Acquisitions | Acquisitions 2017 Acquisitions On December 29, 2017, the Company acquired 100 percent of the stock of PowerAdvocate, Inc. ("PowerAdvocate"), a provider of market, cost intelligence, and supply chain solutions serving the energy sector, for a net cash purchase price of $200.4 million , of which $10.0 million represents indemnity escrows. Within the Decision Analytics segment, PowerAdvocate expands the Company's offerings to the energy sector by adding proprietary spend data and cost models and providing insight into customers' cost savings opportunities. The preliminary purchase price allocation of the acquisition is presented in the table below. On December 22, 2017, the Company acquired 100 percent of the asset of Service Software, LLC. ("Service Software"), a provider of business management software for the construction industry, for a net cash purchase price of $6.8 million , of which $0.5 million represents indemnity escrows. Within the Decision Analytics segment, Service Software expands the Company's offerings to the insurance sector by integrating with the existing loss quantification solutions, which makes it possible for restoration professionals to save time by sharing job information, reducing duplicate data entry, and increasing productivity. The preliminary purchase price allocation of the acquisition is presented as part of "Others" in the table below. On November 9, 2017, the Company acquired 100 percent of the stock of Rebmark Legal Solutions Ltd. ("Rebmark"), a provider of injury claims solutions, for a net cash purchase price of $2.5 million , of which $0.2 million represents indemnity escrows. Rebmark has become part of the insurance vertical within the Decision Analytics segment. Rebmark’s solutions aid claimant and defendant lawyers, barristers, and claims handlers with the preparation of schedules of loss, which is useful in complex, high-value injury claims where calculations can be time-consuming and there is greater potential for error. The preliminary purchase price allocation of the acquisition is presented as part of "Others" in the table below. On August 31, 2017, the Company acquired 100 percent of the stock of Lundquist Consulting, Inc. ("LCI"), a provider of risk insight, prediction, and management solutions for banks and creditors, for a net cash purchase price of $150.6 million , of which $12.8 million represents indemnity escrows. LCI has become part of the financial services vertical within the Decision Analytics segment. This acquisition brings together the Company's proprietary data assets and LCI's proprietary time-series data, including consumer and commercial bankruptcies, consumer behavior, and legal and technical terms associated with debtor settlements. The preliminary purchase price allocation of the acquisition is presented in the table below. On August 23, 2017, the Company acquired 100 percent of the stock of Sequel Business Solutions Ltd. ("Sequel"), a provider of commercial and specialty insurance and reinsurance software based in the U.K., for a net cash purchase price of $320.3 million . Sequel has become part of the insurance vertical within the Decision Analytics segment. The acquisition of Sequel further enhances the Company's comprehensive offerings to the global complex commercial and specialty insurance industry, enabling integrated global data analytics through a specialized end-to-end workflow solution. The preliminary purchase price allocation of the acquisition is presented in the table below. On August 3, 2017, the Company acquired 100 percent of the stock of G2 Web Services, LLC ("G2"), a provider of merchant risk intelligence solutions for acquirers, commercial banks, and other payment system providers, for a net cash purchase price of $112.0 million , of which $5.6 million represents indemnity escrows. G2 has become part of the financial services vertical within the Decision Analytics segment. The acquisition of G2 positions the Company to further enhance its offerings to clients and partners, by providing solutions that help fight fraud, transaction laundering, and reputational risk within the global payments and e-commerce ecosystem. The preliminary purchase price allocation of the acquisition is presented in the table below. During the three months ended June 30, 2017, the Company acquired the net assets of Blue Skies Consulting, LLC, ControlCam, LLC, Krawietz Aerial Photography, LLC, Richard Crouse & Associates, Inc., Rocky Mountain Aerial Surveys, Inc., Skyview Aerial Photo, Inc., and Valley Air Photos, LLC (collectively referred to as "Aerial Imagery acquisitions"), a group of similar but unrelated companies, which gives the Company broad geographic coverage of the United States for aerial image capture purposes. The Aerial Imagery acquisitions provide multi-spectral aerial photographic services with expertise in offering digital photogrammetric and remote sensing data for mapping and surveying applications. The purchase consideration consists of an aggregate net cash purchase price of $28.1 million and a holdback of $3.1 million . Within the Company's Decision Analytics segment, the Aerial Imagery acquisitions enable the Company to enhance and maintain its database of images with the required frequency, resolution, and coverage across the United States ("U.S.") to support the Company's objective as the leading provider of loss quantification data, analytics, and decision-support solutions to the insurance industry, and the photogrammetry, surveying, mapping and other related markets. The preliminary purchase price allocation of the acquisition is presented as part of "Others" in the table below. On May 19, 2017, the Comp any acquired 100 percent of the stock o f MAKE Consulting A/S ("MAKE"), a research and advisory business specializing in wind power, for a net cash purchase price of $16.9 million , of which $2.7 million represents indemnity escrows. MAKE has become part of the energy and specialized markets vertical within the Decision Analytics segment. MAKE enhances the Company's offering to existing customers and forms a market analysis and advisory consortium on renewables and the transformation of the global electricity industry. With detailed coverage of power market fundamentals, solar, wind, energy storage, and grid edge technologies, the energy and specialized markets vertical is positioned to bring customers market analysis and insight on the evolution of the energy landscape and provide a comprehensive platform for the future. The preliminary purchase price allocation of the acquisition is presented in the table below. On March 31, 2017, the Company acquired 100 percent of the stock of Fintellix Solutions Private Limited ("Fintellix"), a Bangalore-based data solutions company specializing in the development of data management platforms and regulatory reporting solutions for financial institutions, for a net cash purchase price of $16.9 million , of which $1.8 million represents indemnity escrows. Fintellix has become part of the financial services vertical within the Decision Analytics segment. The acquisition of Fintellix positions the Company to expand the data hosting and regulatory platforms and better address the increasingly complex needs of its customers. The preliminary purchase price allocation of the acquisition is presented in the table below. On February 24, 2017, the Company acquired 100 percent of the stock of Emergent Network Intelligence Limited (“ENI”), a developer in insurance claims efficiency and fraud detection solutions based in the United Kingdom ("U.K."), for a net cash purchase price of $6.1 million , of which $0.5 million represents indemnity escrows. With the acquisition of ENI within the Decision Analytics segment, the Company's customers in the U.K. can take advantage of technologically advanced tools that allow them to improve motor vehicle claims workflow and reduce their costs and exposure to fraud. The preliminary purchase price allocation of the acquisition is presented as part of "Others" in the table below. On February 16, 2017, the Company acquired 100 percent of the stock of Healix International Holdings Limited (“Healix”), a software analytics provider in automated medical risk assessment for the travel insurance industry, for a net cash purchase price of $52.4 million , of which $7.5 million represents indemnity escrows. Healix is within the Company's Risk Assessment segment. The acquisition further expands the Company's offerings for the global insurance industry, providing solutions that are embedded with customer workflows and can help underwrite medical coverage for travelers with greater speed, accuracy, and efficiency. The preliminary purchase price allocation of the acquisition is presented in the table below. On January 21, 2017, the Company acquired 100 percent of the stock of Arium Limited ("Arium") for a net cash purchase price of $1.9 million . Arium specializes in liability risk modeling and decision support. Arium has become part of the insurance vertical within the Decision Analytics segment, and enables the Company to provide its customers with additional modeling solutions and analytics for the casualty market. The preliminary purchase price allocation of the acquisition is presented as part of "Others" in the table below. The preliminary purchase price allocations of the 2017 acquisitions resulted in the following: Healix Fintellix MAKE G2 Sequel LCI Power Others Total Cash and cash equivalents $ 0.9 $ 1.1 $ 1.5 $ 1.0 $ 16.0 $ 1.1 $ 7.7 $ 0.6 $ 29.9 Accounts receivable 0.9 2.1 0.9 3.7 9.5 3.1 8.3 1.9 30.4 Current assets — 0.3 2.7 3.4 1.4 — 0.5 0.8 9.1 Fixed assets — 0.1 — 6.4 7.5 5.7 0.2 12.0 31.9 Intangible assets 24.1 6.6 6.9 45.3 102.4 59.0 99.1 9.7 353.1 Goodwill 32.7 11.7 12.7 71.4 230.0 99.1 162.8 26.1 646.5 Other assets 7.5 2.0 0.1 2.8 — 12.8 10.0 1.2 36.4 Total assets acquired 66.1 23.9 24.8 134.0 366.8 180.8 288.6 52.3 1,137.3 Current liabilities 1.1 1.5 3.3 3.2 9.8 1.1 3.4 0.8 24.2 Deferred revenues 0.1 0.8 1.5 0.4 2.4 0.3 11.0 0.6 17.1 Deferred income taxes, net 4.1 1.8 1.6 14.6 18.3 14.9 18.4 0.7 74.4 Other liabilities 7.5 1.8 — 2.8 — 12.8 47.7 4.2 76.8 Total liabilities assumed 12.8 5.9 6.4 21.0 30.5 29.1 80.5 6.3 192.5 Net assets acquired 53.3 18.0 18.4 113.0 336.3 151.7 208.1 46.0 944.8 Cash acquired (0.9 ) (1.1 ) (1.5 ) (1.0 ) (16.0 ) (1.1 ) (7.7 ) (0.6 ) (29.9 ) Net cash purchase price $ 52.4 $ 16.9 $ 16.9 $ 112.0 $ 320.3 $ 150.6 $ 200.4 $ 45.4 $ 914.9 The preliminary amounts assigned to intangible assets by type for the 2017 acquisitions are summarized in the table below: Weighted Average Useful Life Total Technology-related 10 years $ 99.2 Marketing-related 5 years 20.4 Customer-related 12 years 190.5 Database-related 12 years 43.0 Total intangible assets $ 353.1 The preliminary allocations of the purchase price of these acquisitions are subject to revisions as additional information is obtained about the facts and circumstances that existed as of each acquisition date. The revisions may have an impact on the consolidated financial statements. The allocations of the purchase price will be finalized once all information is obtained, but not to exceed one year from the acquisition date. The primary areas of the purchase price allocation that are not yet finalized relate to fixed assets and operating leases, income and non-income taxes, deferred revenues, the valuation of intangible assets acquired, and residual goodwill. The preliminary amounts assigned to intangible assets by type for these acquisitions were based upon the Company's valuation model and historical experiences with entities with similar business characteristics. The goodwill of $628.2 million associated with the stock purchases of PowerAdvocate, Rebmark, LCI, Sequel, G2, MAKE, Fintellix, ENI, Healix and Arium is not deductible for tax purposes, with the exception of $20.2 million of goodwill attributable to G2. The goodwill of $18.3 million associated with the asset purchases of Service Software and Aerial Imagery acquisitions is deductible for tax purposes. For the year ended December 31, 2017 , the Company incurred transaction costs related to these acquisitions of $6.8 million , which are included within "Selling, general and administrative" expenses in the accompanying consolidated statements of operations. Refer to Note 10. Goodwill and Intangible Assets for further discussion. The 2017 acquisitions were immaterial, both individually and in the aggregate, to the Company's consolidated financial statements for the years ended December 31, 2017 and 2016 and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented. 2016 Acquisitions On November 23, 2016, the Company acquired the net assets of IntelliStance, LLC ("MarketStance"), a provider of market intelligence data and analytics to the property/casualty insurance market, for a net cash purchase price of $8.6 million , of which $0.7 million represents indemnity escrows. MarketStance is within the Company's Risk Assessment segment. MarketStance has built a proprietary analytics model to provide actionable insights on customer's profitability and that enhances the Company's offerings. The final purchase price allocation of the acquisition is combined in the table below. On November 11, 2016, the Company acquired 100 percent of the stock of The GeoInformation Group Limited ("GeoInformation"), a provider of geographic data solutions, for a net cash purchase price of $6.3 million , of which $0.3 million represents indemnity escrows. GeoInformation offers mapping services and geospatial data and analytic solutions to companies and public sector organizations. GeoInformation's resources complement the Company's risk management and predictive analytics capabilities internationally within the Risk Assessment segment. The final purchase price allocation of the acquisition is combined in the table below. On October 20, 2016, the Company acquired 100 percent of the stock of Analyze Re, Inc. ("Analyze Re"), a software analytics provider for the reinsurance and insurance industries, for a net cash purchase price of $9.5 million , of which $1.0 million represents indemnity escrows. Analyze Re has become part of of the Company's Decision Analytics segment and enables the Company to provide its customers with additional real-time pricing, exposure management, and enterprise portfolio roll-up capabilities. The final purchase price allocation of the acquisition is combined in the table below. On August 19, 2016, the Company acquired the data and subscriptions business of Quest Offshore Resources, Inc. ("Quest Offshore"), which supplies market intelligence to the offshore oil and gas sector, for a net cash purchase price of $7.2 million , including a holdback of $0.8 million . The data and subscriptions business has become part of Wood Mackenzie Limited ("Wood Mackenzie") within the Decision Analytics segment and complements its existing upstream analysis expertise. The final purchase price allocation of the acquisition is combined in the table below. On July 26, 2016, the Company acquired 100 percent of the stock of Greentech Media, Inc. (“Greentech Media”), an information services provider for the electricity and renewables sector, for a net cash purchase price of $36.1 million , of which $4.4 million represents indemnity escrows. Greentech Media has become part of Wood Mackenzie within the Decision Analytics segment and enables Wood Mackenzie to provide its customers with market intelligence across several categories, including solar generation, energy storage, and smart grids that react to changes in supply and demand. The final purchase price allocation of the acquisition is combined in the table below. On April 14, 2016, the Company acquired 100 percent of the stock of Risk Intelligence Ireland Limited ("RII"), a provider of fraud detection, compliance, risk control, and process automation services to the Irish insurance industry, for a net cash purchase price of $6.2 million . RII enhances the ability of the Company's Risk Assessment segment to serve the international insurance market. The final purchase price allocation of the acquisition is combined in the table below. The combined final purchase price allocations of the 2016 acquisitions resulted in the following: Total Cash and cash equivalents $ 2.1 Accounts receivable 2.3 Current assets 0.3 Fixed assets 0.2 Intangible assets 30.5 Goodwill 55.4 Other assets 5.7 Total assets acquired 96.5 Current liabilities 2.2 Deferred revenues 7.7 Deferred income taxes, net 3.1 Other liabilities 7.5 Total liabilities assumed 20.5 Net assets acquired 76.0 Less: Cash acquired 2.1 Net cash purchase price $ 73.9 The impacts of finalization of the purchase accounting for MarketStance, GeoInformation, Analyze Re, Quest Offshore, Greentech Media, and RII during the measurement periods in accordance with ASC 805 were not material to the accompanying consolidated statements of operations for the years ended December 31, 2017 and 2016 . The goodwill of $42.9 million associated with the stock purchases of GeoInformation, Analyze Re, Greentech Media and RII is not deductible for tax purposes. The goodwill of $12.5 million associated with MarketStance and Quest Offshore asset acquisitions is deductible for tax purposes. For the year ended December 31, 2016 , the Company incurred transaction costs related to these acquisitions of $1.6 million , which are included within "Selling, general and administrative" expenses in the accompanying consolidated statements of operations. Refer to Note 10. Goodwill and Intangible Assets for further discussion. 2015 Acquisitions On November 20, 2015, the Company acquired 100 percent of the stock of The PCI Group ("PCI"). PCI is a consortium of five specialist companies that offer integrated data and subscriptions research in the chemicals, fibers, films, and plastics sectors. PCI has become part of Wood Mackenzie and continues to provide services to enhance Wood Mackenzie's chemicals capabilities in the Decision Analytics segment. The Company paid a net cash purchase price of $36.8 million after a working capital adjustment of $0.6 million . The final purchase price allocation of the acquisition is presented as “Others” in the table below. On November 6, 2015, the Company acquired 100 percent of the stock of Infield Systems Limited ("Infield"). Infield is a provider of business intelligence, analysis, and research to the oil, gas, and associated marine industries. Infield has become part of Wood Mackenzie and continues to provide services to enhance Wood Mackenzie's upstream and supply chain capabilities in the Decision Analytics segment. The Company paid a net cash purchase price of $14.1 million after a working capital adjustment of $0.3 million . The final purchase price allocation of the acquisition is presented as “Others” in the table below. On May 19, 2015, the Company acquired 100 percent of the stock of Wood Mackenzie for a net cash purchase price of $2,889.6 million , including $78.7 million of an indemnity escrow, which the Company financed through a combination of debt and equity offerings, borrowings under the Company's Credit Facility, and cash on hand. Due to the fact that a portion of the purchase price was funded in pounds sterling and the remainder in U.S. dollars, the Company entered into a foreign currency hedging instrument to purchase pounds sterling. The Company recorded a gain on the hedge of $85.2 million within "Gain on derivative instruments" in the accompanying consolidated statements of operations. The proceeds from the gain were utilized to partially fund the acquisition of Wood Mackenzie. Wood Mackenzie is a global provider of data analytics and commercial intelligence for the energy, chemicals, metals and mining verticals. This acquisition advances the Company’s strategy to expand internationally and positions the Company in the global energy market. Wood Mackenzie is included in the energy and specialized markets vertical, formerly named the specialized markets vertical, of the Decision Analytics segment. The final purchase price allocations of the acquisitions resulted in the following: Wood Mackenzie Others Total Cash and cash equivalents $ 35.4 $ 6.0 $ 41.4 Accounts receivable 80.3 2.0 82.3 Current assets 97.4 0.2 97.6 Fixed assets 71.9 0.3 72.2 Intangible assets 1,112.0 17.2 1,129.2 Goodwill 2,002.4 40.7 2,043.1 Other assets 2.0 5.0 7.0 Total assets acquired 3,401.4 71.4 3,472.8 Current liabilities 122.0 4.1 126.1 Deferred revenues 142.5 2.8 145.3 Deferred income taxes, net 204.3 2.9 207.2 Other liabilities 7.6 4.7 12.3 Total liabilities assumed 476.4 14.5 490.9 Net assets acquired 2,925.0 56.9 2,981.9 Less: Cash acquired 35.4 6.0 41.4 Net cash purchase price $ 2,889.6 $ 50.9 $ 2,940.5 The Company determined the fair values of the assets and liabilities of Wood Mackenzie, Infield and PCI with the assistance of valuations performed by third party specialists, discounted cash flow analysis and estimates made by management. The final amounts assigned to intangible assets by type for the acquisitions are summarized in the table below: Weighted Average Useful Life Total Technology-based 7 years $ 112.0 Marketing-related 20 years 234.1 Customer-related 14 years 284.4 Database-related 20 years 498.6 Total intangible assets $ 1,129.1 The impacts of finalization of the purchase accounting for Wood Mackenzie, Infield and PCI during the measurement periods in accordance with ASC 805 were not material to the accompanying consolidated statements of operations for the years ended December 31, 2016 and 2015 . The goodwill of $2,043.1 million associated with the stock purchases of PCI, Infield and Wood Mackenzie is not deductible for tax purposes. For the year ended December 31, 2015 , the Company incurred transaction costs related to these acquisitions of $27.6 million included within "Selling, general and administrative" expenses and $13.3 million included within "Interest expense" in the accompanying consolidated statements of operations. Refer to Note 10. Goodwill and Intangible Assets for further discussion. Acquisition Escrows Pursuant to the related acquisition agreements, the Company has funded various escrow accounts to satisfy pre-acquisition indemnity and tax claims arising subsequent to the acquisition dates, as well as a portion of the contingent payments. During the year ended December 31, 2017 , the Company released $3.8 million of indemnity escrows, of which $3.2 million related to the acquisition of PCI. During the year ended December 31, 2016 , the Company released $38.0 million of indemnity escrows, of which $37.0 million related to the Wood Mackenzie acquisition. At December 31, 2017 and 2016 , the current portion of the escrows amounted to $22.9 million and $4.1 million , and the noncurrent portion of the escrows amounted to $26.3 million and $6.3 million , respectively. The current and noncurrent portions of the escrows have been included in “Other current assets” and "Other assets" in the accompanying consolidated balance sheets, respectively. |