ACQUISITIONS

Strategic acquisitions allowed the Company to expand into desirable geographic locations, complement the existing vertical markets, increase revenue and create new service offerings.

NavigationArts — On July 10, 2015, the Company acquired all of the outstanding equity of NavigationArts, Inc. and its subsidiary, NavigationArts, LLC (collectively “NavigationArts”). The U.S.-based NavigationArts provides digital consulting, architecture and content solutions and is regarded as a leading user-experience agency. The acquisition of NavigationArts added approximately 90 design consultants to the Company’s headcount. In connection with the NavigationArts acquisition the Company paid $28,747 in cash consideration, of which $2,670 was placed in escrow for a period of 18 months as security for the indemnification obligations of the sellers under the terms of the stock purchase agreement. In the first quarter of 2016, the Company decided to make a 338(h)(10) election to treat the NavigationArts acquisition as an asset purchase for tax purposes. As a result, the Company is obligated to pay an additional $1,797 to the sellers of NavigationArts, as provided for in the stock purchase agreement. This liability is recorded as deferred consideration.

AGS — On November 16, 2015, the Company acquired all of the outstanding equity of Alliance Consulting Global Holdings, Inc including its wholly-owned direct and indirect subsidiaries Alliance Global Services, Inc., Alliance Global Services, LLC, companies organized under the laws of USA, and Alliance Global Services IT India, a company organized under the laws of India (collectively, “AGS”). AGS provides software product development services and test automation solutions and has multiple locations in the United States and India. The acquisition of AGS added 1,151 IT professionals to the Company’s headcount in the United States and India. In connection with the AGS acquisition, the Company paid $51,254 as cash consideration, of which $5,000 was placed in escrow for a period of 15 months as security for the indemnification obligations of the sellers under the terms of the stock purchase agreement. The Company made a true-up payment for working capital in the amount of $463 during the quarter ended March 31, 2016.

The following is a summary of the estimated fair values of the net assets acquired at the date of each respective acquisition as originally reported during the year 2015 and at March 31, 2016:



	NavigationArts				AGS				Total
	As Originally Reported		As of March 31, 2016		As Originally Reported		As of March 31, 2016		As Originally Reported		As of March 31, 2016
Cash and cash equivalents	$	1,317	$	1,317	$	1,727	$	1,727	$	3,044	$	3,044
Trade receivables and other current assets	3,920		3,920		10,600		10,600		14,520		14,520
Property and equipment and other long-term assets	230		230		1,665		1,665		1,895		1,895
Deferred tax asset	—		—		4,996		4,996		4,996		4,996
Acquired intangible assets	1,500		2,800		10,000		10,000		11,500		12,800
Goodwill	23,822		23,794		33,815		33,675		57,637		57,469
Total assets acquired	30,789		32,061		62,803		62,663		93,592		94,724
Accounts payable and accrued expenses	871		871		3,087		2,792		3,958		3,663
Bank loans and other long-term liabilities	—		—		—		295		—		295
Deferred revenue	50		50		1,049		1,049		1,099		1,099
Due to employees	596		596		3,010		3,010		3,606		3,606
Deferred tax liability	525		—		3,800		3,800		4,325		3,800
Total liabilities assumed	2,042		1,517		10,946		10,946		12,988		12,463
Net assets acquired	$	28,747	$	30,544	$	51,857	$	51,717	$	80,604	$	82,261

The above estimated fair values of the assets acquired and liabilities assumed are provisional and based on the information that was available as of the acquisition date and updated for any changes as of March 31, 2016. The fair values reflected are subject to change and such changes could be significant. The Company is gathering additional information necessary to finalize the estimated fair values of the net assets presented.

For NavigationArts, intangible assets were adjusted to reflect the results of a preliminary valuation report obtained as well as certain adjustments were made to goodwill and deferred tax liability as a result of the 338(h)(10) election to treat NavigationArts acquisition as an asset purchase for tax purposes, increasing net assets acquired by $1,797. For AGS, due to the working capital true up adjustment, goodwill and the net assets acquired decreased by $140 and bank loans and other long-term liabilities were separated out of accrued expenses with no impact on the net assets acquired.

The following table presents the estimated fair values and useful lives of intangible assets acquired from NavigationArts and AGS:



	NavigationArts			AGS
	Weighted Average Useful Life (in years)	Amount		Weighted Average Useful Life (in years)	Amount
Customer relationships	10	$	2,800	10	$	10,000
Total		$	2,800		$	10,000

As of March 31, 2016, NavigationArts and AGS have been significantly integrated into the Company and as such, it is not possible to precisely report their individual post-acquisition results of operations. Pro forma results of operations for these acquisitions have not been presented because the effects of the acquisitions are not material to the Company’s consolidated results of operations, individually or in the aggregate.