Note 3. Business Combination

On May 3, 2017, the Company acquired substantially all of the issued and outstanding capital stock held by shareholders of Trade Extensions TradeExt AB (“Trade Extensions”), a Swedish corporation. The acquisition enabled the Company to broaden its cloud platform for business spend, particularly in the area of strategic sourcing.

The acquisition was accounted for as a business combination and, accordingly, the total fair value of purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values on the acquisition date. Upon the closing of the acquisition, the Company paid aggregate consideration of approximately $40.9 million in cash, of which $7.2 million is being held in escrow for 18 months after the transaction closing date. In addition, approximately $4.1 million in the form of 148,476 shares of the Company’s common stock was issued to certain key employees of Trade Extensions, which stock is subject to service vesting conditions including continued employment with the Company and were unvested at October 31, 2017. The value assigned to the common stock issued will be recorded as post-acquisition compensation expense and has been excluded from the purchase consideration.

The major classes of assets and liabilities to which we have allocated the fair value of purchase consideration were as follows: (in thousands):

	May 3, 2017
Cash and cash equivalents	$	2,016
Accounts receivable		1,172
Intangible assets		12,960
Other assets		2,086
Goodwill		30,840
Accounts payable and other liabilities		(8,125	)
Total consideration	$	40,949

Other assets includes indemnification assets totaling $1.4 million due to assumed liability for which the seller is responsible. The goodwill recognized was primarily attributed to increased synergies that are expected to be achieved from the integration of Trade Extensions and is not expected to be deductible for income tax purposes. The Company determined the fair values of intangible assets acquired with the assistance of third party valuation consultants. Based on this valuation, the intangible assets acquired are (in thousands):

	Fair Value		Weighted Average Amortization Period (in Years)
Developed technology	$	9,700	7
Customer relationships		3,100	5
Trademarks		160	1
Total intangible assets	$	12,960

The Company incurred costs related to this acquisition of approximately $526,000 for the nine months ended October 31, 2017. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations.

The revenue and earnings of Trade Extensions have been included in the Company’s results since the acquisition date and are not material to the Company’s consolidated financial results. Pro forma results of operations for this acquisition have not been presented as the financial impact to the Company’s condensed consolidated financial statements would be immaterial.