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Business Combinations | 9 Months Ended
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Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
Business Combinations | BUSINESS COMBINATIONS Business Combinations During the nine months ended September 30, 2022, we completed the following acquisitions: •Effective January 1, 2022, we acquired all of the non-attest assets of Marks Paneth LLP ("Marks Paneth"). Marks Paneth, based in New York City, is a provider of a full range of accounting, tax and consulting services to a wide range of industries. Marks Paneth is included as a component of our Financial Services practice group. Operating results are reported in the Financial Services practice group. •Effective July 1, 2022, we acquired substantially all the assets of Stinnett & Associates, LLC ("Stinnett"). Stinnett, located in Tulsa, Oklahoma, is a professional advisory firm and certified Women's Business Enterprise providing internal audit, Sarbanes-Oxley compliance, cybersecurity reviews, business continuity and disaster recovery, and fraud investigations to businesses of all sizes including Fortune 1000 organizations in a variety of industries. Operating results are reported in the Financial Services practice group. During the nine months ended September 30, 2021, we completed the following acquisitions: •Effective January 1, 2021, we acquired substantially all the assets of Middle Market Advisory Group (“MMA”). MMA, based in Englewood, Colorado, is a provider of tax compliance and consulting services to middle market companies and family groups in the real estate, automotive, technology and SAAS, construction, and manufacturing industries. Operating results are reported in the Financial Services practice group. •Effective April 1, 2021, we acquired substantially all the assets of Wright Retirement Services, LLC ("Wright"). Wright, located in Valdosta, Georgia, specializes in third party administration services for retirement plan sponsors. Operating results are reported in the Benefits and Insurance practice group. •Effective May 1, 2021, we acquired substantially all of the non-attest assets of Berntson Porter & Company, PLLC ("BP"). BP, based in Bellevue, Washington is a provider of comprehensive accounting and financial consulting services including tax, forensic, economic and valuation services and transaction services to a wide range of industries with specialties including construction, real estate, hospitality, manufacturing and technology. Operating results are reported in the Financial Services practice group. •Effective June 1, 2021, we acquired all of the issued and outstanding membership interests of Schramm Health Partners, LLC dba Optumas ("Optumas"). Optumas, based in Scottsdale, Arizona, is a provider of actuarial services to state government health care agencies to assist in the administration of Medicaid programs. Operating results are reported in the Financial Services practice group. •Effective September 1, 2021, we acquired all of the non-attest assets of Shea Labagh Dobberstein ("SLD"). SLD, based in San Francisco, California, is a provider of professional accounting, tax and advisory services to privately held businesses, individuals and nonprofit organizations. Operating results are reported in the Financial Services practice group. The acquisitions of Marks Paneth and Stinnett are expected to add approximately $154.5 million annualized revenue in 2022. For the nine months ended September 30, 2022, we recorded approximately $9.3 million in non-recurring transaction, retention and integration related costs associated with the Marks Paneth acquisition. Pro forma results of operations for these acquisitions have not been presented because the effects of these acquisitions were not material, either individually or in aggregate, to our total revenue, income from continuing operations, and net income for the three and nine months ended September 30, 2022 and 2021, respectively. The following table summarizes the consideration and purchase price allocation for the acquisitions completed during the nine months ended September 30, 2022 and 2021, respectively (in thousands):
| 2022 |  | 2021 |
Common stock issued (number) | 42 |  | 207 |
Common stock value | $ | 1,668 |  |  | $ | 6,940 |  |
Cash paid | 79,141 |  |  | 66,051 |  |
Recorded contingent consideration | 74,199 |  |  | 38,148 |  |
Total recorded purchase price | $ | 155,008 |  |  | $ | 111,139 |  |
Accounts receivable acquired | 20,429 |  |  | 13,125 |  |
Fixed assets acquired | 1,933 |  |  | 1,473 |  |
Identifiable intangible assets acquired | 53,400 |  |  | 40,753 |  |
Operating lease right-of-use asset acquired | 49,291 |  |  | 17,814 |  |
Other assets acquired | 1,693 |  |  | 1,316 |  |
Operating lease liability acquired - current | (5,860) |  |  | (2,785) |  |
Other current liabilities acquired | (1,594) |  |  | (5,735) |  |
Operating lease liability acquired - non-current | (43,431) |  |  | (15,029) |  |
Goodwill | 79,147 |  |  | 60,207 |  |
Total net assets acquired | $ | 155,008 |  |  | $ | 111,139 |  |
Maximum potential contingent consideration | $ | 77,075 |  |  | $ | 40,126 |  |
The following table summarizes the goodwill and intangible asset amounts resulting from those acquisitions for the nine months ended September 30, 2022 and 2021, respectively (in thousands):
| Nine Months Ended September 30,
| 2022 |  | 2021
| Financial Services |  | Benefits and Insurance Services |  | Financial Services |  | Benefits and Insurance Services
Goodwill | $ | 79,147 |  |  | $ | — |  |  | $ | 58,409 |  |  | $ | 1,798 |
Client list | 53,400 |  |  | — |  |  | 38,580 |  |  | 1,290 |
Other intangibles | — |  |  | — |  |  | 837 |  |  | 46 |
Total | $ | 132,547 |  |  | $ | — |  |  | $ | 97,826 |  |  | $ | 3,134 |
Goodwill is calculated as the difference between the aggregated purchase price and the fair value of the net assets acquired. Goodwill represents the value of expected future earnings and cash flows, as well as the synergies created by the integration of the new businesses within our organization, including cross-selling opportunities expected with our Financial Services practice group and the Benefits and Insurance Services practice group, to help strengthen our existing service offerings and expand our market position. Goodwill related to these acquisitions is deductible for tax purposes. Client lists from the aforementioned acquisitions have an expected life up to 10 years, and other intangibles, primarily non-compete agreements, have an expected life of 3 years. Client lists and non-compete agreements are valued using a discounted cash flow technique based on management estimates of future cash flows from such assets. The following table summarizes the changes in contingent purchase price consideration for previous acquisitions and contingent payments made for previous business acquisitions in the three and nine months ended September 30, 2022 and 2021, respectively (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Net expense | $ | 440 |  |  | $ | 846 |  |  | $ | 1,917 |  |  | $ | 1,599 |
Cash settlement paid | $ | 4,167 |  |  | $ | — |  |  | $ | 12,289 |  |  | $ | 7,584 |
Shares issued (number) | 26 |  | 13 |  | 45 |  | 66
Divestitures Divested operations and assets that do not qualify for treatment as discontinued operations are recorded as “Gain on sale of operations, net” in the accompanying Condensed Consolidated Statements of Comprehensive Income. During the nine months ended September 30, 2021, we sold one business unit for $9.7 million in the Benefit and Insurance practice group and recorded a gain of $6.4 million. In addition, during the three and nine months ended September 30, 2022, we sold one small book of business for $2.5 million in the Benefits and Insurance Services practice group and recorded a gain of $2.4 million. This gain is recorded as “Other (expense) income, net” in the accompanying Condensed Consolidated Statements of Comprehensive Income. Gain on book of business sales in the three and nine months ended September 30, 2021 was immaterial.

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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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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