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Acquisitions Acquisitions (Notes) | 9 Months Ended
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Jun. 30, 2019
Acquisitions (Notes) [Abstract] |
Business Combination Disclosure [Text Block] | Note 17 - Acquisitions GMP Securities LLC On January 14, 2019 the Company acquired 100% of the U.S.-based broker-dealer GMP Securities LLC (“GMP”), formerly known as Miller Tabak Securities, LLC, an independent, SEC-registered broker-dealer and Financial Industry Regulatory Authority, Inc. (“FINRA”) member. GMP has an institutional fixed-income trading business which deals in high yield, convertible and emerging market debt and makes markets in certain equity securities. This transaction also involved the purchase of GMP’s U.S.-based parent. This acquisition allows the Company to expand its fixed income product offerings to clients and adds new institutional clients who can benefit from the Company’s full suite of financial services. The aggregate cash purchase price of $8.2 million for all of the outstanding shares of GMP and its U.S.-based parent was equal to the final net tangible book value determined as of the acquisition date less $2.0 million. The net fair value of the assets acquired exceeded the aggregate cash purchase price; therefore, the Company recorded a bargain purchase gain of $5.4 million during the nine months ended June 30, 2019, which is presented within ‘other gain’ in the condensed consolidated income statements. The Company believes the transaction resulted in a bargain purchase gain due to the Company’s ability to incorporate GMP’s business activities into its existing business structure, and its ability to utilize certain deferred tax assets, including net operating loss carryforwards, and other assets while operating the business that may not have been likely to be realized by the seller nor was contemplated in the purchase price. The legal name of GMP was changed to INTL FCStone Credit Trading, LLC (“IFT”) subsequent to the closing date. During the three months ended June 30, 2019, IFT was merged into the Company’s wholly owned regulated U.S. subsidiary, INTL FCStone Financial Inc. The Company’s condensed consolidated income statements include the post-acquisition results, which include operating revenues and a net loss before tax of $2.9 million and $0.6 million, respectively, for the three months ended June 30, 2019, and operating revenues and a net loss before tax of $5.4 million and $1.8 million, respectively, for the nine months ended June 30, 2019. The acquired businesses are included within the Company’s Securities reportable segment. The following represents the final allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed as of the acquisition date:
(in millions) | Fair Value
Cash and cash equivalents | $ | 1.1 |
Deposits with and receivables from broker-dealers, clearing organizations, and counterparties (1) | 7.7 |
Financial instruments owned, at fair value (2) | 7.1 |
Deferred income taxes | 2.7 |
Property and equipment | 0.7 |
Other assets | 0.7 |
Total fair value of assets acquired | 20.0 |
Accounts payable and other accrued liabilities | 1.9 |
Payable to broker-dealers, clearing organizations, and counterparties | 0.1 |
Financial instruments sold, not yet purchased, at fair value (2) | 4.4 |
Total fair value of liabilities assumed | 6.4 |
Fair value of net assets acquired | 13.6 |
Purchase price | 8.2 |
Bargain purchase gain | $ | 5.4 |
(1) Amount represents the contractual amount of deposits and receivables due from the clearing organization for trading activity as of the acquisition date. (2) Financial instruments owned and sold, not yet purchased, at fair value primarily includes equity securities and high yield, convertible and emerging market fixed income securities. Equity securities have been included within Level 1 of the fair value hierarchy and fixed income securities have been included in Level 2 of the fair value hierarchy as disclosed in Note 4. Akshay Financeware, Inc. On February 13, 2019, the Company paid $0.2 million to purchase the remaining interest of a joint venture originally acquired in connection with the acquisition of INTL Technology Services, LLC in September 2018. As a result of this transaction, the Company recorded $2.7 million of indefinite life intangibles for Society for Worldwide Interbank Financial Telecommunications (“SWIFT”) licenses held by the joint venture. CoinInvest GmbH and European Precious Metal Trading GmbH On April 1, 2019 (“the Closing Date”), the Company’s subsidiary INTL FCStone (Netherlands) B.V. acquired 100% of the outstanding shares of CoinInvest GmbH and European Precious Metal Trading GmbH. Through the websites coininvest.com and silver-to-go.com, CoinInvest GmbH and European Precious Metal Trading GmbH are leading European online providers of gold, silver, platinum, and palladium products to retail investors, institutional investors, and financial advisors. The addition of CoinInvest GmbH and European Precious Metal Trading GmbH to the Company’s global product suite expands its offering, providing clients the ability to purchase physical gold and other precious metals, in multiple forms, and in denominations of their choice, to add to their investment portfolios. On the closing date, the Company paid preliminary cash consideration for the acquisition of $22.0 million, including $11.2 million for the purchase of shareholders loans outstanding with the acquired entities. The preliminary purchase price is subject to adjustment based upon the final purchase price calculations, as defined in the purchase agreement, which are subject to any adjustments noted through the course of an audit of the year ended December 31, 2018 financial statements of the acquired entities and for operating results from December 31, 2018 through the Closing Date. The preliminary cash consideration transferred exceeds the preliminary fair value of the tangible net assets acquired on the Closing Date by $7.1 million. The Company acquired certain identifiable intangible assets, including website domain names, non-compete agreements, and internally developed software. The Company has engaged a third-party valuation specialist to assist with the valuation of these acquired intangible assets. As of June 30, 2019, the valuation of these identifiable intangible assets was not yet complete as the Company continues to acquire the information necessary to complete the valuation analysis. As of June 30, 2019, given the status of the valuation analysis, the $7.1 million of excess preliminary consideration over the preliminary fair value of tangible net assets acquired on the Closing Date was recorded as goodwill. Once the valuation analysis is complete, the Company will record reclassification entries to reclassify acquired identifiable intangible assets. The Company’s condensed consolidated income statements include the post-acquisition results, including operating revenues and a net loss before tax of ($0.3) million and $0.6 million, respectively, for the three and nine months ended June 30, 2019. Operating revenues during the three months ended June 30, 2019 include unrealized losses on derivatives held to manage the downside price risk of physical commodities inventory, which is valued at the lower of cost or net realizable value; therefore, inventory was not recorded above its cost basis. The acquired businesses are included within the Company’s Physical Commodities reportable segment. The following represents a preliminary allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed as of the acquisition date:
(in millions) | Fair Value
Cash and cash equivalents | $ | 2.0 |
Receivables from clients (1) | 1.2 |
Receivable from affiliate | 1.1 |
Physical commodities inventory | 9.8 |
Other assets | 1.3 |
Total fair value of assets acquired | 15.4 |
Accounts payable and other accrued liabilities | 0.2 |
Payables to clients | 0.2 |
Income taxes payable | 0.1 |
Total fair value of liabilities assumed | 0.5 |
Fair value of net assets acquired | 14.9 |
Purchase price | 22.0 |
Goodwill | $ | 7.1 |
(1) Amount represents the contractual amount of receivables due from clients for trading activity, all of which the Company expects to be collectible as of the Closing Date. UOB Bullion and Futures Limited On March 19, 2019, the Company’s subsidiary INTL FCStone Pte Ltd executed an asset purchase agreement to acquire the futures and options brokerage and clearing business of UOB Bullion and Futures Limited, a subsidiary of United Overseas Bank Limited. Closing is conditional upon receiving regulatory approval by the Monetary Authority of Singapore (“MAS”). This acquisition provides the Company access to an established institutional client base and also augments the Company’s global service capabilities in Singapore. The purchase price for the acquired assets is $5.0 million of which $2.5 million was due upon the execution of the asset purchase agreement and is included in ‘Other assets’ on the condensed consolidated balance sheet as of June 30, 2019. The remaining $2.5 million is due to the seller upon closing of the acquisition, which is expected to occur during the 2019 calendar year upon receiving approval from the MAS.

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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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