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ACQUISITIONS
 12 Months Ended
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]  
ACQUISITIONS ACQUISITIONS PolSource — On April 2, 2021, the Company acquired 100% of PolSource S.A. and its subsidiaries (“PolSource”), a Salesforce Platinum Consulting Partner with more than 350 experienced Salesforce specialists for a purchase price of $148.2 million including contingent consideration with an acquisition-date fair value of $35.4 million. At the time of the acquisition, the Company committed to paying up to $45.0 million in contingent consideration, subject to attainment of certain revenue, earnings and operational targets.
CORE — On July 23, 2021, the Company acquired 100% of CORE SE and its subsidiaries (“CORE”), a professional service provider specializing in IT strategy and technology-driven transformations with office locations in Europe and the Middle East for a purchase price of $50.2 million including contingent consideration with an acquisition-date fair value of $4.0 million and deferred consideration of $7.8 million. The Company could pay up to $8.1 million in contingent consideration and the actual future payout is subject to attainment of certain revenue, earnings and operational targets.
Emakina — On November 3, 2021, the Company completed the acquisition of 98.69% of Emakina Group SA and its subsidiaries (“Emakina”), a group of independent digital agencies, for a purchase price of $143.4 million in cash. On November 30, 2021, the Company completed the acquisition of the remaining 1.31% of Emakina Group SA’s outstanding shares for a purchase price of $1.7 million in cash.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of each respective acquisition and updated for any changes as of December 31, 2022:
PolSourceCOREEmakina
Cash and cash equivalents$2,565 $11,283 $5,142 
Trade receivables and contract assets12,734 10,266 34,389 
Prepaid and other current assets814 5,430 3,109 
Goodwill125,265 24,194 139,417 
Intangible assets15,790 8,368 30,488 
Property and equipment and other noncurrent assets461 4,585 16,802 
Total assets acquired$157,629 $64,126 $229,347 
Accounts payable, accrued expenses and other current liabilities$5,337 $9,336 $37,469 
Short-term debt— — 13,657 
Long-term debt— — 8,874 
Operating lease liabilities, noncurrent157 2,056 5,541 
Other noncurrent liabilities3,963 2,525 9,319 
Total liabilities assumed$9,457 $13,917 $74,860 
Noncontrolling interest in consolidated subsidiaries— — 10,469 
Net assets acquired$148,172 $50,209 $144,018 
During the year ended December 31, 2022, the Company completed the purchase price allocation for the acquisitions of PolSource, CORE, and Emakina and the estimated fair values of the assets acquired and liabilities assumed have been finalized. The effect of adjustments recorded during the year ended December 31, 2022 that would have been recognized in a prior period if the adjustment to the preliminary amounts had been recognized as of the acquisition date of each respective acquisition was not material.
The following table presents the estimated fair values and useful lives of intangible assets acquired from PolSource, CORE and Emakina as of the date of each respective acquisition and updated for any changes as of December 31, 2022:
PolSourceCOREEmakina
Weighted Average Useful Life (in years)AmountWeighted Average Useful Life (in years)AmountWeighted Average Useful Life (in years)Amount
Customer relationships6$14,790 6$7,779 7$27,822 
Trade names31,000 5589 32,666 
Total$15,790 $8,368 $30,488 
The goodwill recognized as a result of the PolSource acquisition is attributable to synergies expected to be achieved by combining the businesses of EPAM and PolSource, expected future contracts, the assembled workforce acquired and other factors. The goodwill recognized as a result of the CORE acquisition is attributable to synergies expected to be achieved by expanding the Company’s ability to support customers as a strategic consultant in Europe and the Middle East, expected future contracts, the assembled workforce acquired and other factors. The goodwill recognized as a result of the Emakina acquisition is attributable to synergies expected to be achieved by enhancing EPAM’s digital experience practice as well as augmenting offerings in digital design and engineering capabilities, expected future contracts, the assembled workforce and other factors.
The goodwill acquired as a result of the PolSource, CORE and Emakina acquisitions is not expected to be deductible for income tax purposes.
During the year ended December 31, 2021, the Company recognized acquisition-related costs associated with the PolSource, CORE and Emakina acquisitions totaling $1.4 million, $1.2 million and $1.0 million, respectively. Acquisition-related costs incurred during the years ended December 31, 2022 and 2020 were not material. These costs are included in Selling, general and administrative expenses in the accompanying consolidated statements of income.
Revenues generated by PolSource, CORE and Emakina included in the Company’s consolidated statement of income totaled $55.0 million, $14.1 million and $24.7 million during the year ended December 31, 2021, respectively. Pro forma results of operations have not been presented because the effect of these acquisitions on the Company’s consolidated financial statements was not material individually or in the aggregate.
2020 Acquisitions — During the year ended December 31, 2020, the Company completed two acquisitions with an aggregate purchase price of $22.5 million including contingent consideration with an aggregate acquisition-date fair value of $5.3 million. The Company committed to making contingent consideration payments with a maximum aggregate amount payable of $18.6 million subject to attainment of specified performance targets in the first and second calendar years after the respective acquisition dates. These acquisitions increased EPAM’s software and service capabilities and expanded EPAM’s offerings in financial services as well as added $7.3 million of intangible assets, consisting mainly of customer relationships. Revenues generated by these acquisitions totaled $6.0 million for the year ended December 31, 2020. Pro forma results of operations have not been presented because the effect of these acquisitions on the Company’s consolidated financial statements was not material individually or in the aggregate.
Other 2021 Acquisitions — During the year ended December 31, 2021, the Company completed four additional acquisitions with an aggregate purchase price of $65.2 million including contingent consideration with an acquisition-date fair value of $17.6 million. The Company could pay up to $30.2 million in contingent consideration and the actual future payouts are subject to attainment of specified performance targets during the periods ranging from 12 months to 48 months after the respective acquisition dates. These acquisitions increased EPAM’s e-platform offerings and expanded the Company’s geographical reach as well as added $14.1 million in intangible assets, consisting mainly of customer relationships. Revenues generated by these Other 2021 Acquisitions totaled $19.5 million during the year ended December 31, 2021. Pro forma results of operations have not been presented because the effect of these acquisitions on the Company’s consolidated financial statements was not material individually or in the aggregate.
2022 Acquisitions — During the year ended December 31, 2022, the Company completed two acquisitions with a total purchase price of $13.6 million including contingent consideration with total acquisition-date fair value of $2.6 million. These acquisitions expanded EPAM’s capabilities to deliver end-to-end solutions for designing and building sophisticated commerce platforms, provided opportunities for geographic expansion as well as added $3.4 million of intangible assets, consisting of customer relationships. Revenues generated by these 2022 Acquisitions totaled $8.7 million during the year ended December 31, 2022. Pro forma results of operations have not been presented because the effect of these acquisitions on the Company’s consolidated financial statements was not material individually or in the aggregate.