INTL FCStone 2014 Annual Report Download - page 115

INTL FCSTONE INC.  Form 10K 99
PART II
ITEM 8 Financial Statements and Supplementary Data
e consideration to be paid for the acquisition consists of
contingent payments based on the pre-tax earnings of the
business for the twelve month period following the acquisition
and is estimated to be $0.5 million as of September 30, 2014.
e purchase price for the acquisition is not material to the
consolidated financial statements. e allocation of the purchase
price to separately identifiable intangible assets is preliminary in
nature, and is subject to adjustment as additional information
is obtained, including but not limited to the calculation of the
contingent consideration and valuation of separately identifiable
intangible assets. ese calculations and valuations of any identified
intangible assets are subject to change within the measurement
period (up to one year from the acquisition date) as valuations
are finalized. When the valuations are finalized, any changes
may result in adjustments to separately identifiable intangible
assets and goodwill. Any adjustments made to the valuations are
not expected to be material. e intangible assets recognized in
this transaction of $0.5 million were assigned to the Clearing
and Execution Services segment and are being amortized over
a 12 month useful life.
Acquisitions in Fiscal 2013
e Company’s consolidated financial 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 $3.3 million as of September 30, 2014.
Tradewire
In December 2012, the Company acquired certain institutional
accounts from Tradewire Securities, LLC (“Tradewire Securities”), a
Miami-based securities broker-dealer servicing customers throughout
Latin America and a wholly owned subsidiary of Tradewire Group
Ltd. ese accounts were transferred to INTL FCStone Inc.’s
broker-dealer subsidiary, INTL FCStone Securities. As part of the
transaction, the Company hired more than 20 professional staff
from Tradewire Securities’ securities broker-dealer business based
in Miami, Florida. ese professionals provide global brokerage
services to a wide range of customers, including hedge funds,
pension funds, broker-dealers and banks located in Latin America,
the Caribbean, North America and Europe.
e consideration to be paid for the acquisition of institutional
accounts from Tradewire Securities consists of three annual
contingent payments and a final contingent payment and the
original estimated present value was estimated to be $5.6 million
as of the acquisition date. e purchase price for the acquisition
is not expected to be material to the consolidated financial
statements. e present value of the estimated total purchase
price, including contingent consideration, is $3.3 million (see
Note 11). e Company obtained a third-party valuation of
the intangible assets and contingent liabilities, and allocated
the purchase costs among identified intangible assets with
determinable useful lives and goodwill. e goodwill and
intangible asset recognized in this transaction of $2.8 million
and $2.8 million, respectively, were assigned to the Securities
segment. e intangible asset is being amortized over a 10 year
useful life.
Disposals in Fiscal 2013
Gletir Agente De Valores S.A.
On February 28, 2013, the Company, through its subsidiaries
INTL Netherlands B.V. and Gainvest Asset Management Ltda,
entered into an agreement to sell all of its ownership interest in
another subsidiary, Gletir Agente De Valores S.A. (“Gletir Agente”),
to Gletir Financial Corp (the “Purchaser”). e Company sold
the capital stock of Gletir Agente for $0.8 million. Gletir Agente
had net assets of $0.6 million, which included $0.1 million of
AOCI related to foreign currency translation, included in the
consolidated balance sheet of the Company, at the time of the sale.
e gain resulting from the sale price less the carrying amount of
the net assets and the gain from the AOCI balance were recorded
as components of other income on the consolidated income
statement for the fiscal year ended ended September 30, 2013.
Acquisitions in Fiscal 2012
During fiscal 2012, the Company acquired three businesses (Coffee
Network, TRX Futures Limited and Aporte DTVM) and certain
assets of the Metals Division of MF Global UK Limited, which
were not considered significant on an individual or aggregate
basis. e Company’s consolidated financial statements include
the operating results of the acquired businesses from the dates
of acquisition.
ese acquisitions resulted in the recognition of goodwill and
intangible assets that is expected to be deductible for tax purposes
of $0.7 million.
Coffee Network
In November 2011, the Company entered into an agreement to
acquire 100% of the ownership interests in Coffee Network LLC
(“Coffee Network”), an online news and analysis portal for the
global coffee industry. Coffee 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 coffee 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 Coffee Network acquisition consists
of an initial payment of $0.2 million, three additional annual
contingent payments and a final contingent payment. e present
value of the estimated total purchase price, including contingent
consideration, is less than $0.3 million. e intangible assets
recognized in this transaction were assigned to the Commercial