NOTE 13 - Acquisitions

During the six months ended January 31, 2013, the Company acquired salvage vehicle auction businesses in Brazil and the U.A.E. and an auction platform in Germany for a total purchase price of $34.9 million.

During the six months ended January 31, 2014, the Company acquired salvage vehicle auction businesses in Brazil and Quebec, Canada, as well as the assets of an online marketing company, which included the rights to hundreds of web domains including www.cashforcars.com and www.cash4cars.com. The aggregate purchase price totaled $14.8 million.

	Three Months Ended January 31,					Six Months Ended January 31,
		2014		2013		2014		2013
Total cash paid, net of cash acquired	$	13,935	$	31,243	$	13,650	$	31,243
Contingent consideration		533		3,690		533		3,690
Total acquisition price	$	14,468	$	34,933	$	14,183	$	34,933

These acquisitions were undertaken because of their strategic fit and have been accounted for using the purchase method in accordance with ASC 805, Business Combinations, which has resulted in the recognition of goodwill in the Company's consolidated financial statements. This goodwill arises because the purchase price reflects a number of factors including their future earnings and cash flow potential; the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the process by which the Company acquired the businesses; and because of the complementary strategic fit and resulting synergies brought to existing operations. The goodwill arising from these acquisitions is within Level III of the fair value hierarchy as it is valued using unobservable inputs primarily from valuation specialists. Goodwill is not amortized for financial reporting purposes, and most of the balance is not amortized for tax purposes. Intangible assets acquired include covenants not to compete, supply contracts, customer relationships, trade names, licenses and databases and software with a useful life ranging from 3 to 8 years.

The purchase price allocation for Salvage Parent, Inc., the acquired auction platform in Spain, salvage vehicle auction businesses in Quebec, Canada, Brazil, the acquired online marketing company, are not final for property and equipment, income taxes, liabilities and intangible assets acquired pending the final valuation by the Company's valuation specialists. During the six months ended January 31, 2014, the Company obtained new information related to the Company's liabilities and income taxes related to its acquisitions. The Company noted there was a pre-acquisition contingency related to a lack of documentation on the historical sales of Salvage Parent, Inc. that could expose the Company to additional liabilities. The Company notes the contingency could range from $7.0 million to $28.0 million. The Company has recorded its current estimate of the fair value of the potential exposure at $14.0 million within accrued liabilities on the condensed consolidated balance sheet. The Company notes this is its best estimate based on the currently available information and continues to gather information relating to this exposure and it could materially change. Any changes to this pre-acquisition contingency recorded during the measurement period related to new information will be included in the final valuation and related amounts recognized. Subsequent to the end of the measurement period, any adjustments to this pre-acquisition contingency will be reflected in the Company's results of operations. During the six months ended January 31, 2014, goodwill was adjusted by the change in liability exposure, working capital adjustments, deferred taxes on acquired intangible assets as well as additional acquisitions. The Company believes the potential changes to its preliminary purchase price allocation will not have a material impact on the Company's consolidated financial position and results of operations.

The acquisitions do not result in a significant change in the Company's consolidated results of operations individually nor in the aggregate; therefore pro forma financial information has not been presented. The operating results have been included in the Company's consolidated financial position and results of operations since the acquisition dates.