Consolidated Core Businesses

9 Months Ended

Sep. 30, 2013

Consolidated Core Businesses

4. Consolidated Core Businesses

Acquisitions

During 2012 and 2013, ICG completed the following acquisitions:

(1) On March30, 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 December27, 2012, ICG acquired additional equity ownership interests in Bolt (then an equity method business) for consideration of $13.2 million, increasing ICG’s ownership interest in that business 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 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.

(3) On August 9, 2013, Bolt acquired Superior Access for $9.0 million in cash.  Bolt has estimated the allocation of purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective estimated fair values at the date of acquisition.  The acquisition accounting related to Bolt’s acquisition of Superior Access is expected to be complete by December 31, 2013.  

The allocations of the purchase price related to the acquisition of MSDSonline and Superior Access and the allocation of the value upon consolidation of Bolt to identified intangible assets and tangible assets and liabilities areas follows (in thousands):

		MSDSonline			Bolt			Superior Access
Net assets acquired:
Goodwill	$	15,847		$	68,253		$	1,177
Customer lists (5-11 year life)		20,440			6,800			5,200
Trademarks, trade names and domain names (5-11 year life)		6,800			6,400			1,300
Technology (5 year life)		1,900			4,300			1,300
Non-compete agreements (3 year life)		3,580			—			—
Other net assets (liabilities)		1,170			(5,150	)		23
		49,737			80,603			9,000
Noncontrolling interest (1)		(1,355	)		(31,824	)		—
	$	48,382		$	48,779		$	9,000
(1)ICG estimated the fair value of the noncontrolling interest in Bolt and MSDSonline with consideration of discounts for lack of control and lack of marketability. See “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 2014 based on a fair value determination. 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 2015 based on a fair value determination. 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 nine months ended September30, 2013 and 2012 (in thousands):

Balance at December31, 2011	$	1,378
Redeemable noncontrolling interest portion of subsidiary net (income)/loss		(132	)
Accretion to estimated redemption value		345
Acquisition of MSDSonline		1,309
Impact of subsidiary equity transactions		6
Balance at September30, 2012	$	2,906
Balance at December31, 2012	$	3,383
Redeemable noncontrolling interest portion of subsidiary net (income)/loss		(95	)
Accretion to estimated redemption value		675
Balance at September30, 2013	$	3,963

Other Consolidated Businesses Transactions

Periodically, ICG acquires additional equity ownership interests in its consolidated businesses. 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” on ICG’s Consolidated Balance Sheets for the relevant period. ICG may also acquire additional equity ownership interests in its consolidated businesses as a result of share issuances by those companies.An issuance of equity securities by a consolidated business 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 businesses, as well as equity-based compensation award activity at those companies, also result in adjustments to “Additional paid-in capital” and “Noncontrolling Interest” on ICG’s Consolidated Balance Sheets.  The impact of any equity-related transactions at ICG’s consolidated core businesses is included in the line item “Impact of subsidiary equity transactions” on ICG’s Consolidated Statements of Changes in Equity.

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 consolidated MSDSonline and Bolt (including Bolt’s acquisition of Superior Access) in each of those periods.

	ThreeMonthsEndedSeptember30,						NineMonthsEndedSeptember30,
	2013			2012		2013			2012
	(in thousands, except per share data)
Revenue	$	17.3		$	12.9	$		48.3	$	34.5
Net income (loss) attributable to ICG Group, Inc.	$	(3.3	)	$	20.9	$		9.0	$	6.3
Net income (loss) per diluted share attributable to ICG Group, Inc.	$	(0.09	)	$	0.57	$		0.25	$	0.17