XML 27 R8.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Acquisitions | 6 Months Ended
--- | ---
Apr. 30, 2018
Business Combinations [Abstract] |
Acquisitions | 3. ACQUISITIONS
Acquisition of GCA during 2017 On September 1, 2017, we acquired all of the outstanding stock of GCA, a provider of integrated facility services to educational institutions and commercial facilities, for a purchase price of approximately $1.3 billion. As described in Note 12, “Segment Information,” we integrated GCA’s operations into our industry group model effective November 1, 2017. As a result of the acquisition, we are now a leading facilities services provider in the education market. Consideration Transferred
(in millions, except per share data) |  |
Shares of ABM common stock, net of shares withheld for taxes |  | 9.4 |
ABM common stock closing market price at acquisition date |  | $ | 44.63 |
Fair value of ABM common stock at closing |  | 421.3 |
Cash consideration(1) |  | 837.5 |
Total consideration transferred |  | $ | 1,258.8 |
(1) Revised during the second quarter of 2018 to reflect a post-closing purchase price adjustment related to a net working capital settlement. Preliminary Purchase Price Allocation Our preliminary purchase price allocation is based on information that is currently available, and we are continuing to evaluate the underlying inputs and assumptions used in our valuations. Accordingly, the purchase price allocation is subject to, among other items: further analysis of tax accounts, including deferred tax liabilities, and final valuation of identifiable intangible assets. During the six months ended April 30, 2018, we refined our valuation of customer relationships and certain other estimates. The following table presents our preliminary estimates of fair values of the assets we acquired and the liabilities we assumed on the date of acquisition as previously reported at year-end 2017 and at the end of the second quarter of 2018.
|  | As reported at |  |  |  | As reported at
(in millions) |  | October 31, 2017 |  | Adjustments |  | April 30, 2018
Cash and cash equivalents |  | $ | 2.5 |  |  | $ | (2.3 | ) |  | $ | 0.2 |
Trade accounts receivable(1) |  | 118.1 |  |  |  |  |  | 118.1 |
Prepaid expenses and other current assets |  | 10.3 |  |  |  |  |  | 10.3 |
Property, plant and equipment |  | 41.4 |  |  | 0.1 |  |  | 41.5 |
Customer relationships(2) |  | 340.0 |  |  | (10.0 | ) |  | 330.0 |
Trade names(2) |  | 9.0 |  |  |  |  |  | 9.0 |
Goodwill(3) |  | 933.9 |  |  | (0.5 | ) |  | 933.4 |
Other assets |  | 4.2 |  |  | (0.2 | ) |  | 4.0 |
Trade accounts payable |  | (9.1 | ) |  | (0.4 | ) |  | (9.6 | )
Insurance reserves |  | (35.5 | ) |  | (0.2 | ) |  | (35.6 | )
Income taxes payable |  | (16.5 | ) |  | 8.2 |  |  | (8.3 | )
Accrued liabilities |  | (36.5 | ) |  | 2.9 |  |  | (33.5 | )
Deferred income tax liability, net |  | (92.6 | ) |  |  |  |  | (92.6 | )
Other liabilities |  | (8.1 | ) |  |  |  |  | (8.1 | )
Net assets acquired |  | $ | 1,261.3 |  |  | $ | (2.4 | ) |  | $ | 1,258.8 |
(1) The gross amount of trade accounts receivable was $122.0 million, of which $3.9 million is expected to be uncollectible. (2) The amortization periods for the acquired intangible assets are 15 years for customer relationships and 2 years for trade names. (3) Goodwill is largely attributable to value we expect to obtain from long-term business growth, the established workforce, and buyer-specific synergies. This goodwill is not deductible for income tax purposes. Financial Information For the three and six months ended April 30, 2018, we recorded revenue related to GCA of $256.4 million and $508.0 million, respectively, and operating profit of $7.5 million and $12.5 million, respectively. The following table presents our unaudited pro forma results as though the GCA acquisition occurred on November 1, 2015. The pro forma results include adjustments for the estimated amortization of intangible assets, interest expense, and the income tax impact of the pro forma adjustments at the statutory rate of 41%. These pro forma results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on November 1, 2015.
|  | Three Months Ended |  | Six Months Ended
(in millions) |  | April 30, 2017 |  | April 30, 2017
Pro forma revenue |  | $ | 1,560.5 |  |  | $ | 3,139.4 |
Pro forma income from continuing operations |  | 31.9 |  |  | 46.5 |
Other 2017 Acquisitions Effective December 1, 2016, we acquired all of the outstanding stock of Mechanical Solutions, Inc. (“MSI”), a provider of specialized HVAC, chiller, and plumbing services, for a purchase price of $12.6 million. The purchase price includes up to $1.0 million of undiscounted contingent consideration that is based on the expected achievement of certain pre-established revenue goals. See Note 6, “Fair Value of Financial Instruments,” regarding our valuation of contingent consideration liabilities. As of December 1, 2016, the operations of MSI are included in our Technical Solutions segment. Effective December 1, 2016, we also acquired all of the outstanding stock of OFJ Connections Ltd (“OFJ”), a provider of airport transportation services in the United Kingdom, for a purchase price of $6.3 million. As of December 1, 2016, the operations of OFJ are included in our Aviation segment. Pro Forma and Other Supplemental Financial Information Except for GCA, we do not present pro forma and other financial information for our other acquisitions, as they are not considered material business combinations individually or on a combined basis.

X
- 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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration