Acquisition

12 Months Ended

Dec. 31, 2019

3. Acquisition

On May 10, 2019, the Company acquired 100% of the equity interests of eFront Holding SAS (“eFront Transaction” or “eFront”), a leading alternative investment management software and solutions provider for approximately $1.3 billion, excluding the settlement of eFront’s outstanding debt. The acquisition of eFront expands Aladdin’s illiquid alternative capabilities and enables BlackRock to provide individual alternative or whole-portfolio technology solutions to clients.

The purchase price was funded through a combination of existing cash and issuance of commercial paper (subsequently repaid with existing cash) and long-term notes in April 2019. See Note 15, Borrowings, for information on the debt issuance in April 2019.

The purchase price for the eFront Transaction was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the transaction. The goodwill recognized in connection with the acquisition is non-deductible for tax purposes and is primarily attributable to anticipated synergies from the transaction.

Goodwill, finite-lived intangible assets and deferred income tax liabilities were retrospectively adjusted to reflect new information obtained about facts that existed as of May 10, 2019, the eFront acquisition date. There was no material change to the consolidated statements of income for the year ended December 31, 2019 as a result of these adjustments. A summary of the initial and revised fair values of the assets acquired and liabilities assumed in this acquisition is as follows⁽¹⁾:

	Initial			Revised
	Estimate of			Estimate of
(in millions)	Fair Value			Fair Value
Accounts receivable	$	65		$	61
Finite-lived intangible assets:
Customer relationships⁽²⁾		452			400
Technology-related⁽³⁾		205			203
Trade name⁽⁴⁾		21			14
Goodwill		990			1,044
Other assets		31			49
Deferred income tax liabilities		(194	)		(146	)
Other liabilities assumed		(64	)		(125	)
Total consideration, net of cash acquired	$	1,506		$	1,500

Summary of consideration, net of cash acquired:
Cash paid including settlement of outstanding debt of approximately $0.2 billion	$	1,555		$	1,555
Cash acquired		(49	)		(55	)
Total consideration, net of cash acquired	$	1,506		$	1,500

⁽¹⁾	At this time, the Company does not expect additional material changes to the value of the assets acquired or liabilities assumed in conjunction with the transaction.

⁽²⁾	The fair value was determined based on the excess earnings method (a Level 3 input), has a weighted-average estimated useful life of approximately 10 years and is amortized using the accelerated amortization method.

⁽³⁾	The fair value was determined based upon a relief from royalty method (a Level 3 input), has a weighted-average estimated useful life of approximately eight years and is amortized using the accelerated amortization method.

⁽⁴⁾	The fair value was determined using a relief from royalty method (a Level 3 input), has an estimated useful life of approximately four years and is amortized using the accelerated amortization method.

Finite-lived intangible assets in the table above are amortized over their estimated useful lives, which range from four to 10 years. Amortization expense related to the finite-lived intangible assets was $38 million for the year ended December 31, 2019. The finite-lived intangible assets had a weighted-average remaining useful life of approximately nine years with remaining amortization expense as follows:

(in millions)
Year	Amount
2020	$	60
2021		64
2022		68
2023		69
2024		71
Thereafter		247
Total	$	579

For the year ended December 31, 2019, eFront contributed $96 million of revenue and did not have a material impact to net income attributable to BlackRock, Inc. Consequently, the Company has not presented pro forma combined results of operations for this acquisition.