On November 1, 2020, the Company acquired 100% of HBA Group in Australia, including 100% of the equity interest in each of HBA Group’s entities HBA Legal, Pillion and Paratus. HBA Legal is a legal services provider that will complement the Company’s Crawford TPA Solutions segment in Australia. The purchase price included an initial cash payment of $4,026,000, net of working capital adjustment, and a maximum $3,200,000 payable in cash over the next four years based on achieving certain revenue and EBITDA performance goals as set forth in the purchase agreement. The acquisition was funded primarily through additional borrowings under the Company’s credit facility.

The financial results of certain of the Company’s international subsidiaries, including HBA Group, are included in the Company’s consolidated financial statements on a two-month delayed basis. Accordingly, the acquisition of HBA was reported as of January 1, 2021.

This acquisition was accounted for under the guidance of ASC 805-10, as a business combination under the acquisition method. As a result of the acquisition, the Company recognized net liabilities of ($880,000), definite-lived customer relationships of $1,574,000, and goodwill of $5,645,000. The customer relationships are amortized over an estimated life of 9 years. Goodwill is attributable to the assembled workforce acquired, and expected revenue and cost synergies 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.

The preliminary acquisition accounting is based on the fair value of assets acquired and liabilities assumed as of the acquisition date, based on the preliminary valuation. Significant assumptions and estimates included, but were not limited to future expected cash flows, including projected revenues and expenses, projected customer attrition rates, and the applicable discount rates. These assumptions and estimates were level 3 inputs and based on assumptions that the Company believes to be reasonable. However, actual results may differ from these estimates.

The Company is in the process of reviewing the fair value of the assets acquired and liabilities assumed, including, but not limited to accounts receivable, unbilled revenue, accrued expenses, deferred revenue, tax liabilities and goodwill. As additional information becomes available, the Company may further revise its preliminary acquisition accounting during the remainder of the measurement period, which will not exceed 12 months from the date of acquisition. The Company may update certain assumptions and inputs to incorporate additional information obtained subsequent to the closing of the transaction related to facts and circumstances that existed as of the acquisition date. There was no revision to the preliminary acquisition accounting during the three months ended June 30, 2021. The preliminary valuation of the assets acquired and liabilities assumed for HBA Group as of June 30, 2021 is as follows:


(in thousands)	Opening Balance Sheet, Adjusted as of June 30, 2021

Assets
Cash and cash equivalents	$	240
Accounts receivable, net		1,081
Unbilled revenue, at estimated billable amounts		598
Other current assets		87
Operating lease right-of-use assets, net		1,502
Property and equipment, net		118
Customer relationships		1,574
Goodwill		5,645
Total Assets		10,845

Liabilities
Accounts payable		501
Accrued expenses		1,116
Deferred revenue		659
Tax liabilities		472
Operating lease liability		1,502
Other liabilities		256
Total Liabilities		4,506
Net Assets Acquired	$	6,339

During the three months ended June 30, 2020, the Company recognized a pretax loss on disposal totaling $341,000 related to the disposal of a business in its Crawford Platform Solutions reporting unit.