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Acquisitions | 12 Months Ended
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Dec. 31, 2022
Business Combinations [Abstract] |
Acquisitions | 2. Acquisitions 2022 Acquisitions The Company acquired four businesses during the year ended December 31, 2022. The acquisitions were accounted for under the acquisition method of accounting. As such, the purchase consideration for each acquired business was allocated to the acquired tangible and intangible assets and liabilities assumed based upon their respective fair values. Assets acquired and liabilities assumed in the business combinations were recorded on the Company’s financial statements as of the acquisition date based upon the estimated fair value at such date. The excess of the purchase consideration over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The allocation of the excess purchase price was based upon preliminary estimates and assumptions and is subject to post-close adjustments to working capital. Accordingly, the measurement period for such purchase price allocations will end when the information, or the facts and circumstances, becomes available, but will not exceed twelve months. The results of operations of each acquired business has been included in the Consolidated Statements of Operations and Comprehensive (Loss) Income since its respective date of acquisition. The aggregate purchase price for the acquisitions referenced above was $75.5 million, which includes $74.2 million paid in cash, $0.5 million recorded as contingent consideration liabilities, and $0.8 million recorded as holdback amounts. Contingent consideration payments are determined based on future financial performance and payment obligations (as defined in the applicable purchase agreement) and are recorded at fair value. The maximum potential payment outcome related to the acquisitions is $1.6 million. Holdback amounts are used to withhold a portion of the initial purchase price payment until certain post-closing conditions are satisfied and are typically settled within 24 months of the acquisition. The goodwill related to the acquisitions represented the value paid for the assembled workforce, geographic presence, and expertise. Of the resulting goodwill relating to these acquisitions, $1.0 million is deductible for tax purposes. The fair values of the identifiable assets and liabilities of the acquisitions less post-close adjustments related to working capital completed during the year ended December 31, 2022, as of the applicable acquisition dates, are as follows:
(in thousands) |  |  |
Consideration: |  |  |
Cash |  | $ | 74,206 |
Holdback |  |  | 810 |
Fair value of contingent consideration |  |  | 510 |
Total consideration |  | $ | 75,526 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |
Assets |  |  |
Accounts receivable |  | $ | 6,817 |
Other assets |  |  | 3,446 |
Identifiable intangible assets |  |  | 25,546 |
Total assets |  |  | 35,809 |
Liabilities |  |  |
Accounts payable |  |  | 7,363 |
Deferred tax liabilities and other |  |  | 8,546 |
Total liabilities |  |  | 15,909 |
Redeemable noncontrolling interest |  |  | 1,987 |
Noncontrolling interest |  |  | 974 |
Total identifiable net assets |  |  | 16,939 |
Goodwill arising from acquisitions |  | $ | 58,587 |
The identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives. The fair value and estimated useful lives of the intangible assets acquired are as follows:
(in thousands) |  | Amount |  |  | Weighted Average Useful Life
Client relationships |  | $ | 24,413 |  |  | 6 years
Trade names |  |  | 1,133 |  |  | 5 years
Total identifiable intangible assets |  | $ | 25,546 |  |  |
The operating results of the businesses acquired during the year ended December 31, 2022 contributed total revenues of $35.2 million during the year ended December 31, 2022. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of the operations upon acquisition. During the year ended December 31, 2022, the Company incurred $0.8 million in transaction costs related to the acquisitions described above. These costs have been included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income. 2021 Acquisitions The Company acquired six businesses during the year ended December 31, 2021. The acquisitions were accounted for under the acquisition method of accounting. As such, the purchase consideration for each acquired business was allocated to the acquired tangible and intangible assets and liabilities assumed based upon their respective fair values. Assets acquired and liabilities assumed in the business combination were recorded on the Company’s financial statements as of the acquisition date based upon the estimated fair value at such date. The excess of the purchase consideration over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The allocation of the excess purchase price was based upon preliminary estimates and assumptions. The results of operations of each acquired business has been included in the Consolidated Statements of Operations and Comprehensive (Loss) Income since its respective date of acquisition. The aggregate purchase price for the acquisitions referenced above was $76.0 million, which includes $42.7 million paid in cash, $19.8 million recorded as contingent consideration liabilities, and $13.5 million recorded as holdback amounts. Contingent consideration payments are determined based on future financial performance and payment obligations (as defined in the applicable purchase agreement) and are recorded at fair value. The maximum potential payment outcome related to the acquisitions is $71.4 million. Holdback amounts are used to withhold a portion of the initial purchase price payment until certain post-closing conditions are satisfied and are typically settled within 24 months of the acquisition. The goodwill related to the acquisitions represented the value paid for the assembled workforce, geographic presence, and expertise. Of the resulting goodwill relating to these acquisitions, $14.3 million is deductible for tax purposes. The fair values of the identifiable assets and liabilities of the acquisitions completed during the year ended December 31, 2021, at the respective acquisition dates, are as follows:
(in thousands) |  |  |
Consideration |  |  |
Cash |  | $ | 42,668 |
Holdbacks |  |  | 13,464 |
Fair value of contingent consideration |  |  | 19,832 |
Total consideration |  | $ | 75,964 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |
Assets |  |  |
Accounts receivable |  | $ | 12,677 |
Other assets |  |  | 4,315 |
Property and equipment |  |  | 998 |
Identifiable intangible assets |  |  | 35,571 |
Total assets |  |  | 53,561 |
Liabilities |  |  |
Total liabilities |  |  | 21,206 |
Redeemable noncontrolling interest |  |  | 1,793 |
Total identifiable net assets |  |  | 30,562 |
Goodwill arising from acquisitions |  | $ | 45,402 |
The identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives. The fair value and estimated useful lives of the intangible assets acquired are as follows:
(in thousands) |  | Amount |  |  | Weighted Average Useful Life
Client relationships |  | $ | 27,387 |  |  | 7 years
Trade names |  |  | 5,084 |  |  | 5 years
Developed technology |  |  | 3,100 |  |  | 7 years
Total identifiable intangible assets |  | $ | 35,571 |  |  |
The operating results of the businesses acquired during the year ended December 31, 2021 contributed total revenues of $75.9 million during the year ended December 31, 2021. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of the operations upon acquisition. During the year ended December 31, 2021, the Company incurred $1.6 million, in transaction costs related to the acquisitions described above. These costs have been included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income. 2020 Acquisitions The Company acquired five businesses during the year ended December 31, 2020, of which three were sales agencies and two marketing agencies in the United States. The acquisitions were accounted for under the acquisition method of accounting. As such, the purchase consideration for each acquired business was allocated to the acquired tangible and intangible assets and liabilities assumed based upon their respective fair values. Assets acquired and liabilities assumed in the business combination were recorded on the Company’s financial statements as of the acquisition date based upon the estimated fair value at such date. The excess of the purchase consideration over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The allocation of the excess purchase price was based upon estimates and assumptions. The results of operations of the business acquired by the Company have been included in the Consolidated Statements of Operations and Comprehensive (Loss) Income since the date of acquisition. The aggregate purchase price for the acquisitions referenced above was $88.1 million, which includes $68.0 million paid in cash, $14.8 million recorded as contingent consideration liabilities, and $5.3 million recorded as holdback amounts. Contingent consideration payments are determined based on future financial performance and payment obligations (as defined in the applicable purchase agreement) and recorded at fair value. The maximum potential payment outcome related to the acquisitions is $53.0 million. Holdback amounts are used to withhold a portion of the initial purchase price payment until certain post-closing conditions are satisfied and are typically settled within 24 months of the acquisition. The goodwill related to the acquisitions represented the value paid for the assembled workforce, geographic presence, and expertise. Of the resulting goodwill relating to these acquisitions, $26.7 million is deductible for tax purposes. The fair values of the identifiable assets and liabilities of the acquisitions completed during the year ended December 31, 2020, at the respective acquisition dates, are as follows:
(in thousands) |  |  |
Consideration |  |  |
Cash |  | $ | 68,057 |
Holdbacks |  |  | 5,260 |
Fair value of contingent consideration |  |  | 14,766 |
Total consideration |  | $ | 88,083 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |
Assets |  |  |
Accounts receivable |  | $ | 3,542 |
Other assets |  |  | 2,936 |
Property and equipment |  |  | 321 |
Identifiable intangible assets |  |  | 42,460 |
Total assets |  |  | 49,259 |
Liabilities |  |  |
Total liabilities |  |  | 4,569 |
Total identifiable net assets |  |  | 44,690 |
Goodwill arising from acquisitions |  | $ | 43,393 |
The identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives. The fair value and estimated useful lives of the intangible assets acquired are as follows:
(in thousands) |  | Amount |  |  | Weighted Average Useful Life
Client relationships |  | $ | 42,460 |  |  | 6 years
The operating results of the businesses acquired during the year ended December 31, 2020 contributed total revenues of $64.3 million in the year ended December 31, 2020. The Company has determined that the presentation of net income or loss from the date of acquisition is impracticable due to the integration of the operations upon acquisition. During the year ended December 31, 2020, the Company incurred $0.2 million in transaction costs related to the acquisitions described above. These costs have been included in “Selling, general, and administrative expenses” in the Consolidated Statement of Operations and Comprehensive (Loss) Income. Supplemental Pro Forma Information (unaudited) Supplemental information on an unaudited pro forma basis, presented as if the acquisitions executed during the period from January 1, 2020 to March 1, 2023 had been consummated as of the beginning of the comparative prior period, is as follows:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |  | 2020 |
(in thousands) |  |  |  |  |  |  |  |
Revenues |  | $ | 4,065,242 |  |  | $ | 3,767,716 |  | $ | 3,339,221 |
Net (loss) income |  | $ | (1,377,436 | ) |  | $ | 59,983 |  | $ | (168,954 | )
The unaudited pro forma supplemental information is based on estimates and assumptions which the Company believes are reasonable and reflects the pro forma impact of additional amortization related to the fair value of acquired intangible assets, the pro forma impact of transaction costs which consisted of legal, advisory and due diligence fees and expenses, and the pro forma tax effect of the pro forma adjustments for the years ended December 31, 2022, 2021, and 2020. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisitions been consummated during the periods for which pro forma information is presented.

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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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- References No definition available. + Details
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