Business Acquisitions

12 Months Ended

Dec. 31, 2018

Huntington Steele

On April 2, 2018, the Company acquired all ownership interests of Huntington Steele, LLC (Huntington Steele), a registered investment advisor based in Seattle, Washington servicing the ultra-high-net-worth market, to enhance the Company's business development and research efforts in an additional geographic region. Under the acquisition method of accounting, the total purchase price was allocated to Huntington Steele's net tangible and intangible assets based upon their estimated fair values as of April 2, 2018. The total purchase price for Huntington Steele was $17,914, which includes $5,794 in cash consideration, net of $125 in cash acquired, and a contingent purchase price of $12,120. The contingent purchase price consists of amounts payable to the sellers upon the attainment of specified financial measures determined at various intervals over the next five years. The current portion of the contingent purchase price of $430 is included in Accrued liabilities on the accompanying Balance Sheet. The long-term portion of the contingent consideration of $11,690 is included in Other long-term liabilities on the accompanying Balance Sheet.

The purchase price allocation for the Huntington Steele acquisition is as follows:



	Estimated Fair Value			Estimated Useful Life
Cash	$	125
Goodwill	11,499
Identifiable intangible assets
Client relationships	6,180			12.0 years
Trade names	450			7.0 years
Other assets	15
Current liabilities	(230		)
Contingent consideration	(12,120		)
Net cash consideration	$	5,794

The results of operations of Huntington Steele are included in the Investments in New Businesses segment and are reflected in the Company's Consolidated Statement of Operations since the completion of the acquisition on April 2, 2018. Any goodwill generated for income tax purposes from the acquisition is fully deductible (See Note 15).

Pro forma information has not been presented because the effect of the Huntington Steele acquisition is not material to the Company's consolidated financial results.

Archway

On July 3, 2017, the Company acquired all ownership interests of Archway Technology Partners, LLC, Archway Finance & Operations, Inc. and Keystone Capital Holdings, LLC (collectively, Archway), a provider of operating technologies and services to the family office industry, from Keystone International Holdings, Inc. With this acquisition, the Company expands its position in the single and multi-family office services market by diversifying its technology and operating solutions.

Under the acquisition method of accounting, the total purchase price was allocated to Archway's net tangible and intangible assets based upon their estimated fair values as of July 3, 2017. The total purchase price for Archway was $81,635 in cash consideration with up to an additional $8,000 payable to the seller as a contingent purchase price with respect to two one-year periods ended December 31, 2017 and 2018 depending upon whether Archway achieved specified financial measures during such periods. The fair value of the contingent consideration was estimated to be $4,800 on the acquisition date. Archway did not attain the specified financial measure for the periods ended December 31, 2017 or December 31, 2018. As a result, as of December 31, 2017, the Company reversed the value allocated to the contingent consideration established at the acquisition date. Additionally, the Company recognized a liability for post-acquisition obligations to the members of Archway. The net adjustment of $3,800 was recorded as a reduction in expense and is reflected in Facilities, supplies and other costs on the accompanying Consolidated Statement of Operations in 2017. At December 31, 2018, the Company reversed the liability for the post-acquisition obligations to the members of Archway as the specified financial measure was not achieved.

The Company acquired $1,401 in cash during the acquisition, resulting in $80,234 net cash paid for Archway. According to the terms of the purchase agreement, a portion of the purchase price was placed into escrow to indemnify the Company of any pre-acquisition damages. As of December 31, 2018, the balance available in escrow was $8,000. During January 2019, the entire amount placed into escrow was released to the seller. As of January 31, 2019, the Company has no further obligation related to the acquisition of Archway.

The purchase price allocation for the Archway acquisition is as follows:



	Estimated Fair Value			Estimated Useful Life
Current assets, net of current liabilities	$	2,539
Property and equipment	776
Goodwill	52,990
Identifiable intangible assets
Acquired technology	13,510			10.0 years
Client relationships	10,760			15.0 years
Non-competition agreements	3,470			5.0 years
Trade names	2,390			7.0 years
Contingent consideration	(4,800		)
Total purchase price allocation	$	81,635

The results of operations of Archway and any adjustments related to the acquisition are included in the Investment Managers business segment and are reflected in the Company's Consolidated Statement of Operations since the completion of the acquisition on July 3, 2017. All tangible and intangible assets resulting from the Archway transaction have been allocated to the Investment Managers business segment. Any goodwill generated for income tax purposes from the acquisition is fully deductible (See Note 15).

Pro forma information has not been presented because the effect of the Archway acquisition is not material to the Company's consolidated financial results.