Consolidated Businesses

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Consolidated Businesses

Consolidated Businesses

FolioDynamix Acquisition

On November 3, 2014, Actua acquired all of the issued and outstanding stock of FolioDynamix for approximately $201.7 million in cash, which included $0.7 million as a post-closing working capital adjustment that occurred in the first quarter of 2015, and $4.1 million of equity value related to stock options.  

Other Acquisitions

On June 10, 2015, GovDelivery acquired certain assets of Talent Management in Government Inc. (“TMGov”) for $0.5 million of consideration consisting of $0.4 million at closing and $0.1 million to be paid upon achievement of certain milestones, as set forth in the purchase agreement. The $0.1 million was paid during 2015. The acquisition was accounted for under the acquisition method. GovDelivery has allocated the purchase price to the acquired identifiable intangible assets based upon their respective fair values as of the date of acquisition.

On July 13, 2015, GovDelivery acquired Vox Metropolis Inc. (d/b/a Textizen) (“Textizen”) for approximately $1.2 million of cash; $0.4 million of the $1.2 million cash consideration is being retained by GovDelivery until July 2016 in order to satisfy potential indemnity claims. The acquisition was accounted for under the acquisition method. GovDelivery has allocated the purchase price to the acquired identifiable intangible assets based upon their respective fair values as of the date of acquisition.

On November 25, 2015, VelocityEHS acquired certain assets of WellNet Solutions, Inc. (“WellNet”) for cash consideration of $0.7 million. Intangible assets of $1.4 million were recorded in connection with the acquisition. Additionally, as of the three months ended March 31, 2016, $0.7 million of cash consideration was paid and contingent consideration of $0.9 million was recorded within the “accrued expenses” line item in the current liabilities section of the Consolidated Balance Sheet associated with the estimated costs for future incremental WellNet customer acquisitions.

On January 22, 2016, VelocityEHS acquired certain assets of ErgoAdvocate LLC (“ErgoAdvocate”) for $1.25 million of cash consideration, $1.0 million of which was paid at the closing of the transaction, and $0.13 million of which will be paid on each of the six-month and one-year anniversaries of the closing, subject to reduction for any post-closing indemnification claims. The acquisition was accounted for under the acquisition method. VelocityEHS has allocated the purchase price to the acquired identifiable intangible assets based upon their respective fair values as of the date of acquisition.

The allocations of the respective TMGov, Textizen and ErgoAdvocate purchase prices, to identified intangible assets and tangible assets and liabilities were as follows:

(in thousands)	TMGov		Textizen			ErgoAdvocate
Goodwill	$	—	$	606		$	—
Customer lists (5-8 year life)	250		171			—
Trademarks, trade names and domain names (8 year life)	—		117			—
Technology (5-9 year life)	250		347			1,250
Other net assets (liabilities)	—		(41		)	—
Total net assets acquired	$	500	$	1,200		$	1,250

Redeemable Noncontrolling Interests

In connection with the NuCivic, Inc. (“NuCivic”) and Textizen acquisitions, certain GovDelivery stockholders have the ability to require GovDelivery to redeem a portion of their shares in 2017, 2018, 2019 and 2020 based on a fair value determination. Certain VelocityEHS stockholders have the ability to require VelocityEHS to redeem a portion of their shares in 2017 based on a mutually agreed upon fair value determination. Certain FolioDynamix shareholders have the ability to require FolioDynamix to redeem a portion of their shares in 2018, 2019 and 2020 based on a mutually agreed upon fair value determination. Because those redemptions are outside the control of the respective businesses, Actua has classified the noncontrolling interests outside of equity and will accrete to the estimated redemption values with an offset to additional paid-in capital. The noncontrolling interests are classified as “Redeemable noncontrolling interests” in Actua’s Consolidated Balance Sheets.

The following is a reconciliation of the activity related to Actua’s redeemable noncontrolling interest during the three months ended March 31, 2016 and 2015:

Balance at December 31, 2014	$	6,221
Redeemable noncontrolling interest portion of subsidiary net loss	(68)
Accretion to estimated redemption value	1,303
Equity transfer among owners	(3,339)
Impact of subsidiary equity transactions	(631)
Balance at March 31, 2015	$	3,486

Balance at December 31, 2015	$	10,506
Redeemable noncontrolling interest portion of subsidiary net loss	(69		)
Accretion to estimated redemption value	633
Equity transfer among owners (1)	(5,247		)
Balance at March 31, 2016	$	5,823

____________________________

⁽¹⁾ This amount primarily relates to cash payments made during the three months ended March 31, 2016 of $5.4 million to acquire $2.5 million of redeemable noncontrolling interests associated with GovDelivery, $2.4 million of redeemable noncontrolling interests associated with VelocityEHS and $0.5 million of redeemable noncontrolling interests associated with FolioDynamix. These transactions increased Actua’s ownership in GovDelivery from 92% to 94% and its ownership in VelocityEHS from 98% to 99%. Its ownership in FolioDynamix did not significantly change from this repurchase.

Other Consolidated Businesses Transactions

From time to time, Actua acquires additional equity ownership interests in its consolidated businesses. Purchasing equity ownership interests from a consolidated business’ existing shareholders results in an increase in Actua’s controlling interest in that business and a corresponding decrease in the noncontrolling interest ownership. Those transactions are accounted for as decreases to “Noncontrolling interests” and increases to “Additional paid-in capital” in Actua’s Consolidated Balance Sheets for the relevant periods. Actua may also acquire additional equity ownership interests in its consolidated businesses, either from existing holders or as a result of share issuances by one or more of those businesses, and Actua’s equity ownership interests may be diluted by any such share issuances to other parties. An issuance of equity securities by a consolidated business that results in a decrease in Actua’s equity ownership interests is accounted for in accordance with the policy for “Principles of Accounting for Ownership Interests” described in Note 2, “Significant Accounting Policies.” Other changes to Actua’s equity ownership interests in its consolidated businesses, as well as equity-based compensation award activity at those businesses, also result in adjustments to “Additional paid-in capital” and “Noncontrolling interests” in Actua’s Consolidated Balance Sheets. The impact of any equity-related transactions at Actua’s consolidated businesses is included in the line item “Impact of subsidiary equity transactions” in Actua’s Consolidated Statements of Changes in Equity. The impact of these changes to the noncontrolling interest are also included in the line item “Impact of subsidiary equity transactions” in Actua’s Consolidated Statements of Changes in Equity for the relevant period. During the three months ended March 31, 2016, the “Impact of subsidiary equity transactions” line item as shown on Actua’s Consolidated Statements of Changes in Equity was $0.5 million, which was comprised of (1) $5.4 million paid by Actua in order to buy back shares in its consolidated businesses and (2) $(4.9) million relating to Actua’s share of its consolidated businesses equity transactions.

Pro Forma Information (Unaudited)

The information in the following table represents the revenue, net loss attributable to Actua Corporation and the net loss per diluted share attributable to Actua Corporation for the relevant periods had it owned TMGov, Textizen, ErgoAdvocate and WellNet for the three months ended March 31, 2015.

(in thousands, except per share data)
Revenue	$	30,930
Net loss attributable to Actua Corporation	$	(15,210	)
Net loss per diluted share attributable to Actua Corporation	$	(0.41	)