eTrade 2002 Annual Report Download - page 117

Table of Contents
Index to Financial Statements
Fiscal 2002 Acquisitions
Ganis Credit Corporation
On December 23, 2002, the Company acquired 100% of the issued and outstanding capital stock of Ganis Credit Corporation (“Ganis”), a
wholly-owned subsidiary of Deutsche Bank AG, a direct to consumer recreational vehicle, marine and other consumer loan originator. The
Company acquired Ganis for an aggregate purchase price of $1,890.3 million consisting of $56.2 million of cash and the assumption of
$1,834.1 million of debt. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of
acquisition (in thousands):
Carrying Value Fair Value Adjustments and
Other Fair Value
Loans receivable, net $ 1,825,706 $ 37,556 $ 1,863,262
Fixed assets 11,057 1,478 12,535
Equity investments 953 (3 ) 950
Accrued interest receivable 6,379 — 6,379
Servicing asset 6,443 4,957 11,400
Repossessed assets — 3,634 3,634
Other assets 27,950 (7 ) 27,943
Pre-acquisition goodwill 30,721 (30,721 ) —
Distribution and brand intangibles(1) — 6,900 6,900
Borrowings(2) (1,834,122 ) 1,834,122 —
Other liabilities (52,463 ) (24,210 )(3) (76,673 )
$ 22,624 $ 1,833,706 1,856,330
Purchase price 1,890,321
Excess cost over fair value of net asset acquired (goodwill) $ 33,991
(1) Estimated remaining life is nine years.
(2) This debt was to the seller and $1,797.9 million was retired concurrently with the initial settlement. The remaining balance, included in
other liabilities, will be retired as part of the final settlement with the seller.
(3) Includes cost of acquisition.
The Ganis acquisition was accounted for under purchase accounting, accordingly the purchase price was allocated to the assets acquired and
liabilities assumed in the transaction based on estimates of fair value at the date of purchase. The Company has engaged an independent
valuation firm to assist in the allocation which is still in the process of finalizing their report. In addition, the Company has not finalized its
determination of the amount of certain Ganis liabilities that existed at the date of acquisition. The Company anticipates finalizing these amounts
in fiscal 2003.
Merger and integration costs associated with the Ganis acquisition were $1.9 million for fiscal 2002, including severance for terminated Ganis
employees and conversion and consolidation costs, as well as transition expenses for duplicate personnel, facilities and computer systems
during the integration period.
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