ACQUISITIONS AND INVESTMENTS |
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| Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACQUISITIONS AND INVESTMENTS | ACQUISITIONS AND INVESTMENTS
2023 Acquisitions and Investments. In the first quarter of 2023, the Company acquired 100% of The Food Industry Credit Bureau, which is a provider of credit information for the food industry in Canada, from Profile Credit, within the International operating segment. The Company accounted for this acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the acquisition. The purchase price allocation for this acquisition is final as of December 31, 2023.
Acquisition of Boa Vista Serviços
On August 7, 2023, we acquired the remaining interest of our investment in BVS, a consumer and commercial credit information company in Brazil, within the International operating segment for approximately $510 million in cash, 2,171,615 shares of Equifax do Brasil, and 479,725 shares of Equifax Inc. common stock (the "Acquisition"). We previously owned a 10% investment in BVS.
The following table summarizes the fair value of consideration exchanged to complete the acquisition of BVS:
(1) The cash transferred represents the actual cash transferred as part of the transaction. The cash portion of the consideration was funded primarily with borrowings under our commercial paper program.
(2) The fair value of the 2,171,615 Equifax do Brasil common shares issued was determined based on the offer price for the outstanding BVS shares.
(3) One Equifax BDR represents one share of Equifax Inc. common stock. The fair value of the 479,725 Equifax BDRs issued was determined based on the share price of Equifax Inc. as of August 7, 2023.
The Company accounted for this acquisition in accordance with ASC 805, Business Combinations, which requires the assets acquired and the liabilities assumed to be measured at fair value at the date of the acquisition. The purchase price allocation for the acquisition is not yet finalized and open areas relate to the measurement of intangible assets, noncontrolling interest, income taxes, working capital and other reserves, as well as the assignment of goodwill recognized in the transaction. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date.
The preliminary valuation of acquired assets and assumed liabilities at the date of the acquisition, include the following:
(1) Purchased intangible assets are further disaggregated in the following table.
(2) The goodwill related to BVS is included in the Latin America reporting unit within our International reportable segment.
The goodwill recognized in connection with the transaction was due to expanded growth opportunities from expanding geographically into Brazil, the opportunity to create new or enhanced product offerings, as well as cost savings from improved technology and the elimination of duplicative activities that are not recognized as assets apart from goodwill.
Redeemable Noncontrolling Interest
As part of the merger consideration issued to complete the acquisition of BVS, we issued shares of one of our subsidiaries, Equifax do Brasil, thus resulting in a noncontrolling interest. We recognized the noncontrolling interest at fair value at the date of acquisition. These shares were issued with specific rights allowing the holders to sell the shares back to Equifax, at fair value during specified future time periods starting at the fifth anniversary and only when certain conditions exist. Additionally, the shareholder agreements provide Equifax the right to buy the shares back at fair value at future dates beginning after the tenth anniversary of the acquisition, however Equifax is not required to execute this right at any point.
We determined the noncontrolling interest shareholder rights meet the requirements to be considered redeemable. Refer to Note 1 for further information on how we have accounted for the redeemable noncontrolling interest.
2022 Acquisitions and Investments. In the first quarter of 2022, the Company acquired 100% of Efficient Hire, a provider of cloud recruiting, onboarding and human resources management solutions, within the Workforce Solutions operating
segment, and Data Crédito, a consumer credit reporting agency in the Dominican Republic, within the International operating segment. In the third quarter of 2022, the Company acquired 100% of LawLogix, a provider of cloud-based I-9 software and immigration case management software, within the Workforce Solutions operating segment, and Midigator, a provider of post-transaction fraud mitigation solutions, within the USIS business segment. We have completed the allocation of the purchase prices for the 2022 acquisitions.
2021 Acquisitions and Investments. In February 2021, the Company acquired 100% of Kount, a provider of fraud prevention and digital identity solutions for $640 million within the USIS business unit. Additionally in the first quarter of 2021, the Company acquired 100% of HIREtech and i2Verify within the Workforce Solutions business unit as well as a small acquisition and purchase of the remaining noncontrolling interest of a business within our International business unit. In the third quarter of 2021, the Company acquired 100% of Health e(fx) and Teletrack within the Workforce Solutions and USIS business units, respectively, as well as the purchase of the remaining noncontrolling interest of a business within our International business unit. Additionally, the Company acquired 100% of Appriss Insights within the Workforce Solutions business unit in October 2021, for cash consideration of approximately $1.825 billion. Appriss Insights is a source of risk and criminal justice intelligence information.
Purchase Price Allocation. The following table summarizes the estimated fair value of the net assets acquired and the liabilities assumed at the acquisition dates during 2023 and 2022.
(1)Purchased intangible assets are further disaggregated in the following table.
(2)The goodwill related to the 2023 acquisitions was recognized in the International operating segments. An immaterial amount of the goodwill related to the 2023 acquisitions was tax deductible. The balance includes purchase price allocation adjustments made during the year. The goodwill related to the 2022 acquisitions was recognized in the Workforce Solutions, USIS and International operating segments. $196.1 million of goodwill related to the 2022 acquisitions was tax deductible, which excludes goodwill related to Data Crédito within International and a portion of goodwill related to Midigator within USIS.
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 and geographies, cost savings from the elimination of duplicative activities and the acquisition of an assembled workforce that are
not recognized as assets apart from goodwill.
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