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Note 4 - Acquisitions | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Business Combination Disclosure [Text Block] |
4. | Acquisitions
2020 acquisitions: On May 29, 2020, the Company acquired controlling interests in four subsidiaries of Dougherty Financial Group LLC – Dougherty Mortgage LLC, Dougherty & Company LLC, Dougherty Funding LLC and Dougherty Insurance Agency LLC. Headquartered in Minneapolis, Dougherty operates across 21 states in the U.S. Dougherty's mortgage banking operations have been renamed as “Colliers Mortgage” while all brokerage, investment banking, capital markets and public finance services were renamed “Colliers Securities” which operates as a broker-dealer and is licensed under the Securities and Exchange Commission and is a member of the Financial Industry Regulatory Authority. Colliers Mortgage is licensed as a U.S. Department of Housing and Urban Development (“HUD”) title II non-supervised mortgagee, a Government National Mortgage Association (“Ginnie Mae”) issuer, and a Federal National Mortgage Association (“Fannie Mae”) approved Delegated Underwriting and Servicing Program (“DUS”) lender for multifamily affordable and market rate housing and senior housing mortgage loans. Colliers Mortgage is also an approved lender in the United States Department of Agriculture (“USDA”) Community Facilities Guaranteed Loan Program. Ginnie Mae and Fannie Mae together are referred to as government sponsored enterprises (“GSEs”). On July 13, 2020, the Company acquired a controlling interest in Maser Consulting P.A. (“Maser”), headquartered in New Jersey. Maser operates in the Americas segment across 13 U.S. states. Maser is a leading multi-disciplinary engineering design and consulting firm in the U.S. During the year ended December 31, 2020 the Company acquired controlling interests in two Colliers International affiliates operating in the Americas segment (Austin, Texas and Nashville, Tennessee). The acquisition date fair value of consideration transferred and purchase price allocation was as follows:
|  |  | Colliers |  |  |  |  |  |  |  |  |  |  |  | Aggregate |
|  |  | Mortgage |  |  |  | Maser |  |  |  | Other |  |  |  | Acquisitions |
Current assets, excluding cash |  | $ | 46,510 |  |  | $ | 57,533 |  |  | $ | 2,800 |  |  | $ | 106,843 |
Warehouse receivables |  |  | 31,282 |  |  |  | - |  |  |  | - |  |  |  | 31,282 |
Non-current assets |  |  | 9,021 |  |  |  | 37,516 |  |  |  | 3,449 |  |  |  | 49,986 |
Current liabilities |  |  | (55,881 | ) |  |  | (32,582 | ) |  |  | (3,156 | ) |  |  | (91,619 | )
Warehouse credit facilities |  |  | (25,850 | ) |  |  | - |  |  |  | - |  |  |  | (25,850 | )
Long-term liabilities |  |  | (6,266 | ) |  |  | (54,739 | ) |  |  | (2,951 | ) |  |  | (63,956 | )
|  | $ | (1,184 | ) |  | $ | 7,728 |  |  | $ | 142 |  |  | $ | 6,686 |
Cash consideration, net of cash acquired of $50,331 |  | $ | (134,204 | ) |  | $ | (59,355 | ) |  | $ | (12,049 | ) |  | $ | (205,608 | )
Acquisition date fair value of contingent consideration |  |  | (9,250 | ) |  |  | (12,204 | ) |  |  | (2,263 | ) |  |  | (23,717 | )
Total purchase consideration |  | $ | (143,454 | ) |  | $ | (71,559 | ) |  | $ | (14,312 | ) |  | $ | (229,325 | )
Acquired intangible assets(note 11) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Indefinite life |  | $ | 29,200 |  |  | $ | - |  |  | $ | - |  |  | $ | 29,200 |
Finite life |  | $ | 105,150 |  |  | $ | 51,100 |  |  | $ | 11,430 |  |  | $ | 167,680 |
Goodwill |  | $ | 53,530 |  |  | $ | 56,838 |  |  | $ | 7,616 |  |  | $ | 117,984 |
Redeemable non-controlling interest |  | $ | 43,242 |  |  | $ | 44,107 |  |  | $ | 4,876 |  |  | $ | 92,225 |
Indefinite life intangible assets consist mainly of the mortgage licenses acquired, and the fair value of these licenses are determined using revenue growth rates, attrition rates and applicable discount rates. The MSR intangible asset acquired with Colliers Mortgage had a fair value of $99,900 at the acquisition date and had a weighted average useful life of 8.15 years. The key assumptions used in measuring the fair value of the MSR intangible assets at acquisition date included a discount rate of 11.20% and a conditional prepayment rate of 6.30%. 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). 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 |
Goodwill |  | $ | 58,221 |
Redeemable non-controlling interest |  | $ | 27,051 |
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, 2020, goodwill in the amount of $61,146 is deductible for income tax purposes ( 2019 - $12,816 ). 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, 2020 was $115,643 ( December 31, 2019 - $84,992 ). See note 25 for discussion on the fair value of contingent consideration. 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, 2020 was $17,646 ( December 31, 2019 - $23,014 ). The estimated range of outcomes (undiscounted) for all contingent consideration arrangements, including those with an element of compensation is determined based on the formula price and the likelihood of achieving specified earnings levels over the contingency period, and ranges from $184,660 to a maximum of $208,610. These contingencies will expire during the period extending to December 2024. The consideration for the acquisitions during the year ended December 31, 2020 was financed from borrowings on the Revolving Credit Facility and cash on hand. During the year ended December 31, 2020, $29,405 was paid with reference to contingent consideration ( 2019 - $23,962 ). 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, 2020, and the supplemental pro forma revenues and earnings of the combined entity had the acquisition dates been January 1, 2019, are as follows:
|  |  | Revenues |  |  |  | Net earnings |
Actual from acquired entities for 2020 |  | $ | 194,977 |  |  | $ | 24,449 |
Supplemental pro forma for 2020 (unaudited) |  |  | 2,927,994 |  |  |  | 104,662 |
Supplemental pro forma for 2019 (unaudited) |  |  | 3,378,981 |  |  |  | 163,942 |
Supplemental pro forma results were adjusted for non-recurring items.

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