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ACQUISITIONS AND DISPOSITIONS | 3 Months Ended
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Jan. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
ACQUISITIONS AND DISPOSITIONS | ACQUISITIONS AND DISPOSITIONS Acquisition of Able On September 30, 2021, we acquired Able, a leading facilities services company headquartered in San Francisco, California, for a preliminary net cash purchase price of $741.7 million (the “Able Acquisition”). Pursuant to the terms of the purchase agreement, approximately $12.1 million of the cash consideration was placed into escrow accounts, of which approximately $8.2 million was placed into escrow to satisfy any applicable indemnification claims for a period of 12 months. 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 consideration and allocations are subject to, among other items: working capital adjustments, further analysis of tax accounts, legal matters, and the final valuation of insurance claims reserves. During the three months ended January 31, 2022, we adjusted our purchase price allocation for probable litigation losses, as described below, and refined certain other estimates. The following table summarizes the preliminary acquisition accounting on the date of acquisition as previously reported at year-end 2021 and at the end of the first quarter of 2022:
(in millions) |  | Preliminary Purchase Price Allocation |  | Adjustments |  | Updated Preliminary Purchase Price Allocation
Cash and cash equivalents |  | $ | 31.5 |  |  | $ | — |  |  | $ | 31.5 |
Trade accounts receivable(1) |  | 159.3 |  |  | — |  |  | 159.3 |
Other assets |  | 24.9 |  |  | (1.1) |  |  | 23.8 |
Customer relationships(2) |  | 220.0 |  |  | — |  |  | 220.0 |
Trade names(2) |  | 10.0 |  |  | — |  |  | 10.0 |
Goodwill(3) |  | 554.0 |  |  | 9.8 |  |  | 563.8 |
Trade accounts payable |  | (27.0) |  |  | (0.2) |  |  | (27.1) |
Accrued compensation |  | (38.2) |  |  | — |  |  | (38.2) |
Insurance claims |  | (91.6) |  |  | — |  |  | (91.6) |
Other liabilities |  | (41.7) |  |  | (8.5) |  |  | (50.3) |
Deferred income tax liability, net |  | (59.5) |  |  | — |  |  | (59.5) |
Net assets acquired |  | $ | 741.7 |  |  | $ | — |  |  | $ | 741.7 |
(1) The gross amount of trade accounts receivable was $160.6 million, of which $1.3 million was deemed uncollectible. (2) The amortization periods for the acquired intangible assets are 15 years for customer relationships and two 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 The unaudited Consolidated Statements of Comprehensive Income (Loss) for the three months ended January 31, 2022, includes $307.7 million of revenue and $14.4 million of operating income attributable to the operations of Able, which are included in our B&I segment. We also incurred $4.1 million of acquisition-related costs and $4.2 million of integration costs during the three months ended January 31, 2022, which are included in selling, general and administrative expenses in the accompanying unaudited Consolidated Statements of Comprehensive Income (Loss). The following table presents our unaudited pro forma results as though the acquisition occurred on November 1, 2020. These 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 28%. These unaudited pro forma results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies.
(in millions) |  | Three Months Ended January 31, 2021
Pro forma revenue |  | $ | 1,768.2 |
Pro forma income from operations |  | 76.1 |
Legal Matters Related to Legacy Able Able is a party to a number of lawsuits, claims, and proceedings incident to the operation of the business, including those pertaining to labor and employment, contracts, personal injury, and other matters, some of which allege substantial monetary damages. Some of these actions may be brought as class actions on behalf of a class or purported class of employees. If, during the purchase price allocation period, we can reasonably determine the fair values of a pre-acquisition contingency, then we will include that amount in the purchase price allocation. If we are unable to determine the fair value of a pre-acquisition contingency at the end of the measurement period, then we will evaluate whether to include an amount in the purchase price allocation based on whether it is probable a liability had been incurred and whether an amount can be reasonably estimated. Subsequent to the end of the measurement period, any adjustment to amounts recorded for a pre-acquisition contingency will be included within acquisition-related costs in the period in which the adjustment is determined. During the three months ended January 31, 2022, we adjusted our purchase price allocation for probable litigation losses in Able legal matters where a reasonable estimate of the loss could be made from $0.9 million to $12.3 million. We do not accrue for contingent losses that, in our judgment, are considered to be reasonably possible but not probable. The estimation of reasonably possible losses also requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. Our management currently estimates the range of loss for all reasonably possible losses for which a reasonable estimate of the loss can be made for Able legal matters is between zero and $1.9 million. In some cases, although a loss is probable or reasonably possible, we cannot reasonably estimate the maximum potential losses for probable matters or the range of losses for reasonably possible matters. Therefore, our accrual for probable losses and our estimated range of loss for reasonably possible losses do not represent our maximum possible exposure. Disposition of Assets On January 31, 2022, the Company sold a group of customer contracts for healthcare technology management within our Technical Solutions segment for $8.5 million and recognized a gain of $7.7 million during the three months ended January 31, 2022, which is included in selling, general and administrative expenses in the accompanying unaudited Consolidated Statements of Comprehensive Income (Loss).

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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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