Acquisitions

3 Months Ended

Mar. 31, 2021

Newmark acquired the first lien debt of Knotel, Inc. (“Knotel”), a global flexible workspace provider, in December of 2020. Newmark subsequently acquired Knotel's second lien debt in January of 2021. On January 31, 2021, Newmark agreed to provide approximately $19.8 million of debtor-in-possession financing to Knotel and to acquire the business, as part of Knotel's Chapter 11 sales process. On March 18, 2021, Newmark received approval from the U.S. Bankruptcy Court for the District of Delaware to acquire the business of Knotel. On March 24, 2021, Newmark acquired the business of Knotel. The Knotel acquisition has been determined to be a business combination with an acquisition date of March 31, 2021, for accounting purposes. The assets and liabilities of Knotel have been recorded in Newmark’s consolidated balance sheets at fair market value.

For the three months ended March 31, 2021, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired, and liabilities assumed, for the acquisition. Newmark expects to finalize its analysis of the assets acquired and liabilities assumed within the first year of the acquisition, and therefore adjustments to assets and liabilities may occur (in thousands):


	As of the Acquisition Date
Purchase Price
First and second lien debt	$	39,293
Debtor-in-possession financing	19,788
Assumed liability	6,958
Total	$	66,039

Allocations
Cash	$	7,355
Goodwill	33,014
Other intangible assets, net	18,890
Receivables, net	3,305
Fixed Assets, net	20,237
Other assets	44,844
Right-of-use Assets	239,702
Right-of-use Liabilities	(236,634)
Accounts payable, accrued expenses and other liabilities	(64,674)
Total	$	66,039

The total consideration for the acquisition during the three months ended March 31, 2021 was $66.0 million in total fair value, comprising of the extinguishment of first and second lien debt of $39.3 million, debtor-in-possession financing of $19.8 million, and an assumed liability of $6.9 million. The excess of the consideration over the fair value of the net assets acquired was recorded as goodwill of $33.0 million, of which approximately $22.4 million is deductible by Newmark for tax purposes.

In January 2020, Newmark completed the acquisition of certain assets of Hopkins Appraisal Services, a national leader in the valuation of restaurants and retail petroleum facilities.

For the year ended December 31, 2020, the following table summarizes the components of the purchase consideration transferred, and the preliminary allocation of the assets acquired, and liabilities assumed, for the acquisition. Newmark expects to finalize its analysis of the assets acquired and liabilities assumed within the first year of the acquisition, and therefore adjustments to assets and liabilities may occur (in thousands):


	As of the Acquisition Date
Purchase Price
Cash, stock and units issued at closing	$	6,249
Contingent consideration	3,590
Total	$	9,839

Allocations
Goodwill	$	6,294
Other intangible assets, net	2,700
Receivables, net	796
Fixed Assets, net	134
Other assets	29
Accounts payable, accrued expenses and other liabilities	(114)
Total	$	9,839

The total consideration for the acquisition during the year ended December 31, 2020 was $9.8 million in total fair value, comprising cash of $5.9 million and $0.4 million of RSUs. The total consideration included contingent consideration of 104,653 RSUs (with an acquisition date fair value of $1.3 million), and $2.2 million in cash that may be issued contingent on certain targets being met through 2022. The excess of the consideration over the fair value of the net assets acquired was recorded as goodwill of $6.3 million, of which $2.4 million is deductible by Newmark for tax purposes.

This acquisition was accounted for using the purchase method of accounting. The results of operations of the acquisition have been included on the accompanying unaudited condensed consolidated financial statements subsequent to the date of acquisition, which in aggregate contributed $1.9 million to Newmark’s revenues for the three months ended March 31, 2020.