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Business Acquisitions and Dispositions | 12 Months Ended
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Dec. 31, 2020
Business Combinations [Abstract] |
Business Acquisitions and Dispositions |
3. | Business Acquisitions and Dispositions
Dispositions On June 1, 2020, the Company sold its 51% interest in Crawford Compliance Inc. to a third party in exchange for a note receivable. The Company recognized a loss on the disposal of this entity of $912,000 in 2020. The results of Crawford Compliance Inc. were not material to the Company. On June 12, 2020, the Company sold its 51% interest in Lloyd Warwick International (“LWI”) to a third party for cash proceeds of $19,600,000 and payment of $3,600,000 to settle intercompany indebtedness. The Company recognized an additional $700,000 related to net working capital adjustments under the terms of the acquisition agreement, which increased the purchase price to $20,300,000. The Company recognized a total gain of $14,700,000 ($11,700,000 net of tax) on the disposition for the year ended December 31, 2020. Acquisitions On July 21, 2020, the Company acquired the remaining 15% membership interests of WeGoLook, LLC for $310,000. The Company accounted for this subsequent acquisition as an equity transaction in accordance with ASC 810-10, “Consolidation”. The non-compete agreements with the former minority members were terminated under the terms of the purchase agreement. As a result, the Company recognized $1,100,000 of accelerated amortization on the non-compete agreement in 2020. On October 1, 2020, the Company acquired most of the remaining 85% equity interests in Crawford Carvallo and its subsidiaries. Crawford Carvallo is a leading provider of loss adjusting, claims management solutions and legal services in Chile. The Company held a 15% interest in Crawford Carvallo prior to this acquisition. The purchase price includes an initial cash payment of $11,600,000 and a maximum of $11,700,000 payable over the next six years based on achieving certain EBITDA performance goals as set forth in the purchase agreement. Net tangible assets acquired totaled $15,120,000, including $1,599,000 of cash. The difference between the aggregate fair value of total purchase considerations and the previously held noncontrolling interest, and the net tangible assets acquired represents definite-lived intangible assets, goodwill, and noncontrolling interest. The acquisition was funded primarily through additional borrowings under the Company's credit facility. The preliminary valuation of the assets acquired and liabilities assumed for Crawford Carvallo is as follows:
(in thousands) |  | Opening Balance Sheet, Adjusted as of December 31, 2020 |
Assets |  |  |  |
Cash and cash equivalents |  | $ | 1,599 |
Accounts receivable, net |  |  | 3,662 |
Unbilled revenue, at estimated billable amounts |  |  | 2,930 |
Prepaid expenses and other current assets |  |  | 3,613 |
Property and equipment, net |  |  | 828 |
Purchased software, net |  |  | 459 |
Operating lease right-of-use-asset, net |  |  | 8,743 |
Goodwill |  |  | 5,501 |
Intangible assets |  |  | 7,600 |
Other noncurrent assets |  |  | 277 |
Total Assets |  |  | 35,212 |
Liabilities |  |  |  |
Accounts payable |  |  | 1,014 |
Accrued expenses |  |  | 3,870 |
Tax liability |  |  | 662 |
Lease liabilities |  |  | 8,743 |
Long-term debt and other liabilities |  |  | 5,803 |
Total Liabilities |  |  | 20,092 |
Net Assets Acquired, Before Noncontrolling Interests |  |  | 15,120 |
Noncontrolling interest |  |  | 489 |
Net Assets Acquired, After Noncontrolling Interests |  | $ | 14,631 |
Intangible assets acquired include customer relationships, trademarks, internally developed software and non-compete agreements. The intangibles acquired are made up of customer relationships of $4,400,000 being amortized over an estimated life of 15 years, and the remaining assets listed above are being amortized over 10 years. Goodwill is attributable to the synergies of the work force in place and business resources as a result of the combination of the companies. The Company does not expect that goodwill attributable to the acquisition will be deductible for tax purposes. The financial results of certain of the Company’s international subsidiaries, including Crawford Carvallo, are included in the Company’s consolidated financial statements on a two-month delayed basis. For the year ended December 31, 2020, Crawford Carvallo reported revenue of $2,214,000 in the Company's consolidated revenues before reimbursements. The results of Crawford Carvallo are reported in Crawford Specialty Solutions and Crawford TPA Solutions segments. For the year ended December 31, 2020, Crawford Carvallo’s contribution to the Company's earnings and earnings per share were not material and as such, no pro forma financial information is required to be presented. During the year ended December 31, 2019, the Company acquired a Global Technical Services business in Europe for total consideration of approximately $2,431,000 which is comprised of $1,519,000 paid at closing, net of cash acquired of $135,000, $234,000 to be paid in one year, $351,000 to be paid in three years and contingent earnout consideration of $327,000. The acquisition was accounted for under the guidance of ASC 805-10, as a business combination under the acquisition method. As a result of the acquisition, the Company recognized definite lived intangible assets of $951,000 and goodwill of $1,164,000. The results of the acquisition is reported within the Company's Crawford Specialty Solutions operating segment. During the year ended December 31, 2018, the Company acquired two separate Global Technical Services businesses in Canada for total consideration of approximately $3,400,000 which is comprised of $2,500,000 paid at closing, net of cash acquired of $134,000, $348,000 to be paid in one year and contingent earnout consideration of $377,000. The acquisitions were accounted for under the guidance of ASC 805-10, as business combinations under the acquisition method. As a result of the acquisitions, the Company recognized net tangible assets of $462,000, net of both the deferred payment and contingent earnout, definite lived intangible assets of $1,094,000, goodwill of $1,296,000 and deferred taxes of $202,000. The results of the acquisitions are reported within the Company's Crawford Specialty Solutions operating segment.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: 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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