Business Combinations

12 Months Ended

Dec. 31, 2015

Business Combinations [Abstract]

Business Combinations

Business Combinations

Acquisition of BitYota

On August 21, 2015, we acquired a team of product and development data experts with experience in large scale data processing from BitYota, a provider of data warehouse as a service, for an aggregate purchase price of approximately $12.8 million. The team will focus on developing new data-based products within our consumer segment.

We accounted for this asset acquisition as a business combination, using the acquisition method in accordance with ASC 805 Business Combinations. We reviewed all identifiable tangible and intangible assets acquired and determined that any fair value was immaterial based on the information available as of the acquisition date. As a result we preliminarily determined that the entire purchase price of acquired assets will be assigned to goodwill within our consumer segment, as the primary asset acquired was the assembled workforce, a team with expertise in the development of data-based products, who could use their ability to develop new products within our consumer segment. The goodwill resulting from the acquisition of BitYota is deductible for tax purposes. We expect to finalize the valuation as soon as practicable, but no later than one year from the date of acquisition.

Acquisition related costs recognized for the year ended December 31, 2015 amounted to $3.1 million, which we have classified in technology and development and general and administrative expenses in our condensed consolidated statements of operations. Transaction costs included expenses such as signing bonuses, legal, accounting, and other professional services.

Had the acquisition of assets from BitYota occurred on January 1, 2014, our pro forma consolidated revenue for the year ended December 31, 2015 and 2014, would have increased by less than 0.1%.

Acquisition of Lemon

In December 2013, we acquired Lemon, a mobile wallet innovator. In connection with this acquisition, we launched our new LifeLock mobile application. The aggregate purchase price consisted of approximately $42.4 million of cash paid at the closing (net of cash acquired of $3.3 million). We accounted for this acquisition using the acquisition method. Accordingly, we allocated the total purchase price to the tangible and identifiable intangible assets acquired and the net liability assumed based on their respective fair values on the acquisition date. As a result of the acquisition, we recorded goodwill in the amount of $29.9 million, which was assigned to our consumer segment, identifiable intangible assets of $3.9 million, which was comprised of $3.3 million related to technology, $0.5 million related to customer relationships, and $0.1 million related to trade name and trademarks, and net assets acquired of $3.2 million. The overall weighted-average life of the identifiable definite-lived intangible assets acquired was 6.0 years, which will be amortized over their respective lives. In the fourth quarter of 2015, we changed the estimated useful life of the technology intangible assets from an original estimated life of seven years to an estimated life of two and a half years based on the development of new technology and future business plans. Accordingly, the overall weighted-average useful life of the identifiable definite-lived intangible assets acquired was reduced to 2.3 years. Our consolidated financial statements for the year ended December 31, 2013 include the results of operations of Lemon from the date of acquisition.