4. Consolidated Core Companies

Acquisitions

During 2012, ICG completed several acquisitions (including tuck-in acquisitions at its consolidated companies):

(1) On March 30, 2012, ICG acquired 96% of the equity of MSDSonline. The acquisition was accounted for under the acquisition method. ICG allocated the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values as of the date of acquisition.

(2) 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 was classified as a liability on the acquisition date, and (c) a $2.0 million deferred cash payment, due in $1.0 million increments payable on the one- and two-year anniversaries of the closing date of the acquisition. During the three months ended June 30, 2013, Procurian made the first $1.0 million deferred cash payment. Procurian allocated the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values as of the date of acquisition.

(3) On July 31, 2012, Procurian acquired UAI, an energy procurement specialist, for $6.7 million in cash. Procurian allocated the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values as of the date of acquisition.

(4) On December 27, 2012, ICG acquired additional equity ownership interests in Bolt (a former equity method company) for consideration of $13.2 million, increasing ICG’s ownership interest in that company from 38% to 53%. ICG consolidated the financial position of Bolt as of the date the additional equity interests were acquired and accounted for the transaction as a business combination. ICG allocated the enterprise value of Bolt to its tangible and identifiable intangible assets and liabilities based upon their respective estimated fair values as of the date of acquisition.

The allocations of the respective purchase prices for each of the above acquisitions, including (1) the allocation for Procurian’s acquisition of UAI and (2) the allocation of the enterprise value of Bolt to identified intangible assets and tangible assets and liabilities, both of which were finalized during the six months ended June 30, 2013, are as follows (in thousands):

	MSDSonline
Net assets acquired:
Goodwill	$	15,847		$	9,491	$	3,194		$	69,775
Customer lists (8-11 year life)		20,440			6,200		3,100			6,800
Technology (5-11 year life)		1,900			900		1,050			4,300
Trademarks, trade names and domain names (2-15 year life)		6,800			600		40			6,400
Non-compete agreements (1-5 year life)		3,580			268		120			—
Other net assets (liabilities)		1,170			316		(777	)		(5,850	)
		49,737			17,775		6,727			81,425
Noncontrolling interest (1)		(1,355	)		—		—			(31,824	)
	$	48,382		$	17,775	$	6,727		$	49,601

(1) ICG estimated the fair value of the noncontrolling interest of Bolt and MSDSonline with consideration of discounts for lack of control and lack or marketability. See subsection “Redeemable Noncontrolling Interest” in this Note 4 with respect to MSDSonline.

Redeemable Noncontrolling Interest

Certain GovDelivery stockholders have the ability to require GovDelivery to redeem their shares beginning in 2013. Because that redemption is outside the control of GovDelivery, ICG has classified this noncontrolling interest outside of equity and will accrete to its estimated redemption value with an offset to additional paid-in capital. This noncontrolling interest is classified as “Redeemable noncontrolling interest” on ICG’s Consolidated Balance Sheets.

Certain MSDSonline stockholders have the ability to require MSDSonline to redeem their shares beginning in 2014. Because that redemption is outside the control of MSDSonline, ICG has classified this noncontrolling interest outside of equity and will accrete to its estimated redemption value with an offset to additional paid-in capital. This noncontrolling interest is classified as “Redeemable noncontrolling interest” on ICG’s Consolidated Balance Sheets.

The following reconciles the activity related to the redeemable noncontrolling interest during the six months ended June 30, 2013 and 2012 (in thousands):

Balance at December 31, 2011	$	1,378
Redeemable noncontrolling interest portion of subsidiary net (income)/loss		(91	)
Accretion to estimated redemption value		211
Acquisition of MSDSonline		1,355
Impact of subsidiary equity transactions		(1	)
Balance at June 30, 2012	$	2,852

Balance at December 31, 2012	$	3,383
Redeemable noncontrolling interest portion of subsidiary net (income)/loss		(102	)
Accretion to estimated redemption value		570
Balance at June 30, 2013	$	3,851

Discontinued Operations

On January 29, 2013, the sale of InvestorForce to MSCI was consummated. Under the terms of the purchase agreement, MSCI acquired InvestorForce for $23.6 million in cash. ICG’s proceeds from the sale were $20.8 million, a portion of which is being held in escrow. ICG recorded a gain of $15.7 million during the six months ended June 30, 2013 related to the transaction; that gain is included in the line item “Income (loss) from discontinued operations, including gain on sale” on ICG’s Consolidated Statements of Operations for the six-month period ended June 30, 2013. Additionally, InvestorForce’s results of operations for all periods presented have been presented as discontinued operations on ICG’s Consolidated Statements of Operations. InvestorForce’s revenue was $0.8 million for the period from January 1, 2013 to the date of sale. InvestorForce’s revenue was $2.3 million and $4.2 million for the three and six months ended June 30, 2012, respectively. ICG’s share of InvestorForce’s net loss for the 2013 period was $0.4 million. ICG’s share of InvestorForce’s net loss for the three and six months ended June 30, 2012 was $0.2 million and $0.8 million, respectively. The assets and liabilities of InvestorForce as of December 31, 2012 were $3.4 million and $3.9 million, respectively, and are presented on ICG’s Consolidated Balance Sheets for that period in the line items “Assets of discontinued operations” and “Liabilities of discontinued operations,” respectively. The “Assets of discontinued operations” as of December 31, 2012 also include $0.7 million of ICG goodwill related to InvestorForce.

On February 20, 2013, Channel Intelligence was sold to Google for $125.0 million in cash, subject to adjustment for working capital and other items. In the transaction, ICG realized $60.5 million, a portion of which is being held in escrow. ICG recorded a gain of $17.8 million during the six months ended June 30, 2013 related to the transaction that is included in the line item “Income (loss) from discontinued operations, including gain on sale” on ICG’s Statements of Operations for the six-month period ended June 30, 2013. Channel Intelligence’s results of operations for the period from January 1, 2013 to the date of sale have been presented as discontinued operations on ICG’s Consolidated Statements of Operations for the six months ended June 30, 2013. Channel Intelligence’s revenue for the period from January 1, 2013 to the date of sale was $3.1 million. ICG’s share of Channel Intelligence’s net loss for that period was $2.1 million. Additionally, the assets (excluding goodwill and intangible assets in the table below) and liabilities of Channel Intelligence as of December 31, 2012 were $7.1 million and $6.5 million, respectively, and are included in the line items “Assets of discontinued operations” and “Liabilities of discontinued operations,” respectively, on ICG’s Consolidated Balance Sheets as of that date.

The “Assets of discontinued operations” as of December 31, 2012 also include ICG’s goodwill and ICG’s intangible assets related to its acquisition accounting of Channel Intelligence, which amounts are as follows (in thousands):

ICG’s goodwill related to Channel Intelligence discontinued operations	$	48,895
ICG’s intangible assets related to Channel Intelligence discontinued operations:
Customer relationships	$	9,522
Trademarks/tradenames/domain names		6,683
Licensing and services agreements		3,519
Developed technology		2,710
Total of ICG’s intangible assets related to Channel Intelligence discontinued operations	$	22,434

In connection with the sales of Channel Intelligence and InvestorForce, ICG received cash proceeds (excluding amounts held in escrow) of $73.4 million. Consistent with ICG’s policy election, those proceeds are reflected in cash flows provided by investing activities from continuing operations on ICG’s Consolidated Statement of Cash Flows for the six months ended June 30, 2013.

Other Consolidated Company Transactions

Periodically, ICG acquires additional equity ownership interests in its consolidated companies. Equity ownership interests purchased from a consolidated company’s existing shareholders results in an increase in ICG’s controlling interest in that company and a corresponding decrease in the noncontrolling interest ownership. Those transactions are accounted for as a decrease to “Noncontrolling Interest” and a decrease to “Additional paid-in capital” in ICG’s Consolidated Balance Sheets for the relevant period. ICG may also acquire additional equity ownership interests in its consolidated companies as a result of share issuances by those companies. An issuance of equity securities by a consolidated company that results in a decrease in ICG’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 ICG’s equity ownership interests in its consolidated core companies, as well as equity-based compensation award activity at those companies, also result in adjustments to “Additional paid-in capital” and “Noncontrolling Interest” in ICG’s Consolidated Balance Sheets. The impact of any equity-related transactions at ICG’s consolidated core companies is included in the line item “Impact of subsidiary equity transactions” on ICG’s Consolidated Statements of Changes in Equity.

For the six months ended June 30, 2013, ICG recorded a net increase of $1.5 million and less than $0.1 million to “Additional paid-in capital” and “Noncontrolling Interest” on ICG’s Consolidated Balance Sheets, respectively. For the six month ended June 30, 2012, ICG recorded a net decrease of $1.9 million and a net increase of $1.1 million to “Additional paid-in capital” and “Noncontrolling Interest” on ICG’s Consolidated Balance Sheets, respectively. In both six-month periods, those amounts primarily related to (1) ICG’s acquisition of additional ownership interests in Procurian from former Procurian employees, and (2) equity-related transactions associated with Procurian’s acquisitions. 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.

Pro Forma Information

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 relative periods, had ICG owned MSDSonline and Bolt, and had Procurian owned Media IQ and UAI during the three and six-month periods ended June 30, 2012.

	Three Months Ended June 30,
	2013				2012				2013			2012
	(in thousands, except per share data)
Revenue	$	48,662		$		46,761		$		95,001	$		88,774
Net income (loss) attributable to ICG Group, Inc.	$	(6,858	)	$		(6,189	)	$		12,210	$		(13,726	)
Net income (loss) per diluted share attributable to ICG Group, Inc.	$	(0.19	)	$		(0.17	)	$		0.33	$		(0.38	)