Aarons 2015 Annual Report Download - page 68
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The estimated intangible assets attributable to the DAMI acquisition are comprised of the following:
Technology $ 2,550
5.0
Trade Names and Trademarks 500
10.0
Non-compete Agreements 350
5.0
Total Acquired Intangible Assets1$ 3,400
1 Acquired definite-lived intangible assets have a total weighted average life of 5.7 years.
During the year ended December 31, 2015, the Company incurred $3.7 million of transaction costs in connection with the acquisition of DAMI. These costs
were included in the line item operating expenses in the consolidated statements of earnings. In addition, the Company incurred approximately $425,000 in
debt financing costs related to the assumed debt, which has been capitalized as a component of prepaid expenses and other assets in the consolidated balance
sheets.
Progressive Acquisition
On April 14, 2014, the Company acquired a 100% ownership interest in Progressive, a leading virtual lease-to-own company, for a total purchase price of
$705.8 million, inclusive of cash acquired of $5.8 million. Progressive provides lease-purchase solutions in 46 states. The Company believes the Progressive
acquisition will be strategically transformational and will strengthen its business.
The following table reconciles the total estimated purchase price of the Company’s acquisition of Progressive:
Proceeds from Private Placement Note Issuance $ 300,000
Proceeds from Term Loan 126,250
Proceeds from Revolving Credit Facility 65,000
Cash Consideration 185,454
Deferred Cash Consideration 29,106
Purchase Price $ 705,810
Refer to Note 7 for additional information regarding the debt incurred to partially finance the Progressive acquisition.
The initial deferred cash consideration had amounts outstanding as of December 31, 2015 of $789,000 in withheld escrow amounts.
The purchase price includes a primary escrow of $35.8 million to secure indemnification obligations of the sellers relating to the accuracy of representations,
warranties and the satisfaction of covenants. As of December 31, 2015, primary escrow funds of $8.5 million have been withheld to cover pending litigation.
In addition, the purchase price includes a secondary escrow of $15.8 million to secure indemnification obligations of the sellers relating to certain acquired
tax-related contingent liabilities. The Company believes that $13.4 million is fully recoverable from the secondary escrow account and included this
indemnification asset as a receivable in the Company's acquisition accounting. $10.0 million had been distributed as of December 31, 2015. Any remaining
undisputed balance is payable to the sellers 36 months from the April 14, 2014 closing date.
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