Acquisition

3 Months Ended

Mar. 31, 2013

Acquisition [Abstract]

Acquisition

5. Acquisition

On February 28, 2013, the Company acquired all of the outstanding shares of Xtrakter Limited from Euroclear S.A./N.V. Xtrakter is a U.K.-based provider of trade matching, regulatory transaction reporting and market and reference data across a range of fixed-income products. The acquisition of Xtrakter provides the Company with an expanded set of technology solutions ahead of incoming pre- and post-trade transparency mandates from the Markets in Financial Instruments Directive II in Europe. The aggregate purchase price was $37.1 million in cash, net of acquired cash, and is subject to a post-closing adjustment based on the net working capital of Xtrakter on the closing date. During the three months ended March 31, 2013, transaction costs such as legal, regulatory, accounting, tax, valuation and other professional services were $1.4 million.

The Company has completed a preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed at the date of acquisition. It is possible that the purchase price allocation will be adjusted upon finalization of the valuation for the acquired intangible assets, income tax liabilities and post-closing working capital adjustment. The preliminary purchase price allocation is as follows (in thousands):

Purchase price	$	45,974
Less: acquired cash		(8,856	)
Purchase price, net of acquired cash		37,118
Accounts receivable		3,327
Intangible assets		13,255
Other assets		1,729
Deferred tax liability, net		(2,284	)
Accounts payable, accrued expenses and deferred revenue		(5,084	)
Goodwill	$	26,175

The acquired intangible assets are as follows (in thousands, except for useful lives):

	Costs		Useful Lives
Customer relationships	$	5,455		10-15 years
Internally developed software		5,000		3 years
Tradename- indefinite life		1,820		indefinite
Tradename- finite life		300		3 years
Non-compete agreement		380		3 years
Other		300		indefinite
Total	$	13,255

The identifiable intangible assets and goodwill are not deductible for tax purposes.

Since the date of the acquisition, Xtrakter-related revenue and net income of $1.9 million and $0.1 million, respectively, have been included in the Company’s Consolidated Statements of Operations. The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for the three months ended March 31, 2013 and 2012, as if the acquisition of Xtrakter had occurred as of the beginning of each year presented, after giving effect to certain purchase accounting adjustments. These pro forma results are not necessarily indicative of what the Company’s operating results would have been had the acquisition actually taken place at the beginning of each period presented. The pro forma financial information includes the amortization charges from acquired intangible assets, adjustments to interest income to reflect the cash purchase price and related tax effects.

	Pro forma
	Three Months Ended March 31,
	2013		2012
	(In thousands, except per share amounts)
Revenues	$	59,481	$	57,177
Income before income taxes	$	24,418	$	22,824
Net income	$	15,395	$	13,529
Basic net income per common share	$	0.42	$	0.37
Diluted net income per common share	$	0.41	$	0.35