Quarterly report pursuant to Section 13 or 15(d)

Business Combinations

Business Combinations
3 Months Ended
Dec. 31, 2013
Business Combinations  
Business Combinations


4. Business Combinations


Health Management Limited


On July 1, 2013 (the acquisition date), the Company acquired 100% of the share capital of Health Management Limited (HML) for total consideration of $77.9 million (£51.1 million). The consideration was comprised of $71.4 million (£46.9 million) in cash and 202,972 shares of MAXIMUS stock worth $6.4 million (£4.2 million).


HML provides independent health assessments within the United Kingdom. MAXIMUS acquired HML, among other reasons, to expand the Company’s independent medical assessment business and to establish a strong presence in the United Kingdom health services market. The acquired assets and business have been integrated into the Company’s Health Services Segment.


The assets and liabilities of HML were recorded in the Company’s financial statements at their fair values at the acquisition date as follows (in thousands):




Preliminary Purchase
Price Accounting


Cash consideration, net of cash acquired





Stock consideration




Purchase consideration, net of cash acquired





Accounts receivable and unbilled receivables





Other current assets




Property and equipment




Intangible assets




Total identifiable assets acquired




Accounts payable and other liabilities




Deferred revenue




Current income tax liability




Deferred tax liability




Total liabilities assumed




Net identifiable assets acquired








Net assets acquired






Management is still in the process of completing certain assessments of fair value of these assets and liabilities, including the assessment of the fair value of intangible assets acquired. The excess of the acquisition date fair value of consideration over the estimated fair value of the net assets acquired will be recorded as goodwill. The Company considers the goodwill to represent benefits that are expected to be realized as a result of the business combination, including, but not limited to, the assembled workforce and the benefit of the enhanced knowledge and capabilities of HML. Goodwill is not expected to be deductible for tax purposes.


The valuation of the intangible assets acquired is summarized below (in thousands).




Useful life


Fair value


Customer relationships


20 years





Technology-based intangible assets


2 years




Total intangible assets








The weighted average amortization period was 19.5 years.


Australian business


On January 31, 2014, the Company acquired certain businesses operated by the Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane, Australia for $2.7 million in cash. The operations of these businesses are consistent with the services provided by MAXIMUS in Australia. The Company acquired these businesses in order to expand our operations in Australia. Management is still in the process of allocating the fair value of the consideration to the assets acquired.