Business Combination

On April 1, 2019, we combined our Canadian operations with Evolocity Financial Group, or Evolocity, a Montreal-based online small business lender. The purpose of the transaction was to accelerate the growth of our Canadian operations and to enable us to provide a broader range of financing options to Canadian small businesses nationwide. In the transaction, Evolocity contributed its business to a holding company, and we contributed our Canadian business plus cash to that holding company such that we own a 58.5% majority interest in the holding company. The remainder is owned by former Evolocity stockholders. We have accounted for this transaction as a business combination.

The transaction has a preliminary purchase price for accounting purposes of approximately $16.7 million. Our provisional valuation of the assets acquired and liabilities assumed, including but not limited to loans, intangible assets and goodwill, is preliminary and the fair values are subject to change within the measurement period of up to one year from the business combination date. During the three and nine months ended September 30, 2019, we recorded measurement period adjustments which resulted in an increase of $0.7 million to goodwill. Goodwill arising from the business combination is not amortized, but is subject to impairment testing at least annually or more frequently if there is an indicator of impairment.

The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the business combination (in thousands):



	Fair Value
Loans and finance receivables	$	36,763
Intangibles and other assets ⁽¹⁾	2,810
Debt and other liabilities	(34,437		)
Goodwill ⁽¹⁾	11,585
Net assets acquired	$	16,721

⁽¹⁾Goodwill, and Intangibles and other assets were included in Other Assets on the Consolidated Balance Sheet as of September 30, 2019.

We consolidate the financial position and results of operations of the holding company.

As part of this business combination, the noncontrolling interest was deemed to be a redeemable noncontrolling interest. These interests are classified as mezzanine equity and measured at the greater of fair value at the end of each reporting period or the historical cost basis of the noncontrolling interest adjusted for cumulative earnings allocations.