During the year ended December 31, 2019, we completed 39 acquisitions (the “2019 Acquisitions”) for an aggregate purchase price of $504 million, net of $12 million of cash acquired, using available cash on hand and borrowings under our then existing revolving credit facility. Of these, 36 were accounted for as business combinations and three as asset acquisitions. We also made minority investments in eight pest control companies for a total of $18 million, $9 million of which was unfunded and included in Accrued liabilities—Other on the Consolidated Statements of Financial Position as of December 31, 2019.

As a result of the 2019 Acquisitions, we recognized initial goodwill of $317 million and other intangibles of $228 million, primarily customer lists. The weighted-average useful life for each class of definite-lived intangible asset associated with these acquisitions is between three years to five years. The purchase price allocations for these acquisitions will be finalized no later than one year from the respective acquisition dates. For incomplete purchase price allocations, we are evaluating working capital balances, the intangible and tangible assets acquired, and the appropriate useful lives to assign to all assets, including intangibles. A significant portion of the purchase price has been allocated to goodwill which is attributable to anticipated synergies from future growth and is not expected to be deductible for income tax purposes.

There is also $9 million of purchase price on acquisitions completed in December 2019 that is included in Accrued liabilities—Other on the Consolidated Statements of Financial Position as of December 31, 2019 that was paid in January 2020, as well as $29 million of deferred purchase price and earnouts contingent on the successful achievement of various metrics due to certain of the sellers between one year and five years from the acquisition dates. Changes in projected metrics would result in a change in the

fair value of the recorded contingent earnout obligation. The deferred purchase price and earnouts are recorded at fair value on the Consolidated Statements of Financial Position. Subsequent changes to the estimated earnout obligations will be recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) when incurred.

Nomor

On September 6, 2019, we acquired Nomor, a leading provider of pest control services in Sweden and Norway, for approximately 2 billion Swedish krona (approximately $198 million using the September 6, 2019 exchange rate, net of approximately $9 million of cash acquired). This strategic acquisition launches our expansion into the European pest control market. We funded the acquisition using cash on hand and proceeds from a $120 million borrowing under our then-existing revolving credit facility. Nomor contributed approximately $17 million of revenue and $3 million of Adjusted EBITDA from the date of acquisition through December 31, 2019. We recognized approximately $4 million of Acquisition-related costs on the Consolidated Statements of Operations and Comprehensive Income related to our acquisition of Nomor in the year ended December 31, 2019.

The allocation of the purchase price is preliminary and will likely change in future periods, perhaps significantly, as fair value estimates of the assets acquired and liabilities assumed are refined during the measurement period. A preliminary purchase price allocation is as follows:


(In millions)
Current assets⁽¹⁾	$	11
Property and equipment		6
Goodwill		127
Identifiable intangible assets⁽²⁾		94
Current liabilities⁽³⁾		(18)
Long-term liabilities⁽⁴⁾		(22)
Total purchase price	$	198

___________________________________

(1)Primarily trade receivables and net of approximately $9 million of cash acquired.

(2)Primarily customer lists.

(3)Primarily advanced collections from customers.

(4)Includes $20 million of deferred tax liabilities recognized as a result of tax basis differences in intangible assets.

Specifically, we are still evaluating working capital balances, the intangible and tangible assets acquired, deferred revenue balances, as well as the appropriate useful lives to assign to all assets, including intangibles. A significant portion of the purchase price has been allocated to goodwill which is attributable to anticipated synergies from future growth and is not expected to be deductible for income tax purposes. We will complete the purchase price allocation no later than the third quarter of 2020.

The following unaudited pro forma consolidated financial information presents the combined operations of ServiceMaster and Nomor for the years ended December 31, 2019 and 2018, as if the acquisition had occurred at the beginning of 2018 (in millions, except per share data):


	(Unaudited)
	Year ended December 31,
(In millions, except per share data)	2019		2018
Consolidated revenue	$	2,112	$	1,950
Consolidated net income (loss)	$	137	$	(42)
Basic earnings (loss) per share	$	1.01	$	(0.31)
Diluted earnings (loss) per share	$	1.00	$	(0.31)

ASC 805, “Business Combinations,” establishes guidelines regarding the presentation of the unaudited pro forma information. Therefore, this unaudited pro forma information is not intended to represent, nor do we believe it is indicative of, the consolidated results of operations of ServiceMaster that would have been reported had the acquisition been completed at the beginning of 2018. This unaudited pro forma information does not give effect to the anticipated business and tax synergies of the acquisition and is not representative or indicative of the anticipated future consolidated results of operations of ServiceMaster.

The unaudited pro forma consolidated financial information reflects our historical financial information and the historical results of Nomor, after the conversion of Nomor’s accounting methods from local reporting standards to U.S. generally accepted accounting principles and adjusted to reflect the acquisition had it been completed as of the beginning of 2018. The most significant adjustments made to the pro forma financial information are the inclusion of $4 million of acquisition-related costs as if incurred in the first quarter of 2018, estimated quarterly interest expense of approximately $1 million related to financing obtained for the transaction and the estimated tax impact of these pro forma adjustments. The unaudited pro forma financial information includes various assumptions, including those related to the preliminary purchase price allocation, that may be impacted by the finalization of the purchase price allocation. The tax impact of these adjustments was calculated based on Nomor’s statutory rate.

During the year ended December 31, 2018, we completed 20 acquisitions (the “2018 Acquisitions”), including the acquisition of Copesan, for an aggregate purchase price of $187 million, net of $2 million of cash acquired, using available cash on hand. All acquisitions were accounted for as business combinations.

There are $65 million of deferred purchase price and earnouts contingent on the successful achievement of various metrics due to the sellers between one year and five years from the acquisition dates. Changes in projected metrics would result in a change in the fair value of the recorded earnout obligation. The deferred purchase price and earnouts are recorded at fair value on the Consolidated Statements of Financial Position. Subsequent changes to the estimated earnout obligations will be recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) when incurred.

The following sets forth the intangible assets acquired in the 2018 Acquisitions and the adjustments made to their fair values in the year ended December 31, 2019, when the purchase allocations were finalized. The weighted-average useful life for each class of definite-lived intangible asset is between three years to five years.


					Other
(In millions)	Goodwill		Trade Names⁽¹⁾		Intangible Assets⁽²⁾
Balance as of December 31, 2018	$	179	$	—	$	80
Measurement period adjustments		(2)		13		(13)
Balance as of December 31, 2019	$	177	$	13	$	67



	Year Ended December 31,
(In millions)	2019		2018		2017
Assets acquired	$	599	$	284	$	16
Liabilities assumed		(56)		(30)		—
Net assets acquired⁽¹⁾	$	542	$	254	$	16

Net cash paid	$	504	$	191	$	13
Seller financed debt		38		64		3
Purchase price	$	542	$	254	$	16