Significant Business Acquisitions

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Business Combination Disclosure

Significant Business Acquisitions

Acquisition of Kaufman Rossin Fund Services LLC

On February 24, 2016, we acquired all of the membership interests of Kaufman Rossin Fund Services LLC (“KRFS”) for $94.7 million in cash, after giving effect to a $0.3 million adjustment agreed upon in June 2016 to settle working capital under the provisions of the purchase agreement. DST financed the acquisition through cash-on-hand and available lines of credit. KRFS is a full-service provider of specialized hedge fund administration services to the global financial community. KRFS’ hedge fund services include accounting and valuation, back-office outsourcing, investor services, treasury services and customized reporting. We expect the acquisition to provide us with additional opportunities within the alternative investment marketplace and to expand our asset administration service offerings. KRFS is included within the Financial Services segment.

The factors described above, combined with the synergies expected from combining our operations with the acquired entity and the resulting expansion of the service offerings available to our clients, are the basis for the acquisition price paid resulting in $61.0 million of goodwill recorded, all of which is expected to be deductible for tax purposes.

The transaction was accounted for using the acquisition method of accounting, and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date.

The following table summarizes the aggregate acquisition-date fair value of the consideration transferred for the acquisition of KRFS and the amounts recognized as of the acquisition date for the assets acquired and liabilities assumed (in millions):

Consideration
Cash paid	$	94.7
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	$	1.0
Accounts receivable	2.9
Other current assets	0.1
Investments	0.5
Properties (1)	6.8
Intangible assets	23.4
Goodwill	61.0
Total assets	95.7
Deferred revenue	0.6
Other current liabilities	0.4
Total liabilities	1.0
Net assets acquired	$	94.7

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(1) Includes $6.5 million of acquired software with a weighted-average useful life of 6 years.

The following table summarizes the intangible assets acquired and estimated weighted-average useful lives as of the acquisition date (in millions):

	Fair Value		Weighted-Average Useful Life
Customer relationships	$	22.5	10 years
Other	0.9		3 years
	$	23.4

The operating results of KRFS were combined with our operating results subsequent to the acquisition date. Approximately $6.4 million and $8.7 million of revenues and $1.5 million and $2.0 million of net pretax income of the acquired business is included in the Condensed Consolidated Statement of Income for the three and six months endedJune 30, 2016, respectively. Pro-forma results of operations, assuming the acquisition was made at the beginning of the earliest period presented, have not been presented because the effect of this acquisition is not material to our results.