Acquisitions

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements [Abstract]

Acquisitions

Note 6 – Acquisitions

We account for acquisitions as business combinations using the acquisition method. Under the acquisition method of accounting, assets acquired and liabilities assumed from these operations are recorded at fair value on the date of acquisition. The consolidated statements of income include the results of operations for each acquired entity from the date of acquisition.

We acquired 100% of the capital stock of Brazil-based RedeTransacoesEletronicas Ltda. (RedeTrel) on January 31, 2013. The purchase price was $27.7 million. On the acquisition date, RedeTrel had $10 million of cash and cash equivalents that it uses as working capital, resulting in a net cash outflow in our consolidated statement of cash flows of $16 million related to the acquisition. RedeTrel distributes electronic prepaid products, including mobile phone airtime, via a network of approximately 20,000 retail locations across Brazil. RedeTrel's strong distribution network supplements Brink's existing payments business, ePago, which has operations in Brazil, Mexico, Colombia and Panama.

We estimated fair values for the assets purchased and liabilities assumed as of the date of the acquisition. This valuation required management to make significant estimates and assumptions. We have completed the valuation work required to allocate the purchase price and our final estimates of the acquisition-date fair values of RedeTrel assets and liabilities are shown in the following table.

		Estimated Fair
		Value at
(In millions)		January 31, 2013
Fair value of purchase consideration
Cash paid for 100% of shares	$		25.9
Fair value of contingent consideration			1.8
Fair value of purchase consideration	$		27.7
Fair value of net assets acquired
Cash	$		10.0
Accounts receivable			7.8
Other current assets			19.9
Property and equipment			4.0
Intangible assets(a)			11.8
Goodwill(b)			14.0
Current liabilities			(38.8)
Noncurrent liabilities			(1.0)
Fair value of net assets acquired	$		27.7

• Intangible assets are primarily comprised of agent relationships and contractual agreements with the major Brazilian telecommunications companies. As of the acquisition date, the weighted-average amortization period for these intangible assets was 10.9 years.
• Consists of intangible assets that do not qualify for separate recognition, combined with synergies expected from integrating RedeTrel's distribution network into our existing ePago business. All of the goodwill has been assigned to the Latin America reporting unit and is expected to be deductible for tax purposes.