Consolidated Businesses

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Consolidated Businesses

Consolidated Businesses

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 $0.25 million of which was paid during the three months ended March 31, 2017. The acquisition was accounted for under the acquisition method. VelocityEHS has allocated the purchase price to the acquired identifiable intangible assets and goodwill based upon their respective fair values as of the date of acquisition.

On September 16, 2016, VelocityEHS acquired certain assets of E3 Solutions Inc. ("E3 Solutions") for $3.0 million of cash consideration, $2.7 million of which was paid at the closing of the transaction, and $0.3 million of which will be paid in equal installments on the 12-month and 18-month anniversaries of the closing. The acquisition was accounted for under the acquisition method. VelocityEHS has allocated the purchase price to the acquired identifiable intangible assets and goodwill based upon their respective fair values as of the date of acquisition.

On October 31, 2016, FolioDynamix acquired certain assets of SAS Capital Management, LLC ("SAS") for a maximum consideration of $25.0 million. The initial consideration paid, net of working capital, was approximately $2.9 million. Aggregate payments of approximately $1.0 million are payable over the 15-month period following the closing for a total fixed consideration of $3.9 million. The SAS acquisition is subject to an earnout based on the achievement of specified revenue targets that was valued at $7.9 million at the date of acquisition. The acquisition was accounted for under the acquisition method. FolioDynamix has preliminarily allocated the purchase price to identifiable tangible and intangible assets, goodwill and deferred revenue.

The allocations of the respective ErgoAdvocate, E3 Solutions and SAS purchase prices to identified intangible assets and tangible assets and liabilities were as follows:

(in thousands)	ErgoAdvocate		E3 Solutions		SAS
Goodwill	$	155	$	1,074	$	9,736
Customer lists (5-11 year life)	26		28		2,153
Trademarks, trade names and domain names (5-11 year life)	—		6		—
Technology (7-9 year life)	1,069		1,822		344
Non-compete agreement (5 year life)	—		70		233
Deferred revenue	—		—		(320		)
Other net assets (liabilities)	—		—		(397		)
Total net assets acquired	$	1,250	$	3,000	$	11,749

Redeemable Noncontrolling Interests

In connection with GovDelivery's acquisitions of NuCivic, Inc. ("NuCivic") and Textizen, Inc. ("Textizen"), certain GovDelivery stockholders had the ability to require GovDelivery to redeem a portion of their shares in 2017, 2018, 2019 and 2020 based on a fair value determination. In connection with the GovDelivery Sale, the vesting of the redeemable shares related to the NuCivic and Textizen acquisitions was accelerated, and the shares were cashed out for a portion of the sale consideration.

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/or 2020 based on a mutually agreed upon fair value determination. Because any such redemptions would be 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, 2017 and 2016:

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

Balance at December 31, 2016	$	5,858
Redeemable noncontrolling interest portion of subsidiary net income (loss)	12
Accretion to estimated redemption value	23
Balance at March 31, 2017	$	5,893

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⁽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%. Actua's ownership in FolioDynamix did not significantly change from the 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’s existing shareholders results in an increase in Actua’s controlling interest in that business and a corresponding decrease in the noncontrolling interests 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 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. 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 $5.4 million paid by Actua in order to repurchase shares in its consolidated businesses offset by $4.9 million relating to Actua’s share of its consolidated businesses' equity transactions. Actua did not repurchase any shares of its consolidated businesses during the three months ended March 31, 2017; therefore, the balance of $0.5 million in the "Impact of subsidiary equity transactions" line item (as shown on Actua’s Consolidated Statements of Changes in Equity) relates entirely 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 and the net loss per diluted share attributable to Actua for the relevant period had it owned E3 Solutions and SAS during that period.

(in thousands, except per share data)	Three Months Ended March 31, 2016
Revenue	$	26,721
Net loss attributable to Actua Corporation	$	(12,370	)
Net loss per diluted share attributable to Actua Corporation	$	(0.33	)