Business Combinations

9 Months Ended

Sep. 30, 2011

Business Combinations [Abstract]

Business Combinations

3. Business Combinations

On December 21, 2010, the Company entered into a Stock Purchase Agreement to acquire all of the issued and outstanding shares of capital stock of AECsoft USA, Inc., a Texas corporation, and AEC Global (Shanghai) Co., Ltd., a Chinese corporation (collectively, “AECsoft”), which together are a leading provider of supplier management and sourcing technology.

The Company completed the acquisition of AECsoft, USA, Inc. on January 1, 2011 and the acquisition of AEC Global (Shanghai) Co., Ltd. on March 31, 2011. The acquisition of AECsoft adds comprehensive supplier management, sourcing and compliance reporting to the Company’s existing strategic procurement and supplier enablement solutions.

The total purchase price of $13,795 consisted of $9,256 in cash and 350,568 shares of the Company’s common stock at a fair value of $4,539. The issuance of 25,365 of these shares, with an estimated fair value of $300, is subject to successful completion of certain performance targets under an earn-out arrangement with a former shareholder of AECsoft. Additionally, 299,838 shares of the Company’s common stock may be issued under an earn-out arrangement with the other former shareholders of AECsoft, upon the successful achievement of performance conditions over the next three fiscal years, including continued employment with the Company. The fair value of these shares will be recognized as stock-based compensation expense in the consolidated statement of operations over the requisite service period of the award. During the three and nine months ended September 30, 2011, the Company recognized stock-based compensation expense of $367 and $1,099, respectively, related to this earn-out arrangement.

The Company incurred acquisition costs of approximately $0 and $134 during the three and nine months ended September 30, 2011, respectively, which are included in general and administrative expense in the consolidated statements of operations. The acquisition was accounted for under the purchase method of accounting. The operating results of AECsoft are included in the accompanying consolidated financial statements from the date of acquisition.

The purchase consideration consisted of the following:

Cash	$	9,256
Fair value of common stock		4,539
Total purchase consideration	$	13,795
Cash acquired		(1,910	)
Net purchase consideration	$	11,885

The purchase price was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Acquired technology and the covenant not to compete are amortized on a straight-line basis. Acquired customer relationships are amortized over a ten-year estimated life in a pattern consistent with which the economic benefit is expected to be realized. The excess of the purchase price over the net tangible and identifiable intangible assets acquired was recorded as goodwill which is not deductible for tax purposes. This asset is attributed to a trained workforce and buyer-specific value resulting from synergies that are not included in the fair values of assets.

The allocation of the purchase price as of the acquisition date was as follows:

	Estimated	Estimated
	Useful Life	Fair Value
Accounts receivable		$	831
Prepaid expenses and other current assets			174
Property and equipment			82
Deferred tax asset			1,414
Covenant not to compete	5 years		51
Acquired technology	7 years		1,176
Customer relationships	10 years		4,200
Goodwill			8,954
Accrued expenses			(524	)
Deferred tax liability			(2,111	)
Deferred revenues			(2,362	)
Total purchase consideration		$	11,885

The following unaudited proforma consolidated results of operations for the three and nine months ended September 30, 2010 assumes that the AECsoft acquisition occurred at the beginning of the year. The unaudited pro forma information combines the historical results for the Company with the historical results for AECsoft for the same period. The following unaudited pro forma information is not intended to be indicative of future operating results.

	Three Months			Nine Months
	Ended			Ended
	September 30,			September 30,
	2010			2010
Pro forma revenue	$	12,046		$	35,096
Pro forma net (loss) income	$	(2,754	)	$	50
Pro forma net (loss) income per share, basic	$	(0.19	)	$	0.00
Pro forma net (loss) income per share, diluted	$	(0.19	)	$	0.00