income, net” in the accompanying Consolidated Statements of Comprehensive Income.

Contingent earnouts for previous acquisitions

CBIZ paid $2.0 million in cash and issued approximately 32,000 shares of CBIZ common stock valued at approximately $0.3 million during the quarter ended March 31, 2016 for previous acquisitions. During the same period in 2015, CBIZ paid $3.3 million in cash and issued approximately 59,000 shares of CBIZ common stock valued at approximately $0.5 million.