16. Acquisitions and Dispositions

Acquisitions

We account for acquisitions of businesses using the purchase method of accounting where the cost is allocated to the underlying net tangible and intangible assets acquired, based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

Determining the fair value of certain acquired assets and liabilities is subjective in nature and often involves the use of significant estimates and assumptions, including, but not limited to, the selection of appropriate valuation methodology, projected revenue, expenses and cash flows, weighted average cost of capital, discount rates and estimates of terminal values.

During the years ended December 31, 2019 and 2018, we acquired businesses consistent with our plan of acquiring, consolidating and developing marketplaces and media properties. In addition to identifiable assets acquired in these business combinations, our goodwill primarily derives from the ability to generate synergies across our businesses.

Year ended December 31, 2019

On February 1, 2019, pursuant to an Asset Purchase Agreement, we acquired substantially all of the assets of Only In Your State, LLC (“Only In Your State”), including its website that focuses on local attractions and local tourism for total consideration of $2.0 million in cash, of which $0.1 million was held back to secure post-closing indemnification obligations.

We evaluated the acquisition of Only In Your State under ASU 2017-01, Business Combinations: Clarifying the Definition of a Business. Based on the results of the analysis performed, we determined that substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. As a result, we concluded that the acquisition of Only In Your State represents an asset acquisition and does not represent a business combination to be accounted for under ASC 805. The total purchase price of $2.0 million was allocated entirely to the trademark acquired, which has an estimated useful life of ten years.

The acquisition is included in our consolidated financial statements as of the closing date of the acquisition, which was February 1, 2019. Acquisition-related transaction costs were not material.

Year ended December 31, 2018

On June 5, 2018, we acquired 100% of the issued and outstanding membership interests of Well+Good LLC (“Well+Good”), a health and wellness media company, for an initial payment of $12.3 million in cash, comprised of a $10.0 million purchase price and an additional $2.3 million after giving effect to working capital adjustments as of the closing date. Of the aggregate $12.3 million in cash paid at closing, $0.8 million was held back to secure post-closing indemnification obligations of the sellers and/or post-closing adjustments to the purchase price. Any remaining portion of the holdback amount not subject to then-pending claims will be paid on the one year anniversary of the closing of the acquisition. In addition, we agreed to pay certain key employees/equity holders of Well+Good deferred compensation targeted at $9.0 million, payable over a three year period upon the achievement of certain operating targets through the end of the 2020 fiscal year, subject to reduction, increase and acceleration in certain circumstances. The deferred compensation is considered post-combination consideration and any estimated deferred compensation expense for future periods accrues and is included in other liabilities in our consolidated balance sheet. In February 2019, deferred compensation of $1.9 million was paid to certain key employees/equity holders of Well+Good based on fiscal year 2018 results. As of December 31, 2019, we have not accrued any expense for Well+Good deferred compensation based on the 2019 fiscal year period.

The total fair value of the purchase price for the acquisition approximated $12.3 million and was allocated to Well+Good’s tangible and intangible assets acquired and liabilities assumed, based on their fair values as of June 5, 2018, the closing date of the acquisition. The excess of the purchase price over the net assets and liabilities acquired was recorded as goodwill. The valuation of the fair value of tangible and intangible assets acquired and liabilities assumed was finalized as of December 31, 2019 and there was no material impact to the consolidated statements of operations as a result of measurement-period adjustments. Well+Good operates as part of our media segment.

The following table summarizes the allocation of the purchase price for Well+Good (in thousands):


Goodwill	$	2,332
Trademark		6,400
Customer relationships		1,150
Cash and cash equivalents		1,224
Accounts receivable		2,676
Other current assets		293
Property, plant and equipment		10
Other long-term assets		113
Trade accounts payable		(272)
Other accrued liabilities		(528)
Deferred revenue		(1,132)
Total	$	12,266

The trademark and customer relationships we acquired have estimated useful lives of ten years and two years, respectively. The estimated weighted average useful life of the intangible assets we acquired is nine years. Goodwill is primarily derived from the acquired established workforce and the estimated future synergies associated with the combined operations. The goodwill is included as part of our Media reporting unit and will be deductible for tax purposes.

The acquisition is included in our consolidated financial statements as of the closing date of the acquisition, which was June 5, 2018. For the year ended December 31, 2018, revenue generated by Well+Good subsequent to its acquisition included in our consolidated statements of operations was $8.4 million. For the year ended December 31, 2018, Well+Good generated a pre-tax loss of $1.2 million subsequent to its acquisition included in our consolidated statements of operations.

Supplemental Pro forma Information (unaudited)

Supplemental information on an unaudited pro forma basis, as if the acquisition of Well+Good had occurred on January 1, 2018, is as follows (in thousands):



	2018
Revenue	$	159,786
Net loss		(23,682)

The unaudited pro forma supplemental information is based on estimates and assumptions which we believe are reasonable and reflect amortization of intangible assets as a result of the acquisitions. The pro forma results are not necessarily indicative of the results that would have been realized had the acquisitions been consummated as of the beginning of the periods presented.