Consolidated Core Companies

6 Months Ended

Jun. 30, 2012

Consolidated Core Companies [Abstract]

Consolidated Core Companies

4. Consolidated Core Companies

On March 30, 2012, ICG acquired 96% of the equity of MSDSonline; the acquisition was accounted for under the acquisition method. Accordingly, ICG allocated the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values at the date of acquisition, which were as follows (in thousands):

Net assets acquired:
Goodwill	$	15,847
Customer lists (11 year life)		20,440
Technology (5 year life)		1,900
Trademarks, trade names and domain names (11 year life)		6,800
Non-compete agreements (3 year life)		3,580
Other net assets (liabilities)		1,170
		49,737
Redeemable noncontrolling interest (1)		(1,355	)
	$	48,382

⁽¹⁾  ICG estimated the fair value of the redeemable noncontrolling interest of MSDSonline with consideration of discounts for lack of control and lack or marketability. See Note 13, “Redeemable Noncontrolling Interest.”

Because MSDSonline was acquired on March 30, 2012, the results of its operations from the acquisition date through March 31, 2012 were immaterial to ICG and are therefore not included in ICG’s Consolidated Statements of Operations for that period. See the pro forma information table below.

On June 29, 2012, Procurian acquired Media IQ, LLC (“Media IQ”), a media audit and benchmarking services provider, for consideration consisting of (a) $11.5 million in cash paid at closing, (b) Procurian common stock valued at $4.0 million, which is classified as a liability and included in the line items “Accrued Expenses” and “Other Liabilities” in ICG’s Consolidated Balance Sheets as of June 30, 2012, and (c) $2.0 million of deferred cash payment that is due in $1.0 million increments on the one- and two-year anniversaries of the closing date of the acquisition. Procurian will allocate the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values at the date of acquisition. The estimated total amount of intangible assets will be included in goodwill until that allocation is completed, which is expected to happen by December 31, 2012.

The information in the following table represents revenue, net income (loss) attributable to ICG Group, Inc. and net income (loss) per diluted share attributable to ICG Group, Inc. for the relevant periods had ICG consolidated MSDSonline for the entire six-month period ended June 30, 2012 and the three- and six-month period ended June 30, 2011. The pro forma information in the following table also includes the effect of Procurian’s acquisition of Media IQ had ICG owned 80% of Procurian and had Media IQ been included in Procurian’s results for the three- and six-month periods ended June 30, 2012 and 2011.

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in thousands, except per share data)
Revenue	$	46,372		$	39,740		$	87,963		$	77,688
Net income (loss) attributable to ICG Group, Inc.	$	(5,791	)	$	(2,977	)	$	(12,724	)	$	13,021
Net income (loss) per diluted share attributable to ICG Group, Inc.	$	(0.16	)	$	(0.08	)	$	(0.35	)	$	0.34

During the six months ended June 30, 2012, ICG acquired additional equity ownership interests (totaling slightly less than 1%) in Procurian through the purchase of Procurian common stock from former Procurian employees for aggregate consideration of $1.5 million. The increase in ICG’s equity ownership interest in Procurian resulted in an increase in ICG’s controlling interest and a corresponding decrease in noncontrolling interest ownership. Accordingly, ICG recorded a decrease during the six months ended June 30, 2012 of $0.4 million to “Noncontrolling Interest” in ICG’s Consolidated Balance Sheets. The remaining purchase price of $1.1 million was recorded as a decrease to “Additional paid-in capital” in ICG’s Consolidated Balance Sheets as of June 30, 2012. This transaction is also included in the line item “Impact of incremental acquisition of consolidated subsidiary” in ICG’s Consolidated Statements of Changes in Equity for the six months ended June 30, 2012.

During the three months ended June 30, 2012, in connection with the transaction with Media IQ, Procurian issued additional shares of common stock to both Media IQ and ICG. Following those stock issuances, ICG’s equity ownership interest in Procurian decreased from 81% to 80% as of June 29, 2012. That reduction in ICG’s equity ownership interest in Procurian was accounted for as a disposition of shares and resulted in a dilution loss of $1.1 million that was recorded as a decrease to “Additional paid-in capital” in ICG’s Consolidated Balance Sheets as of June 30, 2012; that dilution gain is included in the line item “Impact of subsidiary equity transactions” in ICG’s Consolidated Statements of Changes in Equity for the six months ended June 30, 2012.

Other changes to ICG’s equity ownership interests in its consolidated core companies, as well as equity-based compensation award activity at ICG’s consolidated core companies also result in adjustments to “Additional paid-in capital” and “Noncontrolling Interest” in ICG’s Consolidated Balance Sheets. The impact of those changes to ICG’s equity ownership interests in its consolidated core companies (excluding the acquisition of additional equity ownership interests in Procurian from former Procurian employees discussed above) on ICG’s “Additional paid-in capital,” which are included in the line item “Impact of subsidiary equity transactions” in ICG’s Consolidated Statements of Changes in Equity for the six months ended June 30, 2012 and 2011, were as follows:

	Six Months Ended June 30,
	2012			2011
	(in thousands)
GovDelivery	$	37		$	18
InvestorForce	$	3		$	(368	)
MSDSonline	$	150		$	—
Procurian	$	(964	)	$	906

The impact of those changes to the noncontrolling interest, which are also included in the line item “Impact of subsidiary equity transactions” in ICG’s Consolidated Statements of Changes in Equity for the six months ended June 30, 2012 and 2011, was as follows:

	Six Months Ended June 30,
	2012		2011
	(in thousands)
InvestorForce	$	—	$	369
Procurian	$	1,509	$	296

In July and August 2012, ICG acquired additional equity ownership interests in Channel Intelligence for consideration of $2.4 million, increasing ICG’s ownership interest in that company to 52%. Following the first of those acquisitions, which occurred on July 11, 2012, ICG will consolidate the financial results of Channel Intelligence. ICG will complete an acquisition allocation related to that transaction, which it expects to finalize by December 31, 2012.

In July 2012, Procurian acquired Utilities Analyses, Inc. (“UAI”), an energy procurement specialist, for $6.7 million in cash. Procurian will allocate the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values at the date of acquisition, which it expects to finalize by December 31, 2012.