ACQUISITIONS

6 Months Ended

Jun. 30, 2020

ACQUISITIONS

ACQUISITIONS

4. ACQUISITIONS

Business Acquisitions

Business acquisitions are accounted for in accordance with ASC Topic 805: Business Combinations.

The Company has incorporated contingent consideration, or earn out provisions, into the structure of its acquisitions. The Company recognizes the fair value of estimated contingent consideration at the acquisition date as part of the consideration transferred in the exchange. The contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. The purchase price associated with business acquisitions and the allocation thereof during the six months ended June 30, 2020 is as follows:

Number of business acquisitions closed		5
Consideration:
Cash due at closing	$	59,510
Working capital adjustments		(174)
Fair market value of estimated contingent consideration		6,332
Total consideration	$	65,668
Allocation of purchase price:
Total tangible assets	$	4,673
Total liabilities assumed		(12,272)
Customer relationships		39,749
Management contracts		1,194
Goodwill		32,121
Other acquired intangibles		203
Total allocated consideration	$	65,668

Management believes approximately $38,665 of tax goodwill and intangibles related to business acquisitions completed during the six months ended June 30, 2020 will be deductible for tax purposes over a 15 year period. Additional tax goodwill may be deductible when estimated contingent consideration is earned and paid.

The accompanying unaudited condensed consolidated statement of operations for six months ended June 30, 2020 includes revenue and income from operations for the two business acquisitions that are new subsidiary partner firms from the dates they were acquired of $3,867 and $886, respectively.

Asset Acquisitions

The Company also separately purchases customer relationships and other intangible assets. These purchases are accounted for as asset acquisitions as they do not qualify as business acquisitions pursuant to ASC Topic 805, Business Combinations. There were two asset acquisitions during the six months ended June 30, 2020. Total purchase consideration for asset acquisitions during the six months ended June 30, 2020 consisted of contingent consideration the amount of which will be determined when the outcome is determinable.

The weighted-average useful lives of intangible assets acquired during the six months ended June 30, 2020 through business acquisitions and asset acquisitions are as follows:

	Number of years
Management contracts	20
Customer relationships	9
Other acquired intangibles	5
Weighted-average useful life of all intangibles acquired	9

From July 1, 2020 to August 6, 2020, the Company completed one business acquisition for cash of $8,000, plus contingent consideration.