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Acquisitions | 12 Months Ended
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Dec. 31, 2012
Acquisitions | 6. Acquisitions 2012 Acquisitions During 2012, the Company completed several foreign acquisitions with an aggregate purchase price of $207.4 million, net of cash acquired, which includes deferred payments of $11.3 million and a contingent earn-out payment of 120.6 million rubles ($4.9 million). The Company made a first payment of 40.1 million rubles ($1.3 million) related to this earn-out in December 2012. Russian Fuel Card Company On June 15, 2012, the Company acquired all of the outstanding stock of a leading Russian fuel card company. The consideration for the transaction was paid using the Company’s existing cash and credit facilities. In connection with the transaction, a final payment of $11.3 million is due December 15, 2013. This deferred payment is included in current portion of notes payable and other obligations, within the consolidated balance sheet. The acquired company is a Russian leader in fuel card systems and serves major oil clients and hundreds of independent fuel card issuers. Its technology allows issuers to share their retail network, thereby expanding the reach of their networks. Results from the acquired Russian business have been reported in the Company’s International segment since the date of acquisition. The purpose of this acquisition was to further expand the Company’s presence in the Russian fuel card marketplace. This business acquisition was not material to the Company’s consolidated financial statements. Goodwill recognized is comprised primarily of expected synergies from combining the operations of the Company and the Russian fuel card company. The goodwill acquired with this business is not deductible for tax purposes. The purchase price allocation related to this acquisition is preliminary. CTF Technologies, Inc. On July 3, 2012, the Company acquired all of the outstanding stock of CTF Technologies, Inc. (“CTF”), a British Columbia organization, for $156 million. The consideration for the transaction was paid using the Company’s existing cash and credit facilities. CTF Technologies Do Brasil Ltda and certain of the Company’s other subsidiaries are wholly-owned entities of CTF. The acquisition was carried out pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) and was approved by final order of the Supreme Court of British Columbia. The purpose of the transaction was to establish the Company’s presence in the Brazilian marketplace. CTF provides fuel payment processing services for over-the-road fleets, ships, mining equipment, and railroads in Brazil. CTF’s payment platform links together fleet operators, banks, and oil companies. CTF earns revenue primarily from a recurring transaction fee paid by the oil companies who purchase services for their fleet customers under multi-year customer contracts. Goodwill recognized is comprised primarily of expected synergies from combining the operations of the Company and CTF. The goodwill acquired with this business is not deductible for tax purposes. The purchase price allocation related to this acquisition is preliminary. 2012 Totals The following table summarizes the preliminary allocation of the purchase price for all acquisitions during 2012, net of cash acquired (in thousands):
Trade and other receivables |  | $ | 13,196 |
Prepaid expenses and other |  |  | 6,185 |
Property and equipment |  |  | 6,701 |
Goodwill |  |  | 165,398 |
Other intangible assets |  |  | 109,758 |
Notes and other liabilities assumed |  |  | (42,912 | )
Deferred tax liabilities |  |  | (50,936 | )
Aggregate purchase prices |  | $ | 207,390 |
The purchase price is net of cash and cash equivalents acquired, totaling $1.9 million, and also includes deferred payments of $11.3 million and a contingent earn-out payment of $4.9 million. Intangible assets allocated in connection with the preliminary purchase price allocations consisted of the following (in thousands):
|  | Weighted Average Useful Lives (in Years) |  |  | Value |
Customer relationships |  |  | 10 – 20 |  |  | $ | 77,654 |
Trade names and trademarks—indefinite |  |  | N/A |  |  |  | 16,900 |
Merchant network |  |  | 10 |  |  |  | 4,604 |
Software |  |  | 3 – 10 |  |  |  | 9,800 |
Non-compete |  |  | 2 – 6 |  |  |  | 800 |
|  |  |  |  |  | $ | 109,758 |
At December 31, 2012, approximately $238 million of the Company’s goodwill is deductible for tax purposes. The Company incurred acquisition related costs of $2.5 million in 2012, which are included within general and administrative expenses in the Consolidated Statements of Income. These acquisitions did not materially affect revenues and earnings during 2012. 2011 Acquisitions During 2011, the Company completed several foreign acquisitions with an aggregate purchase price of $333.8 million, net of cash acquired. Allstar Business Solutions Limited On December 13, 2011, the Company acquired all of the outstanding stock of Allstar Business Solutions Limited (Allstar) in the United Kingdom. The purpose of the transaction was to expand the Company’s European commercial fleet card offerings. Results from Allstar have been reported in the Company’s International Segment since the date of acquisition. The total consideration for this acquisition was £200 million, or approximately $312 million, including amounts applied at the closing to the repayment of Allstar’s debt. The consideration for the transaction was paid using FleetCor’s existing cash and credit facilities. The following unaudited pro forma statements of income for the years ended December 31, 2011 and 2010 have been prepared to give effect to the Allstar acquisition described above assuming that it occurred on January 1 of each fiscal year presented. The pro forma statements of income are presented for illustrative purposes only and are not necessarily indicative of the results of operations that would have been obtained had this transaction actually occurred at the beginning of the periods presented, nor do they intend to be a projection of future results of operations. The pro forma statements of income have been prepared from the Company’s and Allstar’s historical audited consolidated statements of income for the years ended December 31, 2011 and 2010. The pro forma information is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information, including without limitations, purchase accounting adjustments. The pro forma financial information presented below also includes depreciation and amortization based on the valuation of Allstar’s tangible and intangible assets resulting from the acquisition. The pro forma financial information does not include any synergies or operating cost reductions that may be achieved from the combined operations.
|  | Pro forma statements of income for the year ended December 31 (unaudited) (in thousands except per share data) |
|  | 2011 |  |  | 2010 |
Income statement data: |  |  |  |  |  |  |  |
Revenues, net |  | $ | 595,864 |  |  | $ | 505,287 |
Income before income taxes |  |  | 223,251 |  |  |  | 162,153 |
Net income |  |  | 156,430 |  |  |  | 115,496 |
Earnings per share: |  |  |  |  |  |  |  |
Basic |  | $ | 1.94 |  |  | $ | 3.22 |
Diluted |  |  | 1.87 |  |  |  | 1.43 |
Weighted average shares outstanding: |  |  |  |  |  |  |  |
Basic |  |  | 80,610 |  |  |  | 35,434 |
Diluted |  |  | 83,654 |  |  |  | 80,751 |
The following table summarizes the allocation of the purchase price for Allstar (in thousands):
Trade and other receivables |  | $ | 253,628 |
Prepaid expenses and other |  |  | 139 |
Property and equipment |  |  | 601 |
Goodwill |  |  | 110,736 |
Other intangible assets |  |  | 168,200 |
Notes and other liabilities assumed |  |  | (182,460 | )
Deferred tax liabilities |  |  | (39,614 | )
Purchase price |  | $ | 311,830 |
Intangible assets allocated in connection with the purchase price allocation consisted of the following (in thousands):
|  | Weighted Average Useful Lives (in Years) |  |  | 2011 Acquisitions |
Customer relationships |  |  | 10 – 20 |  |  | $ | 141,600 |
Trade names and trademarks—indefinite |  |  | N/A |  |  |  | 18,400 |
Merchant network |  |  | 20 |  |  |  | 8,200 |
|  |  |  |  |  | $ | 168,200 |
During 2012, after the December 31, 2011 financial statements were issued, the Company completed a valuation of tangible and intangible assets and in connection with such valuation considered the report of an independent third party. With this valuation, the Company identified additional intangible assets and deferred tax liabilities acquired as of the acquisition date. Based on the Company’s valuation, the Company has estimated the fair values of the customer-related intangible assets, trade names and trademark assets and merchant network assets acquired as part of the acquisition of Allstar are $141.6 million, $18.4 million and $8.2 million, respectively. As a result, the carrying amount of the customer-related intangible assets, trade names and trademark assets and merchant network assets were increased by an aggregate $86.1 million during 2012, due to the identification of this information that existed at the acquisition date. In addition, the Company increased accrued liabilities acquired by $1.3 million and other liabilities acquired of $5.5 million, due to the identification of this information that existed at the acquisition date subsequent to the issuance of the December 31, 2011 financial statements. As a result of these adjustments, we have also recorded a corresponding adjustment to decrease goodwill by $62.8 million, an increase to deferred tax asset of $1.7 million and an increase to deferred tax liabilities of $19.9 million. The Company has recast the December 31, 2011 consolidated balance sheet to reflect these purchase accounting adjustments. Due to the acquisition of the Allstar business occurring during December 2011, the purchase accounting adjustments recorded during 2012 did not have a significant impact on the consolidated income statement or consolidated statement of cash flows, thus the Company has not recast these statements. Goodwill recognized is comprised primarily of expected synergies from combining the operations of the Company and Allstar. The goodwill acquired with this business is not deductible for tax purposes. Mexican Prepaid FuelCard and Food Voucher business In August 2011, the Company acquired all of the stock of Efectivale, a prepaid fuel card and food voucher company in Mexico. The acquired company provides fuel and food card/voucher services to businesses and governmental entities in Mexico and serves over 10,000 businesses, with over 800,000 cardholders and beneficiaries. Purchases are predominately prepaid and revenues are earned both from customers and merchants. Results from the acquired Mexico business are reported in our International segment since the date of acquisition. This business acquisition was not material to the Company’s consolidated financial statements and accordingly, the Company has not provided pro forma information relating to this acquisition. The goodwill acquired with this business is not deductible for tax purposes. 2010 Acquisitions During 2010, the Company completed several foreign acquisitions with an aggregate purchase price of $11.2 million. The following table summarizes the allocation of the purchase price for the acquisitions during 2010 (in thousands):
Trade and other receivables |  | $ | 914 |
Prepaid expenses and other |  |  | 5,378 |
Property and equipment |  |  | 70 |
Goodwill |  |  | 11,330 |
Other intangible assets |  |  | 13,502 |
Notes and other liabilities assumed |  |  | (20,361 | )
Purchase price |  | $ | 10,833 |
The purchase price is net of cash and cash equivalents acquired totaling $1.9 million. Included within goodwill is $1.5 million of deferred income tax liabilities recorded as part of the purchase price allocation. Intangible assets allocated in connection with the purchase price allocations consisted of the following (in thousands):
|  | Weighted Average Useful Lives (in Years) |  |  | 2010 Acquisitions |
Customer relationships |  |  | 9 – 20 |  |  | $ | 11,461 |
Merchant network |  |  | 5 – 15 |  |  |  | 2,041 |
|  |  |  |  |  | $ | 13,502 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1392-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1490-128463 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1383-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1486-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1500-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph 67-73 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph F4 -Subparagraph e -Appendix F Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1497-128463 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 88-16 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141 -Paragraph 51, 52 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 + Details
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