2. CHANGE IN CONTROL

In February 2014, investment funds managed by Cinven Capital Management (V) General Partner Limited (“Cinven”), a private equity firm, incorporated Scioto Holdings, Inc. in the first of multiple steps that would result in a change of control for the Company. Pursuant to the terms and conditions of the Agreement and Plan of Merger (the “Merger Agreement”) dated February 22, 2014, Scioto Holdings, Inc. (the “Successor”), through its wholly owned subsidiary Scioto Acquisition, Inc. (the “Purchaser”) and the Purchaser’s wholly owned subsidiary Scioto Merger Sub, Inc. (the “Merger Sub”), purchased 100% of the outstanding shares of Medpace Holdings, Inc. (“Predecessor”) for an aggregate purchase price of $921.3 million on April 1, 2014 (the “Transaction”). Per the terms of a Contribution and Subscription Agreement, Medpace Investors, LLC (“Medpace Investors” or “MPI”), owned by certain employees of the Company, agreed to contribute shares held in the Predecessor in exchange for a percentage stake in the Successor. The Transaction was financed through the sale of the Successor’s equity and debt financing under a new credit facility entered into by Merger Sub as the initial borrower. Upon Transaction consummation, Merger Sub ceased to exist and Medpace Holdings, Inc. became the borrower under the credit facility. The proceeds from the transaction were used to purchase Predecessor’s equity interests, extinguish debt which had immediately come due as a result of the change in control, and pay Predecessor’s acquisition-related selling expenses. The Predecessor’s acquisition-related selling expenses of $12.4 million, including $10.1 million related to success based advisory fees, are reflected in the Acquisition and integration expense line in the consolidated statement of operations for the Predecessor January 1 through March 31, 2014 period. The Successor’s acquisition-related buying expenses of $9.3 million, including $3.3 million related to success based advisory fees, are reflected in the Acquisition and integration expense line in the consolidated statement of operations for the Successor April 1, 2014 through December 31, 2014 period.

Prior to the Transaction, CCMP Capital (“CCMP”), a private equity firm, held 80% of the Predecessor’s equity interests and the noncontrolling interests were held by certain current and former members of management, along with former members of the Board of Directors of Medpace, Inc., a wholly owned subsidiary of Medpace Holdings, Inc.

The sources and uses of the purchase price consideration were as follows (in thousands):

Sources of cash consideration:
Sale of Successor common stock	$	414,000
Long-term debt issuance		530,000
Revolving loan		1,575
Original issue discount		(2,650	)
Loan origination fees		(15,487	)
Debt proceeds, net		513,438
Total sources of consideration paid	$	927,438

Uses of cash consideration:
Purchase of Predecessor common stock		780,829
Proceeds from stock option exercise		(15,221	)
Payment of Predecessor debt		143,728
Payment of Predecessor's selling expenses		11,962
Total uses of consideration paid	$	921,298

The excess cash generated from the transaction of $6.1 million is not considered purchase price consideration as the funds were used to pay a portion of the Successor’s acquisition related expenses. The Successor’s acquisition related expenses are reflected in the Acquisition and integration expense line in the consolidated statements of operations for the Successor period ended December 31, 2014.

In May 2014, Scioto Holdings, Inc. was renamed Medpace Holdings, Inc. (“Successor”). Furthermore, the Predecessor Medpace Holdings, Inc. was merged with another wholly owned subsidiary and renamed Medpace IntermediateCo, Inc. For the avoidance of doubt and for purposes of these consolidated financial statements, Successor refers to the consolidated Medpace Holdings reporting entity after the Transaction and Predecessor refers to the consolidated Medpace Holdings reporting entity prior to the Transaction.

Immediately following the Transaction, Cinven and Medpace Investors owned approximately 75% and 25%, respectively, of the Successor entity.

The following table reconciles the fair value of the assets acquired and liabilities assumed to the total purchase price (in thousands):

Assets Acquired:
Cash and cash equivalents	$	17,845
Restricted cash		1,648
Accounts receivable		39,311
Unbilled services		13,065
Reimbursable pass-through expenses		12,184
Prepaid expenses and other current assets		12,205
Property and equipment		39,661
Goodwill		670,294
Intangible assets		306,307
Deferred income taxes		26,246
Other assets		3,237
Total assets acquired		1,142,003
Liabilities assumed:
Accounts payable and accrued expenses		16,608
Pre-funded study costs		36,483
Advanced billings		52,475
Deemed landlord liability		34,251
Debt		1,551
Deferred income taxes		69,448
Other liabilities		9,889
Total liabilities assumed		220,705
Net assets acquired	$	921,298

The Company accounts for acquisitions using the acquisition method of accounting. The Successor consolidated financial statements reflect the final allocation of the aggregate purchase price of $921.3 million to the assets acquired and liabilities assumed based on fair values at the date of the Transaction. The fair values assigned to identifiable intangible assets acquired were determined primarily by using an income approach which was based on assumptions and estimates made by management. Significant assumptions utilized in the income approach were based on company-specific information and projections, which are not observable in the market and are thus considered Level 3 measurements by authoritative guidance. The excess of the purchase price over the fair value of the assets acquired and liabilities assumed has been recorded as goodwill and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized such as assembled workforce and growth opportunities.

The Merger Agreement includes certain indemnifications between the sellers (led by CCMP) and the buyers (led by Cinven) with regard to Predecessor contingencies that arise after the Transaction and through April 1, 2015, as well as tax payments or refunds that are finalized after April 1, 2014 but which relate to periods prior to the Transaction. In December 2016, final settlement of these indemnifications was agreed upon resulting in a gain of $0.5 million within Miscellaneous (expense) income in the Successor year ended December 31, 2016. The Successor had $0.0 million and $0.3 million in Prepaid expenses and other current assets and $0.0 million and $0.5 million in Other assets on the consolidated balance sheets at December 31, 2016 and 2015, respectively, associated with refunds due from various taxing authorities that were generated in a Predecessor period. The Successor had less than $0.1 million and $1.4 million in Other current liabilities and $0.0 million and $0.5 million in Other long-term liabilities on the consolidated balance sheets at December 31, 2016 and 2015, associated with the agreed settlement of these items, net of consulting fees and related tax, and other tax refunds received by the Successor prior to December 31, 2016 and 2015, respectively. The remaining liabilities are expected to be fully paid to the Predecessor in the first quarter of 2017.

Immediately prior to the Transaction, the Predecessor’s Board of Directors approved a plan to accelerate the vesting on unvested stock options and restricted share awards.