BUSINESS COMBINATIONS

12 Months Ended

Jan. 31, 2014

BUSINESS COMBINATIONS [Abstract]

BUSINESS COMBINATIONS

3.   BUSINESS COMBINATIONS

CEBOS

On December 28, 2012, the Company acquired all of the outstanding stock of CEBOS, Ltd. ("CEBOS"), a provider of quality management and regulatory compliance software solutions, in a nontaxable transaction. CEBOS was founded in 1998 and is headquartered in Michigan, USA. The Company completed the acquisition for the purpose of expanding its product offerings and driving revenue growth. The purchase price consisted of $3.5 million in cash and two future payments due April 2014 and April 2015. Each future payment consists of $0.3 million guaranteed and $0.5 million contingent upon achievement of certain development and earnings-based milestones. The contingent liability was estimated by assessing the probability of achieving each milestone and discounting the amount of each potential payment based on expected timing of the payment. The fair value of the liability-classified contingent consideration is remeasured at each reporting period with any changes in the fair value recorded as income or expense and is reported in “Other (income) expense” in the Consolidated Statements of Income and Comprehensive Income. During fiscal 2014 CEBOS accomplished all development related goals but did not meet certain earnings targets. This resulted in a reduction of the related contingent consideration by $0.3 million for a first year earn-out of $0.5 million, paid on April 1, 2014. The additional undiscounted amount of future cash payments related to the second earn-out payment is between $0.3 million and $0.8 million.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Tangible assets, including cash acquired of $0.4 million	$	1,318
Goodwill		2,561
Other intangible assets		3,450
Total assets acquired		7,329
Liabilities assumed		(1,233	)
Deferred tax liability		(1,209	)
Net assets acquired	$	4,887

The Company believes the amount of goodwill resulting from the purchase price allocation is attributable to the workforce of the acquired business and the expected synergistic benefits of being able to leverage CEBOS’s software with the Company’s existing software to provide an integrated suite to the customer bases of both the Company and CEBOS. The acquired goodwill and intangible assets are not deductible for tax purposes.

Identified intangible assets will be amortized to cost of license fees and operating expense based upon the nature of the asset ratably over the estimated useful life, as detailed in the table below (in thousands, except year amounts):

	Estimated useful life (years)		Fair value		Estimated annual amortization		Statement of income classification
Software technology		2 - 5	$	1,750	$	320-395	Cost of license fees
Customer relationships		5		1,500		300	Amortization of intangibles from acquisitions
Trade name		5		200		40	Amortization of intangibles from acquisitions
			$	3,450

The Company evaluated pre-acquisition contingencies relating to CEBOS that existed as of the acquisition date. The Company preliminarily determined that certain of these pre-acquisition contingencies were probable in nature and estimable as of the acquisition date and, accordingly, recorded its best estimates for these contingencies as a part of the purchase price allocation. The purchase price allocation process requires the Company to use significant estimates and assumptions as of the business combination date.  During the fourth quarter of fiscal 2014 the Company finalized the allocation of the purchase price and recorded an adjustment of $0.1 million related to a change in certain assumptions associated with accounts receivable.  This adjustment increased the provisionally recognized goodwill by the same amount.

DynaSys

On June 6, 2012, the Company acquired France-based DynaSys S.A. ("DynaSys"), a provider of demand and supply chain planning software solutions, for $7.5 million.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Tangible assets, including cash acquired of $2.8 million	$	4,250
Goodwill		2,231
Software technology		1,800
Customer relationships		1,400
Trade name		300
Total assets acquired		9,981
Liabilities assumed		(2,032	)
Deferred tax liability		(450	)
Net assets acquired	$	7,499

During fiscal 2014 the Company finalized the allocation of the purchase price.  There were no adjustments to the purchase price allocation.

The results of operations of DynaSys and CEBOS are included in the Consolidated Financial Statements from the date of acquisition. The acquisitions were not deemed material, thus pro forma supplemental information has not been provided.