Acquisitions (Tables) - SiriusDecisions, Inc [Member]

9 Months Ended

Sep. 30, 2019

Summary of Fair Value of Aggregate Consideration Paid

The following table summarizes the fair value of the aggregate consideration paid for SiriusDecisions (in thousands):

Cash paid at close (1)	$	246,801
Working capital adjustment (2)		(1,259	)
Total	$	245,542

(1) The cash paid at close represents the gross contractual amount paid. Net cash paid, which accounts for the cash acquired of $7.9 million and the working capital adjustment of $1.3 million, was $237.7 million and is reflected as an investing activity in the Consolidated Statements of Cash Flows.

(2) Amount represents the final amount receivable from the sellers based upon working capital as defined, which was received in the third quarter of 2019.

Summary of Preliminary Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the acquisition of SiriusDecisions (in thousands):

Assets:
Cash and cash equivalents	$	7,858
Accounts receivable		19,237
Prepaids and other current assets		3,660
Fixed assets		4,169
Goodwill (1) (2)		154,906
Acquired intangible assets (3)		115,000
Other assets		265
Total assets		305,095
Liabilities:
Accounts payable and accrued liabilities		8,924
Deferred revenue		26,143
Deferred tax liability (2)		22,357
Long-term deferred revenue		1,037
Other long-term liabilities		1,092
Total liabilities		59,553
Net assets acquired	$	245,542

(1) Goodwill represents the expected revenue and cost synergies from combining SiriusDecisions with Forrester as well as the value of the acquired workforce.

(2) During the third quarter of 2019, the Company recorded a $1.8 million measurement period adjustment related to deferred taxes. The adjustment reduced the allocation of the purchase price to both deferred tax liabilities and goodwill.

(3) All of the acquired intangible assets are finite-lived. The determination of the fair value of the finite-lived intangible assets required management judgment and the consideration of a number of factors. In determining the fair values, management primarily relied on income valuation methodologies, in particular discounted cash flow models. The discounted cash flow models required the use of estimates, including projected cash flows related to the particular asset, the useful lives of the particular assets, the selection of royalty and discount rates used in the models and certain published industry benchmark data. In establishing the estimated useful lives of the acquired intangible assets, the Company relied primarily on the duration of the cash flows utilized in the valuation model. Of the $115.0 million assigned to acquired intangible assets, $13.0 million was assigned to the technology asset class with useful lives of 1 to 8 years (with a weighted average amortization period of 3.2 years), $13.0 million to backlog with a useful life of 2.0 years, $77.0 million to customer relationships with a useful life of 9.25 years, and $12.0 million to trade names with a useful life of 15.5 years. The weighted-average amortization period for the total acquired intangible assets is 8.4 years. Amortization of acquired intangible assets was $5.4 million and $16.3 million for the three and nine months ended September 30, 2019, respectively.

Schedule of Unaudited Pro Forma Financial Information

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Pro forma total revenue	$	110,224		$	101,848		$	347,751		$	318,094
Pro forma net loss	$	(1,092	)	$	(2,511	)	$	(5,359	)	$	(9,951	)