12. Acquisitions

During the nine months ended September 30, 2014, CBIZ acquired substantially all of the assets of five businesses. Centric Insurance Agency (“Centric”), located in New Providence, New Jersey, is an insurance broker providing property and casualty insurance, with a specialty in education and public schools. Clearview National Partners, LLC (“Clearview”), located in Waltham, Massachusetts, is a specialized employee benefits broker focused on providing employee benefit solutions to clients with more than 100 employees. Lewis Birch & Richardo, LLC (“LBR”), located in Tampa Bay, Florida, is a professional tax, accounting and consulting service provider with significant experience and expertise in matrimonial and family law litigation support, not-for-profit entities and healthcare provider services. Tegrit Group (“Tegrit”), based in Akron, Ohio, is a national provider of actuarial consulting and retirement plan administration. Rognstad’s Inc. d.b.a. Sattler Insurance Agency (“Sattler”), based in Lewiston, Idaho, provides property and casualty, personal, and life insurance services, with a specialty in outdoor recreation insurance, to businesses across the United States The operating results of Centric, Clearview, Tegrit and Sattler are reported in the Employee Services practice group and the operating results of LBR are reported in the Financial Services practice group. Aggregate consideration for these acquisitions consisted of approximately $27.6 million in cash, $2.8 million in CBIZ common stock, and $14.0 million in contingent consideration.

The aggregate purchase price for these acquisitions was allocated as follows (in thousands):


Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	382
Accounts receivable		3,408
Work in process		900
Other assets		406
Identifiable intangible assets		11,109
Current liabilities		(3,690	)

Total identifiable net assets	$	12,515
Goodwill		31,925

Aggregate purchase price	$	44,440

Under the terms of each of the acquisition agreements, a portion of the purchase price is contingent on future performance of the business acquired. The maximum potential undiscounted amount of all future payments that CBIZ could be required to make under the contingent arrangements is $15.4 million. CBIZ is required to record the fair value of this obligation at the applicable acquisition date. CBIZ determined, utilizing a probability weighted income approach, that the fair value of the contingent consideration arrangements was $14.0 million, which was recorded in the consolidated balance sheet at September 30, 2014. The goodwill of $31.9 million arising from the acquisitions in the current year consists largely of expected future earnings and cash flow from the existing management teams, as well as the synergies created by the integration of the new businesses within the CBIZ organization, including cross-selling opportunities expected with the Company’s Employee Services and Financial Services practice groups, to help strengthen the Company’s existing service offerings and expand market position. A significant portion of the goodwill is deductible for income tax purposes.

In addition, CBIZ paid $2.3 million in cash and issued approximately 0.1 million shares of CBIZ common stock during the nine months ended September 30, 2014 as contingent earnouts for previous acquisitions. During the nine months ended September 30, 2014, CBIZ also reduced the fair value of the contingent purchase price liability related to CBIZ’s prior acquisitions by $3.6 million due to lower than originally projected future results of the acquired businesses. These reductions are included in “Other (expense) income, net” in the consolidated statements of comprehensive income.

During the nine months ended September 30, 2013, CBIZ acquired Associated Insurance Agents (“AIA”) AIA, located in Minneapolis, Minnesota, an insurance brokerage agency specializing in property and casualty insurance, personal lines and health and benefit insurance. The operating results of AIA are reported in the Employee Services practice group. Aggregate consideration for this acquisition consisted of approximately $3.7 million in cash, $0.4 million in guaranteed future consideration, and $4.6 million in contingent consideration. CBIZ also purchased one client list, which is reported in the Employee Services practice group. Total consideration for this client list was $0.3 million cash paid at closing and an additional $0.2 million in cash, which is contingent upon future financial performance of the client list.

In addition, CBIZ paid $4.1 million in cash and issued approximately 0.2 million of CBIZ common stock during the nine months ended September 30, 2013 as contingent earnouts for previous acquisitions. During the nine months ended September 30, 2013, CBIZ also increased the fair value of the contingent purchase price liability related to CBIZ’s prior acquisitions by $1.1 million due to greater than originally projected future results of the acquired businesses. This increase is included in “Other income, net” in the Consolidated Statements of Comprehensive Income. Refer to Note 8 for further discussion of contingent purchase price liabilities.

The operating results of acquired businesses are included in the accompanying consolidated financial statements since the dates of acquisition. Client lists and non-compete agreements are recorded at fair value at the time of acquisition. The excess of purchase price over the fair value of net assets acquired (including client lists and non-compete agreements) is allocated to goodwill.

Additions to goodwill, client lists and other intangible assets resulting from acquisitions and contingent consideration earned on prior period acquisitions during the nine months ended September 30, 2014 and 2013, respectively, were as follows (in thousands):


	2014		2013
Goodwill	$	32,094	$	7,378

Client lists	$	11,606	$	3,499

Other intangible assets	$	559	$	166