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20) Acquisitions | 12 Months Ended
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Dec. 31, 2019
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20) Acquisitions | `20)```Acquisitions Kilpatrick Life Insurance Company On December 13, 2019, the Company, through its wholly owned subsidiary, Security National Life Insurance Company (“Security National Life”) completed a stock purchase transaction with Kilpatrick Life Insurance Company, a Louisiana domiciled life insurance company (“Kilpatrick Life”) and its shareholders, which resulted in the purchase of all the outstanding shares of common stock of Kilpatrick Life. The closing of the transaction was subject to approval by the Louisiana Department of Insurance of the change of control of Kilpatrick Life, which was received on December 12, 2019. Under the terms of the transaction, the total Purchase Price that Security National Life paid for all the shares held by the Kilpatrick shareholders was $23,779,940 subject to a $1,400,000 holdback, as agreed with the shareholders. Kilpatrick Life has been in operation since 1932 and provides life insurance products and services through insurance plans such as permanent and term life insurance, asset protection plans, graded whole life insurance, and annuities. Additionally, it provides insurance services for emergencies and pre‐arranged funeral services. Kilpatrick Life is based in Shreveport, Louisiana with additional offices in Jena, Alexandria, Minden, and Arcadia, Louisiana. Kilpatrick Life employs a staff of almost 120 associates in four offices in Louisiana and is licensed to operate in Louisiana, Texas, Arkansas, Oklahoma, and Mississippi with the home office located in Shreveport, LA. It is the mission of Kilpatrick Life to continue providing the utmost service and protection for its policyholders for generations to come. Prior to the stock purchase transaction, Security National life and Kilpatrick Life entered into a coinsurance agreement, effective October 1, 2019. After the effective date, Security National Life, as coinsurer, agreed to be responsible for and was obligated with respect to 100% of the contractual liabilities under the Kilpatrick Life’s life insurance policies in accordance with the terms and conditions of the policies and applicable law. Unless otherwise directed by Security National Life, as coinsurer, Kilpatrick Life continued to administer the policies on behalf of Security National Life, as coinsurer, for the duration of the coinsurance agreement. As part of the coinsurance agreement, effective October 1, 2019, Security National Life acquired the following assets and assumed the following contractual liabilities.
Other investments and policy loans | $ 9,124,459
Real estate held for investment | 2,850,000
Mortgage loans held for investment | 200,000
Receivables | 131,258
Total assets acquired | 12,305,717
Future policy benefits and unpaid claims | (165,404,970)
Other liabilities and accrued expenses | (5,259,341)
Total liabilities assumed | (170,664,311)
Cash received for reinsurance assumed | $ 158,358,594
Contemporaneous with the stock purchase transaction, both Kilpatrick Life and Security National Life, as coinsurer, agreed terminate the coinsurance agreement, to require the recapture of the life insurance policies by Kilpatrick Life and provided notification to the Louisiana Department of Insurance. The final settlement and transfer of the coinsurance trust assets from Security National Life back to Kilpatrick Life occurred shortly thereafter. The estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition, on December 13, 2019, are shown in the following table. At the time of acquisition some of these assets and liabilities became intercompany items, and the Company has eliminated them for consolidation.
Fixed maturity securities, available for sale | $ 22,766,520 |
Fixed maturity securities, held to maturity | 16,436 |
Mortgage loans held for investment | 8,011,660 |
Real estate held for investment | 2,708,557 |
Other investments | 446,655 |
Accrued investment income | 183,527 |
Total investments | 34,133,355 |
Cash and cash equivalents | 6,900,654 |
Receivables, net | 5,407,736 | (1)
Receivables from reinsurers | 168,105,064 | (1)
Property and equipment, net | 1,498,245 |
Value of business acquired | 4,962,831 |
Deferred taxes | 167,344 |
Other | 712,323 |
Total assets acquired | 221,887,552 |
Future policy benefits and unpaid claims | (189,071,407) |
Accounts payable | (283,304) |
Other liabilities and accrued expenses | (7,870,944) |
Income taxes | (881,957) |
Total liabilities assumed | (198,107,612) |
Fair value of net assets acquired/consideration paid | $ 23,779,940 |
Fair value of net assets acquired/consideration paid, net of cash acquired | $ 16,879,286 |
(1) Receivable from reinsurers of $162,907,008 and receivables, net of $5,000,000 were settled with the recapture of the coinsurance agreement by Kilpatrick Life from Security National Life.
Kilpatrick Life’s revenues and net loss since the date of acquisition were $1,461,011 and $848,031, respectively. Probst Family Funerals and Cremations and Heber Valley Funeral Home On February 15, 2019, the Company, through its wholly-owned subsidiary, Memorial Mortuary Inc., completed an asset purchase transaction with Probst Family Funerals and Cremations, LLC. (“Probst Family Funerals”) and Heber Valley Funeral Home, Inc. (“Heber Valley Funeral Home”). These funeral homes are both located in Heber Valley, a community situated about 45 miles southeast of Salt Lake City. Under the terms of the transaction, as set forth in the Asset Purchase Agreement, dated February 15, 2019, Memorial Mortuary Inc. paid a net purchase price of $3,315,647 for the business and assets of Probst Family Funerals and Heber Valley Funeral Home, subject to a $150,000 holdback. In August 2019, this escrow account was settled and $137,550 was paid to the prior owners. The estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition were as follows:
Cash | $ 53,859
Property and equipment | 2,475,526
Receivables | 13,620
Goodwill | 754,018
Other | 21,800
Total assets acquired | 3,318,823
Bank and other loans payable | (3,176)
Total liabilities assumed | (3,176)
Fair value of net assets acquired/consideration paid | $ 3,315,647
Fair value of net assets acquired/consideration paid, net of cash acquired | $ 3,261,788
Probst Family Funerals and Heber Valley Funeral Home’s revenues and net earnings since the date of acquisition were $796,992 and $97,400, respectively. Beta Capital Corp. On June 1, 2018, the Company completed a stock purchase transaction with Beta Capital Corp. ("Beta Capital") and Ronald D. Maxson ("Maxson"), the sole owner of all the outstanding shares of common stock of Beta Capital, to purchase all of the outstanding shares of common stock of Beta Capital. Beta Capital is engaged in the operation of a factoring business with the principal purpose of providing funding for funeral homes and mortuaries. Under the terms of the transaction, as set forth in the Stock Purchase Agreement, dated June 1, 2018, by and among the Company, Beta Capital and Maxson, the Company paid Maxson the purchase consideration at the closing of the transaction equal to the sum of (i) $890,000 in cash plus (ii) the accounts receivable value of $2,515,783, representing the total amount of the Company's outstanding receivables as of the closing date of June 1, 2018, for a total closing payment of $3,405,783. From the $3,405,783 closing payment, a holdback amount equal to $175,000 was deposited into an interest bearing escrow account. In November 2019, this escrow account was settled and $169,190 was paid to the prior owner. The estimated fair values of the assets acquired at the date of acquisition were as follows:
Other investments - insurance assignments | $ 2,515,783
Other - customer list intangible asset | 890,000
Total assets acquired | 3,405,783
Fair value of net assets acquired/consideration paid | $ 3,405,783

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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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