Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS AND INVESTMENTS

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ACQUISITIONS AND INVESTMENTS
 12 Months Ended
Dec. 31, 2011
ACQUISITIONS AND INVESTMENTS

4.  ACQUISITIONS AND INVESTMENTS

 

2011 Acquisitions and Investments.   On August 1, 2011, to further enhance our market position, we acquired DataVision Resources, which provides data and business solutions to the mortgage, insurance and financial services industries, for $50.0 million.  The results of this acquisition have been included in our TALX Workforce Solutions segment subsequent to the date of acquisition.

 

To further broaden our product offerings, during the twelve months ended December 31, 2011, we completed smaller acquisitions of information services businesses in the European and Latin American regions of our International segment as well as our U.S. Consumer Information Solutions and TALX Workforce Solutions segments for $82.4 million. The results of these acquisitions have been included in our operating results subsequent to the date of acquisition and are not material.

 

2010 Acquisitions and Investments.   On October 1, 2010, to broaden our portfolio of solutions, we acquired Anakam, Inc., a provider of large-scale, software-based, multi-factor authentication solutions, for $64.3 million.  The results of this acquisition have been included in our U.S. Consumer Information Solutions segment subsequent to the date of acquisition.

 

To further enhance our market share, during the twelve months ended December 31, 2010, we completed four additional acquisitions totaling $12.3 million.  These transactions were in our International segment and the results of these acquisitions have been included in our operating results subsequent to the date of acquisition and are not material.

 

2009 Acquisitions and Investments.   On December 23, 2009, as a part of our long-term growth strategy of expanding into emerging markets, we formed a joint venture, Equifax Credit Information Services Private Limited, or ECIS, to provide a broad range of credit data and information solutions in India. We paid cash consideration of $5.2 million for our 49 percent equity interest in ECIS.

 

On November 2, 2009, to further enhance our income and identity verification service offerings, we acquired Rapid Reporting Verification Company, or Rapid, a provider of IRS tax transcript information and social security number authentication services, for $72.5 million. The results of this acquisition have been included in our TALX Workforce Solutions operating segment subsequent to the acquisition.

 

On October 27, 2009, we acquired IXI Corporation, or IXI, a provider of consumer wealth and asset data, for $124.0 million. This acquisition enables us to offer more differentiated and in-depth consumer income, wealth and other data to help our clients improve their marketing, collections, portfolio management and customer management efforts across different product segments. The results of this acquisition have been included in our U.S. Consumer Information Solutions operating segment subsequent to the acquisition date.

 

We financed these purchases through borrowings under our Senior Credit Facility, which were subsequently refinanced through the issuance in November 2009 of our 4.45%, five-year unsecured Senior Notes. The 4.45% Senior Notes are further described in Note 6 of the Notes to the Consolidated Financial Statements.

 

Purchase Price Allocation.   The following table summarizes the estimated fair value of the net assets acquired and the liabilities assumed at the acquisition dates. The 2011 allocations are considered final, except for the resolution of certain contingencies all of which existed at the acquisition date, primarily related to sales tax exposures and income tax accounts, which will be resolved when final returns are filed related to the acquired entities. Estimates for these items have been included in the purchase price allocations and will be finalized prior to the one year anniversary date of the acquisitions.

 

    December 31,  
    2011     2010  
    (In millions)  
Current assets   $ 14.1     $ 6.0  
Property and equipment     4.2       0.3  
Other assets     0.1       0.6  
Identifiable intangible assets (1)     52.2       30.6  
Goodwill (2)     75.6       47.5  
Total assets acquired     146.2       85.0  
Total liabilities assumed     (13.8 )     (8.0 )
Non-controlling interest     -       (0.4 )
Net assets acquired   $ 132.4     $ 76.6  

 

(1) Identifiable intangible assets are further disaggregated in the following table.

 

(2) Of the goodwill resulting from 2011 and 2010 acquisitions, $44.7 million and $4.4 million, respectively, is tax deductible.

  

The primary reasons the purchase price of these acquisitions exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, were expanded growth opportunities from new or enhanced product offerings, cost savings from the elimination of duplicative activities, and the acquisition of an assembled workforce that are not recognized as assets apart from goodwill.

 

    December 31,  
    2011     2010  
          Weighted-           Weighted-  
          average useful           average  
Intangible asset category   Fair value     life     Fair value     useful life  
    (in millions)     (in years)     (in millions)     (in years)  
Customer relationships   $ 29.9       8.8     $ 11.5       8.9  
Acquired software and technology     13.4       4.2       13.9       5.9  
Purchased data files     3.2       5.2       -       -  
Non-compete agreements     2.3       3.7       3.8       3.7  
Trade names and other intangible assets     3.4       5.5       1.4       5.8  
Total acquired intangibles   $ 52.2       6.9     $ 30.6       6.8  

 

The 2011 and 2010 acquisitions did not have a material impact in the Company’s Consolidated Statements of Income.  The impact of the 2011 and 2010 acquisitions would not have significantly changed our Consolidated Statements of Income if they had occurred at the beginning of the earliest year presented.