Freedom Holding Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS

ACQUISITIONS

12 Months Ended

Mar. 31, 2021

NOTE 27 - ACQUISITIONS

The acquisitions below were accounted for under the acquisition method of accounting in accordance with ASU Topic 805, Business Combinations.

Acquisition of Zerich

On July 2, 2020, we completed the acquisition of Zerich following receipt of approval from the Russian Federal Antimonopoly Service. Zerich commenced business in 1995 and is one of the oldest securities brokerage firms in Russia. The Company acquired Zerich for $7,110. The total purchase price was allocated as follows:

	Purchase price allocation
	As of July 2, 2020
Assets:
Cash and cash equivalents	$	26,760
Restricted cash		1,231
Trading securities		2,828
Fixed assets		8
Intangible assets		3,733
Right-of-use asset		454
Brokerage and other receivables		376
Other assets		94
Total assets	$	35,484

Liabilities:
Customer liabilities	$	25,799
Securities repurchase agreement obligation		1,600
Lease liabilities		497
Trade and other payables		104
Deferred income tax liabilities		765
Other liabilities		419
Total liabilities	$	29,184

Net assets acquired	$	6,300

Goodwill		810

Total purchase price	$	7,110

On December 27, 2020, Zerich was merged into Freedom RU and its separate legal existence terminated. The assets and liabilities of Zerich were transferred to Freedom RU at their perspective carrying amounts on the date of the merger was completed.

Acquisition of PrimeEx

On December 29, 2020, the Company completed the acquisition of PrimeEx. PrimeEx commenced business in 1985 and is an agency only institutional brokerage at the NYSE. The Company acquired PrimeEx for $2,500. The total purchase price was allocated as follows:

	Purchase price allocation
	As of December 29, 2020
Assets:
Cash and cash equivalents	$	206
Brokerage and other receivables		849
Intangible assets		532
Other assets		9
Total assets	$	1,596

Liabilities:
Deferred income tax liabilities	$	112
Other liabilities		610
Total liability	$	722

Net Assets Acquired	$	874

Goodwill		1,626

Total purchase price	$	2,500

Acquisition of Freedom Bank KZ

On December 28, 2020, the Company closed the acquisition of Freedom Bank KZ, following receipt of approval from the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market. Freedom Bank KZ is a Kazakhstani based second tier Bank. For accounting purposes, on December 25, 2020, the Company acquired control over the entity by purchasing the common shares of Freedom Bank KZ. The total purchase price of this acquisition was $53,097 which was paid in cash. The purchase price included consideration paid for the outstanding common shares in the amount of $40,984, consideration paid for the outstanding preferred shares in the amount of $2,478 and consideration paid for outstanding subordinated loans in the amount of $9,635. The purchase price as of the control acquisition date was allocated as follows:

	Purchase price allocation
	As of December 25, 2020
Assets:
Cash and cash equivalents	$	129,185
Trading securities		50,684
Brokerage and other receivables		2,601
Fixed assets		10,987
Intangible assets		2,769
Right-of-use asset		338
Loans issued		1,023
Other assets		2,360
Total assets	$	199,947

Liabilities:
Customer liabilities	$	117,195
Current income tax liability		1,234
Trade payables		104
Securities repurchase agreement obligation		28,500
Lease liability		338
Other liabilities		831
Deferred income tax liabilities		1,399
Total liability	$	149,601

Net Assets Acquired	$	50,346

Goodwill		2,751

Consideration paid for common shares		40,984
Consideration paid for preferred shares		2,478
Consideration paid for subordinated loans		9,635
Total purchase price	$	53,097