BUSINESS ACQUISITIONS

Aegis Transactions

On July 20, 2018, the Company completed the acquisition of all of the issued and outstanding shares of capital stock of Aegis from the Aegis Stockholder in exchange for the issuance of 20,600,000 shares of the Common Stock in the Aegis Transactions. Concurrently, the Aegis Stockholder purchased 166,667 newly issued shares of the Common Stock at a price of $12 per share for a total cash payment of $2 million. As a result of the consummation of the Aegis Transactions, the Aegis Stockholder holds 20,766,667 shares of the Common Stock, which is equivalent to approximately 55% of the total outstanding Common Stock.

The transaction was accounted for as a reverse acquisition and Aegis is considered to be the accounting acquirer. Therefore, Aegis’ historical financial statements replace the Company’s historical financial statements following the completion of the Aegis Transactions, and the results of operations of both companies will be included in the Company’s financial statements for all periods subsequent to July 20, 2018.

The estimated fair value of the purchase consideration is calculated based on the Company's stock price as it is considered to be more reliably determinable than the fair value of Aegis' private stock. Consideration is calculated based on the Company's closing stock price of $6.81 on July 20, 2018.

The following table presents the purchase price and the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. These estimates are preliminary, pending final evaluation of certain assets, and therefore are subject to revisions that may result in adjustments to the values presented below:



	Amount
Stock consideration (based on shares outstanding immediately prior the closing date)	16,226,392
Closing share price on July 20, 2018	$	6.81
Total allocable purchase price	$	110,502

	Amount
Cash and cash equivalents	$	1,496
Other current assets	46,094
Property, plant and equipment, net	15,930
Identifiable intangible assets	28,960
Goodwill	63,282
Other non-current assets	3,204
Current liabilities	(21,485		)
Non-current liabilities	(26,979		)
Preliminary purchase price	$	110,502

The purchase consideration above differs from that which was disclosed previously due to a correction of the number of shares used in the calculation. Other immaterial adjustments were made to other current assets, other current liabilities, non-current liabilities and goodwill since the close of the Aegis Transactions.

The goodwill recognized was attributable primarily to the acquired workforce, increased utilization of our global delivery platform and other synergistic benefits. Goodwill from this acquisition is not expected to be deductible for tax purposes.

The amount of Startek's revenues and net loss since the July 20, 2018 acquisition date, included in our consolidated statements of operations and comprehensive income (loss) for the nine months ended December 31, 2018 were as follows:



	From July 20, 2018 through December 31, 2018
Revenues	$	106,186
Net loss	$	(11,849	)

The following table presents the unaudited pro forma information assuming the Aegis Transactions occurred on April 1, 2017. The unaudited pro forma information is not necessarily indicative of the results of operations that would have been achieved if the acquisition and related borrowings had taken place on that date:



	Nine Months Ended December 31, 2018			Year Ended March 31, 2018
Revenues	$	497,246		$	761,642
Net loss attributable to Startek shareholders	$	(20,006	)	$	(10,317	)
Net loss per common share - basic and diluted	$	(0.66	)	$	(0.50	)
Weighted average common shares outstanding - basic and diluted	30,518			20,600

These amounts have been calculated to reflect additional amortization related to the intangible assets identified in the transaction, removal of transaction related fees, and the related tax effects for each period presented.

Transaction related fees of approximately $7,036 related to transaction and integration expenses are identified separately on our consolidated statements of comprehensive income (loss) for the nine months ended December 31, 2018.

ESM Holding Limited and Subsidiaries

On November 22, 2017 (“Acquisition date”), the CSP Alpha Holdings Pte. Ltd. ("Successor") has acquired a 100% of its stake in ESM Holdings Limited ("ESMHL" or "Predecessor") and its subsidiaries, which provides business processing outsourcing services and business solution to global industry players and IT services for total consideration of $280,000. The Company has funded the acquisition by infusing an equity of $153,910 in cash and $140,000 from a five year secured term loan. The purchase consideration has been allocated on the fair value of assets, liabilities and non-controlling interests. The primary method used in determining fair value estimates was the income approach, which attempts to estimate the income producing capability of the asset.

In the fourth quarter of 2018, the allocation of the purchase price was finalized. In the final allocation, the value of the equity affiliates was decreased from $10,830 to $2,030. This resulted in a $8,800 increase to goodwill.

The final fair values of the identifiable assets and liabilities of ESMHL were:



	Amount
Purchase consideration	$	280,000
Less: Cash acquired	21,357
Total allocable purchase consideration	$	258,643

	Amount
Assets
Property, plant and equipment , net	$	27,715
Goodwill	162,168
Software	9,980
Customer relationships	52,600
Brand	49,500
Equity affiliates	2,030
Other current and non-current assets (including restricted cash)	150,718
Liabilities
Trade payables	(17,516		)
Borrowings	(24,893		)
Accrued expenses and other current liabilities	(107,939		)
Non-controlling interests	(45,720		)
Total purchase price	$	258,643

Goodwill is attributable mainly to expected synergies and assembled workforce arising from the acquisition. Goodwill arising from this acquisition is not deductible for tax purposes.

Transaction related fees of approximately $7,994 and $107 are identified separately on our consolidated statements of comprehensive income (loss) for the Successor and Predecessor periods, respectively.