ACQUISITIONS

2014 Acquisitions

GBM Acquisition

On October 1, 2014, we acquired all of the outstanding stock of GBM Support Services Group Limited (“GBM”), a leading provider of facilities management services for various retail, leisure, public sector, and commercial clients throughout the United Kingdom, for a purchase price of $22.7 million, which includes $3.3 million of contingent consideration (the “GBM Acquisition”). The contingent consideration will be settled upon renewal or extension of a specified customer contract, pursuant to the terms of the purchase agreement. The operations of GBM are included in the Janitorial segment as of October 1, 2014, the acquisition date.

Airco Acquisition

On August 1, 2014, we acquired all of the outstanding stock of Airco Commercial Services Inc. (“Airco”), a provider of HVAC services, energy solutions, and building controls in commercial and industrial buildings, for a cash purchase price of $17.8 million, subject to certain post-closing adjustments (the “Airco Acquisition”). The operations of Airco are included in the Building & Energy Solutions segment as of August 1, 2014, the acquisition date.

Alpha Mechanical Acquisition

Effective March 1, 2014, we acquired certain assets and assumed certain liabilities of Alpha Mechanical, Inc. (“Alpha”) for a cash purchase price of $12.2 million (the “Alpha Acquisition”), including a $0.1 million working capital adjustment that is subject to final true up. Alpha provides specialized mechanical services in HVAC, plumbing, retrofitting, and controls in commercial and industrial buildings. The operations of Alpha are included in the Building & Energy Solutions segment as of March 1, 2014.

2013 Acquisitions

BEST Acquisition

On September 1, 2013, we acquired certain assets and assumed certain liabilities of BEST Infrared Services, Inc. (“BEST”) for an aggregate purchase price of $4.9 million, which includes a contingent consideration liability (the “BEST Acquisition”). On the acquisition date, we recorded a $1.6 million liability for the fair value of the contingent consideration, which was reduced by $0.2 million in the fourth quarter of 2014 to reflect the probable achievement of the final settlement of the contingent consideration liability. The final contingent consideration liability amount will be determined at the end of the third year following the consummation date of the acquisition. This amount will be based on a pre-defined forecasted adjusted income from operations for BEST for the trailing twelve months ended August 31, 2016. The contingent consideration liability will be in the form of a cash payment and could be as high as $2.0 million upon final settlement. See Note 5, “Fair Value of Financial Instruments,” regarding the valuation of the contingent consideration liability.

The operations of BEST include a broad range of specialized commercial and industrial electrical solutions, such as inspections, system testing, power quality monitoring, hazard detection services, repairs, and ongoing predictive maintenance in commercial and industrial buildings, which are provided primarily in the southwest region of the United States. The operations of BEST are included in the Building & Energy Solutions segment as of September 1, 2013, the acquisition date.

Blackjack Acquisition

On August 1, 2013, we acquired certain assets and assumed certain liabilities of Blackjack Promotions Limited (“Blackjack”) for an aggregate cash purchase price of $5.2 million (the “Blackjack Acquisition”). Blackjack provides specialized staffing and marketing services to airport operators, retailers, and other clients in the United Kingdom and Europe. The operations of Blackjack are included in the Other segment as of August 1, 2013, the acquisition date.

Air Serv Acquisition

On November 1, 2012, we acquired all of the outstanding stock of Air Serv Corporation (“Air Serv”) for an aggregate purchase price of $162.9 million in cash (the “Air Serv Acquisition”). Approximately $11.8 million of the cash consideration remains in an escrow account to satisfy any applicable indemnification claims, pursuant to the terms of the purchase agreement. Air Serv provides facility solutions for airlines, airports, and freight companies at airports primarily in the United States. The operations of Air Serv are primarily included in the Other segment as of November 1, 2012, the acquisition date.

HHA Acquisition

On November 1, 2012, we acquired all of the outstanding stock of HHA Services, Inc. (“HHA”) for an aggregate purchase price of $33.7 million in cash (the “HHA Acquisition”). HHA provides facility solutions, including housekeeping, laundry, patient assist, plant maintenance, and food services, to hospitals, healthcare systems, long-term care facilities, and retirement communities. The operations of HHA are included in the Building & Energy Solutions segment as of November 1, 2012, the acquisition date.

Calvert-Jones Acquisition

On November 1, 2012, we acquired substantially all of the assets and assumed certain liabilities of Calvert-Jones Company, Inc. (“Calvert-Jones”) for a cash purchase price of $6.1 million (the “Calvert-Jones Acquisition”). Calvert-Jones provides mechanical and energy efficient products and solutions in the Washington, D.C. area. The operations of Calvert-Jones are included in the Building & Energy Solutions segment as of November 1, 2012, the acquisition date.

2012 Acquisition

TEGG and CurrentSAFE Acquisition

On May 1, 2012, we acquired substantially all of the assets and assumed certain liabilities of TEGG Corporation (“TEGG”) and CurrentSAFE Corporation (“CurrentSAFE”) and also acquired certain software technology from TEGG’s shareholder, for an aggregate purchase price of $5.7 million (the “TEGG Acquisition”). The acquired net assets and results from operations have been included in the Building & Energy Solutions segment since May 1, 2012, the acquisition date.

The following table summarizes the allocation of consideration transferred to acquire Air Serv, HHA, GBM, Airco, Alpha, Calvert-Jones, TEGG, Blackjack, and BEST and the amounts of identified assets acquired and liabilities assumed at the acquisition dates. For the Airco and Alpha acquisitions, the purchase price allocations are subject to working capital adjustments and other items, within their respective measurement periods, not to exceed one year from their respective acquisition dates. For the GBM acquisition, the purchase price allocation reflects preliminary amounts of net assets acquired, including other intangible assets, which are subject to adjustments within the measurement period not to exceed one year from the acquisition date.



(in millions)	Air Serv			HHA			GBM			Airco			Alpha			Calvert-Jones			TEGG			Blackjack				BEST
Purchase price:
Cash consideration	$	162.9		$	33.7		$	19.4		$	17.8		$	12.2		$	6.1		$	5.7		$	5.2			$	2.9
Fair value of contingent consideration	—			—			3.3			—			—			—			—			—				1.6
Holdback liability	—			—			—			—			—			—			—			—				0.4
Total consideration	$	162.9		$	33.7		$	22.7		$	17.8		$	12.2		$	6.1		$	5.7		$	5.2			$	4.9

Allocated to:
Trade accounts receivable⁽¹⁾	$	52.7		$	3.2		$	9.7		$	3.2		$	4.6		$	1.6		$	0.3		$	4.6		1.2	$	1.2
Other current and noncurrent assets	16.2			2.2			5.1			1.1			0.1			0.1			0.9			0.2				—
Property, plant and equipment	16.7			0.1			0.6			0.3			0.5			0.1			2.2			0.3				0.6
Other intangible assets⁽²⁾	44.6			15.0			1.7			7.1			3.3			2.6			2.2			0.9				1.4
Goodwill⁽³⁾	88.8			23.8			14.9			10.6			6.8			4.0			2.0			1.8				1.9
Total assets acquired	219.0			44.3			32.0			22.3			15.3			8.4			7.6			7.8				5.1
Liabilities assumed	(56.1		)	(10.6		)	(9.3		)	(4.5		)	(3.1		)	(2.3		)	(1.9		)	(2.6		)		(0.2		)
Net assets acquired	$	162.9		$	33.7		$	22.7		$	17.8		$	12.2		$	6.1		$	5.7		$	5.2			$	4.9

(1) Represents fair value of trade accounts receivable, which for each of the Air Serv and BEST acquisitions includes a $0.4 million adjustment to gross contractual amounts that are expected to be uncollectible. The fair values of trade accounts receivable acquired in the HHA, GBM, Airco, Alpha, Calvert-Jones, TEGG, and Blackjack acquisitions approximate their respective contractual amounts.

(2) The following table summarizes the weighted-average useful lives in years of the acquired other intangible assets, consisting primarily of customer contracts and relationships for each respective acquisition:



Air Serv	HHA	GBM	Airco	Alpha	Calvert-Jones	TEGG	Blackjack	BEST
14	13	10	12	9	12	14	11	9

(3) The total amount of goodwill that is deductible for tax purposes is $27.3 million.

The amount allocated to goodwill for Air Serv, HHA, and Blackjack is reflective of our identification of buyer-specific synergies that we anticipate will be realized by, among other things, reducing duplicative positions and back office functions and by reducing professional fees and other services. Goodwill is also attributable to expected long-term business growth through the expansion of our vertical market expertise in servicing the end-to-end needs of airlines, airport authorities, and healthcare service markets. Goodwill for the GBM, Airco, Alpha, Calvert-Jones, and BEST acquisitions is attributable to projected long-term business growth through our expansion of existing vertical and geographic market offerings. Goodwill for the TEGG acquisition is attributable to the strategic initiative to expand the scope and product range of our facility solutions franchise offerings into the electrical services solutions business, providing for further expansion of this business and enhancement of comprehensive service offerings.

Acquisition-related costs were $1.2 million during 2014 and were included in selling, general and administrative expenses in our accompanying consolidated statements of income. Pro forma and other supplemental financial information is not presented since the acquisitions made during 2014, 2013, and 2012 are not considered material business combinations individually or on a combined basis for any of those years.