Business Combination

On June 1, 2017, the Company completed the acquisition of RidgeWorth (the "Acquisition" or the "Acquired Business"), a multi-boutique asset manager with approximately $40.1 billion in assets under management, including $35.7 billion in long term assets under management and $4.4 billion in liquidity strategies. The Acquisition significantly increased assets under management, and provided a wider range of strategies for institutional and individual investors, and broader distribution and client service resources.

The total purchase price of the Acquisition was $547.1 million, comprising $485.2 million for the business and $61.9 million for certain balance sheet investments. At the closing, the Company paid $471.4 million in cash, issued 213,669 shares of the Company's common stock with a value of $21.7 million based on a stock price of $101.76, and recorded $51.7 million in contingent consideration and $2.3 million in deferred cash consideration. The conditions for the $51.7 million of contingent consideration were met as of September 30, 2017, and the Company expects to pay this amount during the fourth quarter of 2017.

The Company accounted for the acquisition in accordance with ASC 805, Business Combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the Acquisition.

Given the timing of this transaction and complexity of the purchase accounting, the Company's estimate of the fair value adjustment specific to the acquired intangible assets and final tax positions is preliminary. The Company intends to finalize the accounting for these items as soon as reasonably possible. The Company may adjust the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the closing date as it obtains more information as to facts and circumstances existing as of the acquisition date. During the quarter ended September 30, 2017, the Company recorded a measurement period adjustment of $1.0 million to increase deferred tax assets with a corresponding reduction to goodwill as a result of the finalization of certain tax analyses.

The excess purchase price over the estimated fair values of assets acquired and liabilities and non-controlling interests assumed of $163.4 million was recorded as goodwill. It is anticipated that this full amount will be tax deductible when the additional $51.7 million of contingent consideration is settled. In addition, $6.4 million in acquisition costs will be included as goodwill for taxes and deducted over 15 years.

The following table summarizes the initial estimate of amounts of identified acquired assets and liabilities assumed as of the acquisition date:



	June 1, 2017
($ in thousands)
Assets:
Cash and cash equivalents	$	39,343
Investments	5,516
Accounts receivable	19,941
Assets of consolidated investment products ("CIP")
Cash and cash equivalents of CIP	38,261
Investments of CIP	902,493
Other assets of CIP	21,158
Furniture, equipment and leasehold improvements	5,505
Intangible assets	275,700
Goodwill	163,365
Deferred taxes, net	6,590
Other assets	3,003
Total Assets	1,480,875
Liabilities
Accrued compensation and benefits	18,263
Accounts payable and accrued liabilities	11,938
Other liabilities	2,601
Liabilities of consolidated investment products ("CIP")
Notes payable of CIP	770,160
Securities purchased payable and other liabilities of CIP	115,100
Noncontrolling Interests of CIP	15,731
Total Liabilities & Noncontrolling Interests	933,793
Total Net Assets Acquired	$	547,082

Identifiable Intangible Assets Acquired

In connection with the allocation of the purchase price, we identified the following intangible assets:



	June 1, 2017
	Approximate Fair Value		Weighted Average of Useful Life
($ in thousands)
Definite-lived intangible assets:
Mutual fund investment contracts	$	189,200	16.0 years
Institutional and retail separate account investment contracts	77,000		10.4 years
Trademarks/Trade names	800		10.0 years
Total finite-lived intangible assets	267,000
Indefinite-lived intangible assets:
Trade names	8,700		N/A
Total identifiable intangible assets	$	275,700

Acquired Business

For the three and nine months ended September 30, 2017, the Company incurred $4.9 million and $22.9 million in transaction and integration costs associated with the acquisition comprised of $1.5 million and $10.1 million in severance and restructuring charges, $1.2 million and $8.5 million of other operating expenses, and $2.2 million and $4.3 million in employment expenses, respectively.

Income of the Acquired Business subsequent to the effective closing date of the Acquisition of June 1, 2017, for the quarter and four months ended September 30, 2017, was as follows:



	Three Months Ended		Four Months Ended
	September 30, 2017		September 30, 2017
($ in thousands)
Total Revenues	$	32,478	$	44,014
Restructuring and severance	$	1,453	$	9,849
All other operating expenses	$	23,685	$	32,249
Operating Income (Loss)	$	1,648	$	(3,776	)
Income (Loss) Before Income Taxes	$	5,446	$	48

The following Unaudited Pro Forma Condensed Consolidated Results of Operations are provided for illustrative purposes only and assume that the acquisition occurred on January 1, 2016. The unaudited pro forma information also reflects adjustment for transaction and integration expenses as if the transaction had been consummated on January 1, 2016. This unaudited information should not be relied upon as being indicative of historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future.



	Three Months Ended September 30,			Nine Months Ended September 30,
		2016		2017		2016
($ in thousands, except per share amounts)
Total Revenues		$	118,010	$	361,070	$	349,091
Net Income Attributable to Common Stockholders		$	13,696	$	29,975	$	19,759

Basic EPS		$	1.74	$	3.42	$	2.39
Diluted EPS		$	1.70	$	3.31	$	2.34