ACQUISITIONS

Continuum — On March 15, 2018, the Company acquired all of the outstanding equity of Continuum Innovation LLC together with its subsidiaries (“Continuum”) to enhance the Company’s consulting capabilities as well as its digital and service design practices. Continuum, headquartered in Boston with offices located in Milan, Seoul, and Shanghai, focuses on four practices including strategy, physical and digital design, technology and its Made Real Lab. The acquisition of Continuum added approximately 125 design consultants to the Company’s headcount.

In connection with the Continuum acquisition, the Company paid $52,515 as cash consideration, of which $5,410 was placed in escrow for a period of 9 to 15 months as security for the indemnification obligations of the sellers under the terms of the equity purchase agreement. Furthermore, subject to attainment of specified performance targets in the 12 months after the acquisition, the Company will make a cash earnout payment with a maximum amount payable of $3,135. The Company recorded $2,400 related to this earnout payment as contingent consideration as of the acquisition date. During the three months ended September 30, 2018, the Company recorded a $900 reduction to the fair value of the contingent consideration (Note 4 “Fair Value Measurements”).

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed in connection with the acquisition of Continuum as originally reported and as adjusted as of September 30, 2018:



	As Originally Reported		As Adjusted
Cash and cash equivalents	$	2,251	$	2,251
Accounts receivable	6,676		6,676
Unbilled revenues	2,463		2,463
Prepaid and other current assets	942		942
Goodwill	29,805		26,693
Intangible assets	16,600		14,450
Property and equipment and other noncurrent assets	8,902		8,902
Total assets acquired	$	67,639	$	62,377
Accounts payable, accrued expenses and other current liabilities	$	2,991	$	2,751
Due to employees	1,001		1,001
Long-term debt (Note 6)	3,220		3,220
Other noncurrent liabilities	5,412		490
Total liabilities assumed	$	12,624	$	7,462
Net assets acquired	$	55,015	$	54,915

During the three months ended September 30, 2018, the Company updated the valuation of the acquired intangible asset related to a favorable lease decreasing its value by $400. This adjustment resulted in a corresponding increase in the value of acquired goodwill. The effect of the adjustment recorded during the three months ended September 30, 2018 that would have been recognized in a prior period if the adjustment to the preliminary amounts had been recognized as of the acquisition date was not material. The Company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

The following table presents the estimated fair values and useful lives of intangible assets acquired in connection with the acquisition of Continuum:



	Continuum
	Weighted Average Useful Life (in years)	Amount
Customer relationships	6.5	$	5,800
Favorable lease	11.2	5,500
Contract royalties	8	1,900
Trade names	5	1,250
Total		$	14,450

The goodwill recognized as a result of the Continuum acquisition is attributable primarily to strategic and synergistic opportunities related to the consulting business, the assembled workforce of Continuum and other factors. The goodwill is expected to be deductible for income tax purposes.

Revenues generated by Continuum totaled $8,472 and $18,696 during the three and nine months ended September 30, 2018. Pro forma results of operations have not been presented because the effect of the Continuum acquisition on the Company’s condensed consolidated financial statements was not material.