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Business Combination | 6 Months Ended
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Jun. 30, 2017
Business Combinations [Abstract] |
Business Combination | Business Combination On June 1, 2017, the Company completed the acquisition of RidgeWorth (the "Acquisition"), a multi-boutique asset manager with approximately $40.1 billion in assets under management ("AUM"), including $35.7 billion in long term AUM. The Acquisition significantly increased AUM, and provided a wider range of strategies for institutional and individual investors, and broader distribution and client service resources. Total purchase price of the Acquisition was $547.1 million, comprising $485.2 million for the business and $61.9 million for certain balance sheet investments. At the closing, the Company paid $471.4 million in cash, issued 213,669 shares of the Company's common stock with a value of $21.7 million based on a stock price of $101.76, and recorded $51.7 million in contingent consideration and $2.3 million in deferred cash consideration. The conditions for the $51.7 million of contingent consideration were met as of June 30, 2017, and the Company expects to pay this amount during the fourth quarter of 2017. The total purchase price is subject to finalization of agreed upon working capital levels for the acquired business, which is expected to be completed by the end of the year. The Company accounted for the acquisition in accordance with ASC 805, Business Combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the Acquisition. Given the timing of this transaction and complexity of the purchase accounting, our estimate of the fair value adjustment specific to the acquired intangible assets and final tax positions is preliminary. We intend to finalize the accounting for these items as soon as reasonably possible. The Company may adjust the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the closing date as it obtains more information as to facts and circumstances existing as of the acquisition date. The excess purchase price over the estimated fair values of assets acquired and liabilities and non-controlling interests assumed of $164.4 million was recorded as goodwill. As of June 30, 2017, $123.0 million of the goodwill is expected to be deductible for tax purposes. It is anticipated that the $51.7 million of contingent consideration will be allocated to goodwill when settled, which we expect will be tax deductible. The following table summarizes the initial estimate of amounts of identified acquired assets and liabilities assumed as of the acquisition date:
| June 1, 2017
($ in thousands) |
Assets: |
Cash and cash equivalents | 39,343 |
Investments | 5,516 |
Accounts receivable | 19,941 |
Assets of consolidated investment products ("CIP") |  |
Cash and cash equivalents of CIP | 38,261 |
Investments of CIP | 902,493 |
Other assets of CIP | 21,158 |
Furniture, equipment and leasehold improvements | 5,505 |
Intangible assets | 275,700 |
Goodwill | 164,382 |
Deferred taxes, net | 5,573 |
Other assets | 3,003 |
Total Assets | 1,480,875 |
Liabilities |  |
Accrued compensation and benefits | 18,263 |
Accounts payable and accrued liabilities | 11,938 |
Other liabilities | 2,601 |
Liabilities of consolidated investment products ("CIP") |
Notes payable of CIP | 770,160 |
Securities purchased payable and other liabilities of CIP | 115,100 |
Noncontrolling Interests of CIP | 15,731 |
Total Liabilities & Noncontrolling Interests | 933,793 |
Total Net Assets Acquired | 547,082 |
Identifiable Intangible Assets Acquired In connection with the allocation of the purchase price, we identified indefinite-lived trade names with an estimated fair value of $8.7 million as well as the following definite-lived intangible assets:
| June 1, 2017
| Approximate Fair Value |  | Weighted Average of Useful Life
($ in thousands) |  |  |
Mutual Fund Investment Contracts | 189,200 |  |  | 16.0 years
Institutional and Retail Separate Account Investment Contracts | 77,000 |  |  | 10.4 years
Trademarks/Trade Names | $ | 800 |  |  | 10.0 years
Total Finite-Lived Intangible Assets | $ | 267,000 |  |  |
Acquired Business For the three months ended June 30, 2017, the Company incurred $16.3 million in transaction and integration costs associated with the acquisition comprised of $8.6 million in severance charges, $5.6 million of other operating expenses, and $2.1 million in employment expenses. Income of the acquired business subsequent to the effective closing date of the Acquisition of June 1, 2017 within the quarter ended June 30, 2017, was as follows:
| One Month Ended
| June 30, 2017
($ in thousands) |
Total Revenues | 11,536 |
Restructuring and severance | 8,396 |
All other operating expenses | 8,564 |
Operating Loss | (5,424 | )
Loss Before Income Taxes | (5,398 | )
The following Unaudited Pro Forma Condensed Consolidated Results of Operations are provided for illustrative purposes only and assume that the acquisition occurred on January 1, 2016. The unaudited pro forma information also reflects adjustment for transaction and integration expenses as if the transaction had been consummated on January 1, 2016. This unaudited information should not be relied upon as being indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future.
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
($ in thousands, except per share amounts) |  |  |  |  |  |  |
Total Revenues | $ | 119,803 |  |  | $ | 115,713 |  |  | $ | 237,395 |  |  | $ | 231,081 |
Net (Loss) Income Attributable to Common Stockholders | $ | (2,724 | ) |  | $ | (1,124 | ) |  | $ | 9,982 |  |  | $ | 6,503 |
Basic EPS | $ | (0.39 | ) |  | $ | (0.13 | ) |  | $ | 1.47 |  |  | $ | 1.26 |
Diluted EPS | $ | (0.39 | ) |  | $ | (0.13 | ) |  | $ | 1.42 |  |  | $ | 0.75 |

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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://www.xbrl.org/2003/role/presentationRef -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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