Business Acquisition (Notes)

3 Months Ended

Mar. 31, 2019

Business Combination Disclosure [Text Block]

Business Acquisition

In January 2019, the Company completed the acquisition of Health Solutions Plus (HSP), a software provider of healthcare payer administration solutions, for a total base consideration of $90 million and a maximum contingent consideration payment of $8 million based on a cumulative achievement over two years. Revenue and pre-tax income recorded since the acquisition date through March 31, 2019 were $4 million and $3 million, respectively.

The Company’s purchase price allocation for the HSP acquisition is preliminary and subject to revision as additional information related to the fair value of assets and liabilities becomes available. The preliminary purchase price based upon the current determination of fair values as at March 31, 2019 was as follows:



(in millions)	March 31, 2019
Fair Value of Consideration Transferred:
Cash paid	$	90
Recorded earn-out payable	7
Total Consideration	$	97
Allocation of Purchase Price:
Net tangible assets	$	10
Costs Assigned to Intangible Assets
Developed technology	20
Customer relationships	18
Trademarks and trade names	1
Goodwill	48
Total Intangible Assets	87

Total Assets	$	97

The useful lives are 7 years, 15 years and 1.5 years for Developed technology, Customer relationships and Trademarks and trade names, respectively. The acquired goodwill is associated with the Company's Commercial Industries segment. This acquired goodwill, while tax deductible, includes $7 million related to contingent consideration payable that is not tax deductible until it is earned and paid. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of HSP.

The Company has not presented separate results of operations or combined pro forma financial information of the Company and the acquired interests because the results of operations of the acquired business are considered immaterial.