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Business Combinations | 3 Months Ended
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Mar. 31, 2021
Business Combinations [Abstract] |
Business Combinations |
3. | Business Combinations
During the three months ended March 31, 2021, the Company completed several business acquisitions including the acquisition of 100% of the ownership interests in KVS Title, LLC, a title insurance and escrow settlement services company, and two smaller real estate brokerages. The purpose of these acquisitions was to expand the Company’s title and escrow offerings and existing brokerage business in key domestic markets. The Company has accounted for these transactions as business combinations . Total Consideration The total consideration for acquisitions completed during the three months ended March 31, 2021 comprised $72.2 million of cash, net of cash acquired, and up to $2.0 million of additional cash that may be paid contingent on certain earnings-based targets being met through 2023. During the three months ended March 31, 2021, $59.2 million in cash was paid in connection with these acquisitions, net of cash acquired, and an aggregate of $13.0 million will be paid subsequent to March 31, 2021. Future cash payments were recorded as Accrued expenses and other current liabilities in the condensed consolidated balance sheet. The fair value of the assets acquired and the liabilities assumed primarily resulted in the recognition of: broker relationships of $31.4 million; trademark intangible assets of $6.5 million; operating lease right-of-use assets of $5.8 million; $5.4 million of other current and non-current assets; lease liabilities of $5.8 million; and $3.8 million of other current and non-current liabilities. The excess of the purchase price over the fair value of the acquired net assets was recorded as goodwill of $34.7 million. A significant amount of this goodwill will be deductible for tax purposes in the future, but will not have an impact on the income tax provision while the Company maintains a full valuation allowance on its U.S. deferred tax assets. Acquired intangible assets are being amortized over their estimated useful lives of approximately 4 to 5 years. The Company has recorded the preliminary purchase price allocation as of the acquisition dates and expects to finalize its analysis within the measurement period (up to one year from the acquisition date) of the respective transaction. Any adjustments during the measurement period would have a corresponding offset to goodwill. Upon conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the consolidated statements of operations. Pro forma revenue and earnings for 2021 acquisitions have not been presented because they are not material to the Company’s consolidated revenue and results of operations, either individually or in the aggregate. Contingent Consideration Contingent consideration represents obligations of the Company to transfer cash and common stock to the sellers of certain acquired entities in the event that certain targets and milestones are met. Changes in contingent consideration measured at fair value on a recurring basis were as follows (in millions):
|  | Three Months Ended March 31, |
|  | 2021 |  |  | 2020 |
Opening balance |  | $ | 39.8 |  |  | $ | 16.4 |
Acquisitions |  |  | 2.0 |  |  |  | — |
Payments and issuances |  |  | (10.6 | ) |  |  | — |
Fair value (gains) losses included in net loss |  |  | (3.2 | ) |  |  | 0.7 |
Closing Balance |  | $ | 28.0 |  |  | $ | 17.1 |
Other Acquisition Related Compensation In connection with the Company’s acquisitions, certain amounts paid or to be paid to selling shareholders are subject to clawback and forfeiture dependent on certain employees and agents providing continued service to the Company. These retention-based payments are accounted for as compensation for future services and the Company recognizes the expenses over the service period. As of March 31, 2021, the Company expects to pay an additional $29.3 million in future compensation to such selling shareholders in connection with its acquisitions. For the three months ended March 31, 2021 and 2020, the Company recognized $4.2 million and $1.3 million, respectively, in compensation expense within Operations and support in the accompanying condensed consolidated statements of operations related to these arrangements.

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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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- References No definition available. + Details
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