Assurant 2014 Annual Report Download - page 105

ASSURANT, INC. – 2014 Form 10-K F-17
3 Acquisitions
set of disclosure requirements. The amended guidance is
effective for interim and annual periods beginning after
December 15, 2016 and early adoption is not permitted.
Therefore, the Company is required to adopt the guidance on
January 1, 2017. An entity can choose to apply the amended
guidance using either the full retrospective approach or a
modifi ed retrospective approach. The Company is currently
evaluating the requirements of the revenue recognition
guidance as it relates to its non-insurance contract revenue
and the potential impact on the Company’s fi nancial position
and results of operations.
3. Acquisitions
On October 31, 2014, the Company acquired CWI Group,
a mobile insurance administrator in France, for €56,937
($71,393) in cash. In connection with the acquisition, the
Company recorded €26,485 ($33,399) of customer and market
based intangible assets, all of which are amortizable over
1 to 8 year periods, and €37,369 ($47,123) of goodwill, none
of which is tax-deductible. The acquisition agreement also
calls for a potential earnout based on future performance.
The primary factor contributing to the recognition of goodwill
is the future expected growth of this business within Assurant
Solutions.
On September 3, 2014, the Company acquired eMortgage
Logic, LLC, a national provider of residential valuation
products and valuation technology services. The acquisition-
date fair value of the consideration transferred totaled
$28,263, which primarily consists of an initial cash payment of
$17,000 and a contingent payment of $10,231. The contingent
consideration arrangement is based on future expected
revenue. In connection with the acquisition, the Company
recorded $11,270 of customer and technology based intangible
assets, all of which are amortizable over 3 to 11 year periods,
and $14,058 of goodwill, all of which is tax-deductible. The
primary factor contributing to the recognition of goodwill is
the future expected growth of this business within Assurant
Specialty Property.
On April 16, 2014, the Company acquired StreetLinks, LLC, a
leading independent appraisal management company, from
Novation Companies, Inc. The acquisition-date fair value of the
consideration transferred totaled $65,905, which consists of an
initial cash payment of $60,905 and a contingent payment of
$5,000. The contingent consideration arrangement is based on
future expected revenue. In connection with the acquisition,
the Company recorded $47,970 of customer and technology
based intangible assets, all of which are amortizable over
2 to 12 year periods, and $14,738 of goodwill, none of which
is tax-deductible. The primary factor contributing to the
recognition of goodwill is the future expected growth of this
business within Assurant Specialty Property.
On December 30, 2013, the Company paid Mex$1,191,499
(U.S.D $91,420) for a 40% investment in the Mexican operations
of Iké Asistencia (“Iké”), a services assistance business with
operations in Mexico and other countries in Latin America.
On February 10, 2014, the Company made an additional
payment of Mex$272,541 (U.S.D $20,404) for 40% of Iké’s
Latin American operations. Following these payments, the
Company owns 40% of the equity interests and outstanding
shares of Iké and, under the terms of the agreements, will
also have options to acquire the remaining interest in Iké
over time.
The Company concluded that Iké is a VIE; however, it does
not have the controlling fi nancial interest to direct the
activities of the VIE that most signifi cantly impact the
VIE’s economic performance. Accordingly, the investment
in Iké is recorded under the equity method of accounting
and the resulting investment in this unconsolidated entity
is included in other assets on the consolidated balance
sheets. The Company’s income from its investment in Iké
is included in fees and other income of the consolidated
statements of operations. This income is adjusted for
basis differences, such as the amortization of separately
identifi able intangible assets.
The estimated fair value of a net put option to acquire the
remaining interests of Iké is included in accounts payable
and other liabilities of the consolidated balance sheets. The
estimated fair value of the net put option will be remeasured
each quarter and any changes in the fair value are included
in fees and other income in the consolidated statements of
operations.
An indemnifi cation asset that approximates the estimated
contingencies related to uncertain tax positions for Iké
is included in other assets on the consolidated balance
sheets. Any subsequent changes in the indemnifi cation
asset are recorded as an offset to the investment in this
unconsolidated entity.
On October 25, 2013, the Company acquired Lifestyle
Services Group, a mobile phone insurance provider based in
the U.K. The acquisition-date fair value of the consideration
transferred totaled £106,394 ($172,156), which consisted
of an initial cash payment of £87,081 ($140,906), a delayed
payment of £3,000 ($4,854) and contingent consideration
of an additional £16,313 ($26,395), payable no later than
March 31, 2014. On March 24, 2014, the Company made
the required delayed payment of £3,000 ($4,951) and
contingent payment of £16,313 ($26,920). The contingent
payment was made given the stipulated contractual renewal
of a key client. In connection with the acquisition, the
Company recorded £45,266 ($73,245) of customer related
intangibles, all of which are amortizable over 2 to 10 year
periods, and £70,234 ($113,646) of goodwill, none of which