INTL FCStone 2012 Annual Report Download - page 115
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Please find page 115 of the 2012 INTL FCStone annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.INTL FCSTONE INC.Form10K 99
PART II
ITEM 8 Financial Statements and Supplementary Data
NOTE 18 Acquisitions
Acquisitions in 2012
During scal year 2012, the Company acquired three businesses
(Co ee Network, TRX Futures Limited and Aporte DTVM)
and certain assets of the Metals Division of MF Global UK
Limited, which were not considered signi cant on an individual or
aggregate basis. e Company’s consolidated nancial statements
include the operating results of the acquired businesses from the
dates of acquisition.
e total amount of goodwill and intangible assets, in connection
with these acquisitions, that is expected to be deductible for tax
purposes is $0.7 million as of September30, 2012.
Coff ee Network
In November2011, the Company entered into an agreement to
acquire 100% of the ownership interests in Co ee Network LLC
(“Co ee Network”), an online news and analysis portal for the
global co ee industry. Co ee Network provides up-to-the-minute
news and in-depth analysis to subscribers around the globe from a
network of correspondents and commodity analysts located in key
co ee producing and consuming regions. ese services provide
a unique information solution to subscribers and a competitive
advantage in today’s information-driven marketplace.
e purchase price for the Co ee Network acquisition consists
of an initial payment of $0.2 million, three additional annual
contingent payments and a nal contingent payment. See Note11
for discussion of the contingent payments. e present value of the
estimated total purchase price, including contingent consideration,
is less than $0.3 million. e value of certain assets and liabilities are
preliminary in nature, and are subject to adjustment as additional
information is obtained, including but not limited to the nalization
of the calculation of the contingent consideration and valuation
of separately identi able intangible assets. e intangible assets
recognized in this transaction were assigned to the C&RM segment.
Purchase costs allocated to intangible assets with determinable
useful lives are $0.2 million, which are being amortized over
the remaining useful lives of the assets, and include customer
relationships, websites and non-compete agreements (approximate
two -year weighted-average useful life). ese areas are subject to
change within the measurement period (up to one year from the
acquisition date) as valuations are nalized. When the valuations
are nalized, any changes to the preliminary valuation of assets
acquired or liabilities assumed may result in adjustments to
separately identi able intangible assets and goodwill.
MF Metals Team
On November25, 2011, INTL FCStone (Europe) Ltd, the
Company’s wholly owned subsidiary in the United Kingdom
(“UK”), arranged with the administrator of MF Global’s UK
operations to acquire certain assets of the Metals Division of
MF Global UK Limited (in special administration). As part
of the arrangement, the Company received an assignment of
customer accounts and customer account documentation.
Additionally, as part of the transaction, the Company hired
more than 50 professionals from MF Global’s metals trading
business based in London. is business serves institutional
investors and nancial services rms in the Americas, Europe
and the Asia-Paci c region. e Company has allocated equity
capital to integrate these brokers and their customers into the
Company’s operations, through a combination of increased
regulatory capital to support the accounts of these customers
and increased compensation and related personnel costs for the
brokers. e amount of the required capital depends upon the
activity in and balances of the customer accounts.
e purchase price of the acquisition of certain assets from
MF Global was $1.0 million. There was no contingent
consideration associated with this transaction. e allocation
of the purchase price to separately identi able intangible assets is
preliminary in nature, and is subject to adjustment as additional
information is obtained. e intangible assets recognized in this
transaction were assigned to the C&RM segment. Purchase costs
allocated to intangible assets with determinable useful lives are
$0.5 million, which are being amortized over the remaining
useful lives of the assets, and include customer relationships
(approximate three -year weighted-average useful life).
TRX Futures Limited
On April30, 2012, the Company’s wholly-owned subsidiary
in the UK, INTL Holding (UK) Limited, acquired 100% of
the outstanding shares of TRX Futures Limited (“TRX”) from
Neumann Gruppe GmbH. TRX is a London-based niche clearing
rm for commercial co ee and cocoa customers, as well as energy
and nancial products. e purchase price was equal to the tangible
net asset value of TRX, which was approximately $12.9 million.
ere are no additional payments remaining for this acquisition.
e valuation of certain assets and liabilities is preliminary in
nature, and is subject to adjustment as additional information is
obtained, including but not limited to the valuation of separately
identi able intangible assets, if applicable. e goodwill recognized
in this transaction was assigned to the C&RM segment. Purchase
costs allocated to goodwill of $0.3 million was calculated as the
excess of the fair value of the consideration transferred over the fair
value of the identi ed net assets acquired and liabilities assumed,
and is expected to be deductible for tax purposes. ese areas are
subject to change within the measurement period (up to one year
from the acquisition date) as valuations are nalized. When the
valuations are nalized, any changes to the preliminary valuation
of assets acquired or liabilities assumed may result in adjustments
to separately identi able intangible assets and goodwill.