Business Combinations

3 Months Ended

Jun. 30, 2020

Business Combinations

Business Combinations

(4) Business Combinations

During the fiscal year ended March 31, 2020, the Company acquired three individually immaterial businesses with an aggregate purchase price of $29,624 being paid at closing and a deferred consideration of $10,313 payable within a one-year period.  The purchase price is also subject to adjustment after the closing of up to an additional $28,853 in contingent consideration, in the aggregate, upon the achievement of certain revenue and operating margin targets. The performance period for these targets are ranging from 12 months to 24 months from the respective acquisition date. These acquisitions enhanced the breadth and depth of digital offerings and expanded the Company’s relationship with certain existing customers.

Under the purchase method of accounting, assets acquired are recorded at their estimated fair values. The Company is in the process of obtaining additional information primarily regarding valuation assumptions, including contingent consideration and may continue to adjust the preliminary estimated fair values after obtaining more information regarding asset valuations and revision of preliminary estimates. During the three months ended June 30, 2020, the Company paid $6,313 in deferred consideration related to these acquisitions. During the three months ended June 30, 2020, the Company recorded $4,526 as a reduction of goodwill related to updating the fair value assessment of contingent consideration of $3,915, customer relationships of $313 and other adjustments of $298.

The following table shows the aggregate preliminary purchase price allocation for these acquisitions:

	Amount		Useful Life
Consideration Transferred:
Cash paid at closing	$	29,624
Deferred consideration payable		10,313
Fair value of contingent consideration		21,049
Fair value of consideration		60,986
Less: Cash acquired		(477)
Total purchase price, net of cash acquired	$	60,509
Assets and Liabilities:
Cash and cash equivalents		477
Goodwill		22,790
Customer relationships		38,119	5 -7 years
Other net		(400)
Total purchase price	$	60,986

The primary items that generated goodwill for these acquisitions are the value of the acquired assembled workforce and other benefits expected to result from combining the acquired operations with those of the Company, neither of which qualify as a separate intangible asset.

During the three months ended June 30, 2020, the Company recorded $1,578 in the Company’s consolidated statements income (loss) as fair value changes to the contingent consideration related to events that occurred in the current period. As of June 30, 2020, the fair value of contingent consideration for these acquisitions is $19,495.