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Note 3 - Acquisitions | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
3. |  | Acquisitions
2019 acquisitions: The Company acquired controlling interests in four businesses, two operating in the Americas (Virginia; North Carolina), one operating in EMEA (Sweden), and one operating in Asia Pacific (India). These acquisitions were completed to expand the Company’s geographic presence. These acquisitions were accounted for by the acquisition method of accounting for business combinations and accordingly, the consolidated statements of earnings do not include any revenues or expenses related to these acquisitions prior to their closing dates. The acquisition date fair value of consideration transferred and purchase price allocation was as follows:
|  | Aggregate |
|  | Acquisitions |
Current assets, excluding cash |  | $ | 29,720 |
Non-current assets |  |  | 7,989 |
Current liabilities |  |  | (18,616 | )
Long-term liabilities |  |  | (11,913 | )
|  | $ | 7,180 |
Cash consideration, net of cash acquired of $4,765 |  | $ | (80,576 | )
Acquisition date fair value of contingent consideration |  |  | - |
Total purchase consideration |  | $ | (80,576 | )
Acquired intangible assets |  | $ | 42,226 |
Acquired goodwill |  | $ | 58,221 |
Redeemable non-controlling interest |  | $ | 27,051 |
The acquisition in India, completed in October 2019, represents $57,405 of the total aggregate cash consideration above. In addition, the Company purchased a portfolio of real estate assets in connection with the establishment of a new Investment Management fund. The assets do not constitute a business under US GAAP. As at December 31, 2019, the net value of the real estate assets held for sale totals $94,223. (See Note 4 ). 2018 acquisitions: The Company acquired controlling interests in twelve businesses, five operating in the Americas (Utah; Manitoba; Florida; Quebec; Pittsburgh, Pennsylvania), four operating in EMEA (Finland; Denmark; Spain; Germany), two operating in Asia Pacific (China; Australia) and one operating in the Investment Management segment, being a 75% voting equity interest in Harrison Street Real Estate Capital, LLC (“Harrison Street”) acquired on July 5, 2018. The Finland business was acquired on January 3, 2018, is headquartered in Helsinki and provides property management services to owners of commercial and residential real estate. Harrison Street, headquartered in Chicago, provides real estate investment management services to institutional investors. These acquisitions were completed to expand the Company’s geographic presence and, in the case of Harrison Street, to enter a new service line. The acquisition date fair value of consideration transferred and purchase price allocation was as follows:
|  |  |  |  |  |  | Harrison |  |  |  |  |  |  |  | Aggregate |
|  |  | Finland |  |  |  | Street |  |  |  | Other |  |  |  | Acquisitions |
Current assets, excluding cash |  | $ | 4,734 |  |  | $ | 16,948 |  |  | $ | 31,623 |  |  | $ | 53,305 |
Non-current assets |  |  | 2,581 |  |  |  | 4,678 |  |  |  | 3,616 |  |  |  | 10,875 |
Current liabilities |  |  | (9,421 | ) |  |  | (14,544 | ) |  |  | (27,853 | ) |  |  | (51,818 | )
Long-term liabilities |  |  | (6,072 | ) |  |  | - |  |  |  | (15,608 | ) |  |  | (21,680 | )
|  | $ | (8,178 | ) |  | $ | 7,082 |  |  | $ | (8,222 | ) |  | $ | (9,318 | )
Cash consideration, net of cash acquired of $23,777 |  | $ | (57,287 | ) |  | $ | (447,513 | ) |  | $ | (81,442 | ) |  | $ | (586,242 | )
Acquisition date fair value of contingent consideration |  |  | - |  |  |  | (40,889 | ) |  |  | (19,212 | ) |  |  | (60,101 | )
Total purchase consideration |  | $ | (57,287 | ) |  | $ | (488,402 | ) |  | $ | (100,654 | ) |  | $ | (646,343 | )
Acquired intangible assets |  | $ | 26,841 |  |  | $ | 278,600 |  |  | $ | 69,495 |  |  | $ | 374,936 |
Acquired goodwill |  | $ | 38,624 |  |  | $ | 366,350 |  |  | $ | 60,708 |  |  | $ | 465,682 |
Redeemable non-controlling interest |  | $ | - |  |  | $ | 163,630 |  |  | $ | 21,327 |  |  | $ | 184,957 |
Acquisition-related transaction costs for the year ended December 31, 2019 totaled $5,725 ( 2018 - $11,747 ) and were recorded as expense under the caption “acquisition-related items”. In all years presented, the fair values of non-controlling interests were determined using an income approach with reference to a discounted cash flow model using the same assumptions implied in determining the purchase consideration. The purchase price allocations of acquisitions resulted in the recognition of goodwill. The primary factors contributing to goodwill are assembled workforces, synergies with existing operations and future growth prospects. For acquisitions completed during the year ended December 31, 2019, goodwill in the amount of $12,816 is deductible for income tax purposes ( 2018 - $379,486 ). During the year ended December 31, 2018, the Company sold the Finland residential property management business acquired earlier in the same year. The disposed business had net assets of $17,713 mostly comprised of intangible assets and goodwill allocated from the acquisition of Finland and the sale resulted in a net gain of $98. The Company typically structures its business acquisitions to include contingent consideration. Certain vendors, at the time of acquisition, are entitled to receive a contingent consideration payment if the acquired businesses achieve specified earnings levels during the one - to five -year periods following the dates of acquisition. The ultimate amount of payment is determined based on a formula, the key inputs to which are (i) a contractually agreed maximum payment; (ii) a contractually specified earnings level and (iii) the actual earnings for the contingency period. If the acquired business does not achieve the specified earnings level, the maximum payment is reduced for any shortfall, potentially to nil. Unless it contains an element of compensation, contingent consideration is recorded at fair value each reporting period. The fair value recorded on the consolidated balance sheet as at December 31, 2019 was $84,992 (see note 22 ). Contingent consideration with a compensatory element is revalued at each reporting period and recognized on a straight-line basis over the term of the contingent consideration arrangement. The liability recorded on the balance sheet for the compensatory element of contingent consideration arrangements as at December 31, 2019 was $23,014. The estimated range of outcomes (undiscounted) for these contingent consideration arrangements is determined based on the formula price and the likelihood of achieving specified earnings levels over the contingency period, and ranges from $159,358 to a maximum of $187,480. These contingencies will expire during the period extending to March 2023. During the year ended December 31, 2019, $23,962 was paid with reference to such contingent consideration ( 2018 - $19,946 ). The consideration for the acquisitions during the year ended December 31, 2019 was financed from borrowings on the Revolving Credit Facility and cash on hand. The amounts of revenues and earnings contributed from the dates of acquisition and included in the Company’s consolidated results for the year ended December 31, 2019, and the supplemental pro forma revenues and earnings of the combined entity had the acquisition dates been January 1, 2018, are as follows:
|  | Revenues |  |  | Net earnings |
Actual from acquired entities for 2019 |  | $ | 75,288 |  |  | $ | 1,479 |
Supplemental pro forma for 2019 (unaudited) |  |  | 3,093,751 |  |  |  | 139,807 |
Supplemental pro forma for 2018 (unaudited) |  |  | 3,049,050 |  |  |  | 144,877 |
Supplemental pro forma results were adjusted for non-recurring items.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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