Acquisitions

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

In order to expand our asset lifecyle management (“ALM”) operations, on January 25, 2022, we acquired an approximately 80% interest in Intercept Parent, Inc. (“ITRenew”), at an agreed upon purchase price of $725,000, subject to certain working capital adjustments at, and subsequent to, the closing (the “ITRenew Transaction”). At closing, we paid $748,846 and acquired $30,720 of cash on hand, for a net purchase price of $718,126 for the ITRenew Transaction. The acquisition agreement provides us the option to purchase, and provides the shareholders of ITRenew the option to sell, the remaining approximately 20% interest in ITRenew as follows: (i) approximately 16% on or after the second anniversary of the ITRenew Transaction and (ii) approximately 4% on or after the third anniversary of the ITRenew Transaction (collectively, the “Remaining Interests”). The total payments for the Remaining Interests, based on the achievement of certain targeted performance metrics, will be no less than $200,000 and no more than $531,000 (the “Deferred Purchase Obligation”). The maximum amount of the Deferred Purchase Obligation would require achievement of the targeted performance metrics at approximately two times the level that is assumed in our current fair value estimate of the Deferred Purchase Obligation of $275,100. From January 25, 2022, we will consolidate 100% of the revenues and expenses associated with this business. The Deferred Purchase Obligation is reflected as a long-term liability in our Condensed Consolidated Balance Sheet at March 31, 2022, and, accordingly, we have not reflected any non-controlling interests associated with the ITRenew Transaction as the Remaining Interests have non-substantive equity interest rights. Subsequent increases or decreases in the fair value estimate of the Deferred Purchase Obligation will be included as a component of Other expense (income), net in our Consolidated Statements of Operations until the Deferred Purchase Obligation is settled or paid. ITRenew is presented as a component of our Corporate and Other Business segment and primarily operates in the United States.

PRELIMINARY PURCHASE PRICE ALLOCATION

A summary of the cumulative consideration paid and the preliminary allocation of the purchase price paid for all of our 2022 acquisitions through March 31, 2022 is as follows:


	THREE MONTHS ENDED MARCH 31, 2022
Cash Paid (gross of cash acquired)(1)	$	748,846

Deferred Purchase Obligation and Other(2)	276,300
Total Consideration	1,025,146
Fair Value of Identifiable Assets Acquired and Liabilities Assumed:
Cash	30,720
Accounts Receivable, Prepaid Expenses and Other Assets	71,892
Property, Plant and Equipment	7,600
Customer and Supplier Relationship Intangible Assets(3)	488,080
Other Intangible Assets(3)	47,300
Operating Lease Right-of-Use Assets	30,395




Accounts Payable, Accrued Expenses and Other Liabilities	(60,014)
Operating Lease Liabilities	(30,395)
Deferred Income Taxes	(141,560)

Total Fair Value of Identifiable Net Assets Acquired	444,018
Goodwill Initially Recorded(4)	$	581,128

(1)Cash paid for acquisitions, net of cash acquired in our Condensed Consolidated Statement of Cash Flows includes contingent and other payments received of $219 for the three months ended March 31, 2022 related to acquisitions made in the years prior to 2022.

(2)At March 31, 2022, we included approximately $275,100 in Other long-term liabilities related to the fair value estimate of the Deferred Purchase Obligation for the Remaining Interests. Deferred Purchase Obligation and Other also includes approximately $1,200 of purchase price associated with the acquisition of a records and information management business completed in 2022.

(3)The preliminary weighted average life of the intangible assets associated with the ITRenew Transaction is approximately 11 years.

(4)Goodwill is primarily attributable to the assembled workforce, expanded market opportunities and costs and other operating synergies anticipated upon the integration of the operations of us and the acquired businesses.

The preliminary purchase price allocations that are not finalized as of March 31, 2022 relate to the final assessment of the fair values of intangible assets (primarily customer and supplier relationship intangible assets) and property, plant and equipment associated with the acquisitions we closed in 2022. Any adjustments to our estimates of purchase price allocation will be made in the periods in which the adjustments are determined, but no later than the one year measurement period, and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. Adjustments recorded during the three months ended March 31, 2022 were not material to our results from operations.