ADP 2012 Annual Report Download - page 58

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NOTE 3. ACQUISITIONS
Assets acquired and liabilities assumed in business combinations were recorded on the Company’s Consolidated Balance Sheets as of the
respective acquisition dates based upon their estimated fair values at such dates. The results of operations of businesses acquired by the
Company have been included in the Statements of Consolidated Earnings since their respective dates of acquisition. The excess of the purchase
price over the estimated fair values of the underlying assets acquired and liabilities assumed was allocated to goodwill. In certain
circumstances, the allocations of the excess purchase price are based upon preliminary estimates and assumptions and subject to revision when
the Company receives final information, including appraisals and other analyses. Accordingly, the measurement period for such purchase price
allocations will end when the information, or the facts and circumstances, becomes available, but will not exceed twelve months.
The Company acquired seven businesses in fiscal 2012 for an aggregate purchase price of approximately $301.0 million, net of cash acquired.
In addition to the cash consideration related to acquisitions closed during fiscal 2012, the Company accrued certain liabilities, which represent
the estimated fair value of contingent consideration (“earn-out”) expected to be payable in the event that certain specific performance metrics
are achieved over the earn-out period. At June 30, 2012, the Company had not yet finalized the purchase price allocation for these seven
acquisitions. These acquisitions resulted in approximately $182.4 million of goodwill. Intangible assets acquired, which total approximately
$90.0 million for these seven acquisitions, included customer contracts and lists, software and trademarks that are being amortized over a
weighted average life of approximately 11 years.
On August 16, 2010, the Company acquired 100% of the outstanding shares of Cobalt, a leading provider of digital marketing solutions for the
auto industry that aligns with Dealer Services’ global layered applications strategy and strongly supports Dealer Services’ long-term growth
strategy, for approximately $405.4 million in cash, net of cash acquired.
The final purchase price allocation for Cobalt was as follows:
The Company determined the purchase price allocations for this acquisition based on estimates of the fair value of tangible and intangible
assets acquired and liabilities assumed, utilizing recognized valuation techniques, including the income and market approaches. Goodwill for
Cobalt, which is not deductible for tax purposes, resulted from the expected impact to Dealer Services’ long-term growth strategy. Intangible
assets for Cobalt, which totaled $111.6 million, included customer contracts and lists, software and trademarks that are being amortized over a
weighted average life of approximately 11 years. There is no contingent consideration relating to the Cobalt acquisition.
52
Accounts receivable, net
$
42.5
Goodwill
293.5
Identifiable intangible assets
111.6
Other assets
37.5
Total assets acquired $
485.1
Total liabilities acquired $
58.0