Business Acquisition

On December 1, 2014, the Company acquired 100% of the capital stock of GAB Robins Holdings UK Limited ("GAB Robins"), a U.K. based international loss adjusting and claims management provider, for cash consideration of $71,812,000. Because the financial results of certain of the Company's international subsidiaries, including those in the U.K. through which GAB Robins reports, are included in the Company's consolidated financial statements on a two-month delayed basis, the results of operations of GAB Robins, and the preliminary application of purchase accounting to the assets acquired, and liabilities and noncontrolling interest assumed, in that acquisition have been reflected in the Company's unaudited condensed consolidated results for the three months and six months ended June 30, 2015. As a result, comparability to prior periods' results and financial condition may be limited. The purchase was accounted for under the guidance of Accounting Standards Codification ("ASC") 805-10 as a business combination under the acquisition method. For the three months and six months ended June 30, 2015, GAB Robins contribution to the Company's earnings and earnings per share were not material to the unaudited condensed consolidated financial statements and as such, no pro forma information is required to be presented.

As a requirement of accounting under the acquisition method, all identifiable assets acquired and liabilities assumed were recognized using fair value measurement. Based upon the timing of the acquisition, the allocation of the purchase price is preliminary and subject to change, as the Company gathers additional information related to, among other things, unbilled accounts receivable, intangible assets, deferred taxes, other assets, accrued liabilities, noncontrolling interests, and uncertain tax positions. The purchase price allocation may also be impacted by net debt and net working capital adjustments under the terms of the acquisition agreement. During the measurement period since the acquisition, adjustments have been made to the preliminary purchase accounting for receivables, prepaid and other current assets acquired, and other current liabilities assumed based on additional information gathered. These measurement period adjustments did not affect amounts recorded to the income statement during the first quarter of 2015. The purchase price included $6,329,000 placed in escrow for up to two years related to certain acquired contingencies and working capital adjustments per the terms of the acquisition agreement. As of June 30, 2015, $1,600,000 of the previously escrowed amount has been released. The acquisition was funded primarily through borrowings in the U.K. under the Company's credit facility.

The following table summarizes the preliminary purchase price allocation to the tangible and intangible assets acquired and liabilities assumed in the GAB Robins acquisition included in the Company's condensed consolidated financial statements on the two-month delayed basis as discussed above:



(in thousands)	Opening Balance Sheet

Assets
Cash and cash equivalents	$	5,735
Accounts receivable	19,182
Unbilled revenues, at estimated billable amounts	7,169
Prepaid expenses and other current assets	7,443
Property and equipment	4,083
Goodwill	14,119
Intangible assets	40,535
Other noncurrent assets	1,933
Deferred income tax assets	4,833
Total Assets	$	105,032

Liabilities
Other current liabilities	$	22,714
Noncurrent liabilities	4,580
Total Liabilities	27,294
Net Assets Acquired, Before Noncontrolling Interests	77,738
Noncontrolling interests	5,926
Net Assets Acquired, Net of Noncontrolling Interests	$	71,812

Intangible assets acquired include customer relationships, trademarks, internally developed software and non-compete agreements. The intangibles acquired are made up largely of customer relationships of $38,210,000 being amortized over a preliminary estimated life of 18 years, and the remaining assets listed above are being amortized over periods ranging from two to five years. For the three months and six months ended June 30, 2015, the Company recognized amortization expense of $749,000 and $1,259,000, respectively, in its unaudited condensed consolidated financial statements related to these intangibles. Goodwill is attributable to the synergies of the work force in place and business resources as a result of the combination of the companies. The Company does not expect that goodwill attributable to the acquisition will be deductible for tax purposes. For the three months and six months ended June 30, 2015, GAB Robins accounted for $21,820,000 and $38,095,000 of the Company's consolidated revenues before reimbursements, respectively. The results of GAB Robins are reported in the EMEA/AP segment.