4. Business combinations

Centacare

        On January 31, 2014, we acquired certain businesses from Centacare for $2.7 million ($3.1 million Australian) in cash. The operations of these businesses are consistent with the welfare-to-work services we provide Australia. The Company acquired these businesses in order to expand our operations in Australia.

        Of the purchase price, we allocated $3.2 million to intangible assets, representing customer relationships, and $0.5 million to deferred revenue. The intangible assets will be amortized over the anticipated lives of the customer relationships, which are approximately four years.

        The businesses acquired with Centacare were immediately integrated into our existing business within our Human Services segment. The results of the acquired business would not be material for any periods shown.

Health Management Limited

        On July 1, 2013 (the acquisition date), we 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 U.K. We acquired HML, among other reasons, to expand the Company's independent medical assessment business and to establish a strong presence in the U.K. health services market. The acquired assets and business have been integrated into our Health Services Segment.

        We allocated the acquisition price to the fair value of the assets and liabilities of HML at the acquisition date. We provided estimates of these balances at September 30, 2013 and updated these estimates as more information became available. We have completed this exercise. The assets and liabilities of HML recorded in our financial statements at the acquisition date are summarized below (in thousands):

                                                                                                                                                                                                             

        The difference between the acquisition date fair value of the consideration and the estimated fair value of the net assets acquired was recorded as goodwill. We consider 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 deductible for tax purposes.

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

                                                                                                                                                                                                             

        The weighted average amortization period was 19.5 years.

Policy Studies, Inc.

        On April 30, 2012 (the PSI acquisition date),we acquired 100% of the share capital of PSI Services Holding, Inc. and its wholly owned subsidiary, Policy Studies, Inc. (PSI) for cash consideration of $63.4 million.

        PSI supports government clients in the administration of a number of health and human services programs exclusively within the U.S. We acquired PSI, among other reasons, to strengthen our leadership in the administration of public health and human services programs. The acquired assets and business have been integrated into our Health Services and Human Services Segments.

        The assets and liabilities of PSI were recorded in our financial statements at their fair values as of the PSI acquisition date. The final valuation of the assets and liabilities acquired was as follows (in thousands):

                                                                                                                                                                                                             

        The difference between the acquisition date fair value of the consideration and the estimated fair value of the net assets acquired was recorded as goodwill and allocated to our two segments, Health Services and Human Services, based upon the respective valuations of the businesses. We consider the goodwill to represent a number of potential strategic and financial benefits that are expected to be realized as a result of the acquisition, including, but not limited to, the assembled workforce and the addition of new capabilities within our existing business. Goodwill is not deductible for tax purposes.

DeltaWare Systems, Inc.

        On February 10, 2010 (the DeltaWare acquisition date), we acquired 100% of the share capital of DeltaWare Systems, Inc. (DeltaWare).

        As part of the acquisition agreement, we must pay the former owners of DeltaWare up to $4.0 million (Canadian). These payments, considered contingent consideration, will be made based upon sales of DeltaWare's products in particular geographic markets prior to December 2016. The Company has recorded a long-term liability of $0.4 million that represents the payment that management assesses will likely be paid. In the event that such sales are anticipated, this could result in an increase to this liability based upon the size and location of the sales. No such sales have been made to date and the likelihood of future sales between this time and December 2016 is considered low. We review the likelihood of future sales on a quarterly basis and, to the extent that sales opportunities are identified, proposals submitted or contracts won, we update our probability weighted assessment of payment. Changes in this assessment will result in an expense or credit to earnings. The contingent consideration payable for any single contract signed would be based upon the population of the area served but would be capped at $1.0 million (Canadian) per sale. As the inputs required for the valuation of this liability require significant judgment, they are considered to be Level 3 inputs under the Financial Accounting Standards Board's classification of assets and liabilities subject to fair value measurement.

        The effect on the financial statements is summarized below (in thousands):