4. Acquisition

On March 19, 2012, we acquired all of the outstanding shares of Bitstream Inc. in an all cash merger for approximately $49.6 million. The Company used approximately $22.0 million in cash and borrowed $25.0 million from its revolving Credit Facility. We have recorded $2.6 million in restricted cash at March 31, 2012, which represents the portion of the purchase price for Bitstream's shareholders who have not yet tendered their shares. We expect disbursement of substantially all of these funds within the next three to six months. The Agreement and Plan of Merger ("Merger Agreement") dated November 10, 2011 is by and among the Company, Bitstream and Birch Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of the Company (the "Merger Subsidiary"). In accordance with the Merger Agreement, the Merger Subsidiary was merged with and into Bitstream, terminating the separate corporate existence of the Merger Subsidiary, with Bitstream continuing as the surviving corporation of the merger and a wholly-owned subsidiary of the Company. In accordance with the Merger Agreement, on March 14, 2012 Bitstream spun off its mobile browsing and variable data publishing businesses into a separate entity.

Bitstream Inc., a Delaware corporation, and its wholly owned subsidiary, Bitstream India Pvt. Ltd., became wholly-owned subsidiaries of Monotype Imaging Holdings Inc. following the acquisition. Included in the acquisition is the MyFonts.com^sm website, featuring 89,000 fonts from nearly 900 foundries, in addition to the widely used WhatTheFont^sm identification service. The transaction also includes the Bitstream^® typeface library, Font Fusion^® and Bitstream Panorama™ font rendering and layout technologies, a range of fonts for embedded and mobile environments, and 10 patents. Thirteen employees from Bitstream's U.S. operations and 42 engineers and type designers from Bitstream's India operations have joined the Company in connection with the acquisition.

The results of operations of Bitstream have been included in our consolidated financial statements since the date of acquisition and all intercompany balances have been eliminated. The total purchase price was allocated as follows:


	Estimated Fair Value At Acquisition Date (in thousands)
Cash, accounts receivable and other assets	$	969
Deferred tax asset, short term		1,830
Goodwill		31,573
Intangible assets		21,900
Deferred tax asset, long term		3,721
Accrued expenses and deferred revenue		(2,461	)
Deferred tax liability, long term		(7,960	)

Total purchase price	$	49,572

The estimated fair value of intangible assets acquired were preliminarily recorded as follows:


	Estimated Fair Value At Acquisition Date (in thousands)		Estimated Useful Life (In Years)
Customer relationships		7,410	10-15
Technology		9,230	7-10
Trademarks		5,260	Indefinite

Total intangible assets	$	21,900

The amounts presented in both of the tables above are preliminary and are subject to change until the acquisition accounting is finalized. The goodwill reflects the value of the assembled workforce and the synergies we expect to realize from the Bitstream acquisition. Since we purchased the Bitstream legal entity, the goodwill and amortization of intangible assets are not deductible for tax purposes. The deferred tax assets acquired are primarily from Bitstream's net operating loss carryforwards, which we expect to utilize going forward. The acquired finite-lived intangible assets will be amortized over their respective useful lives, on a straight-line basis.