Business Combinations

6 Months Ended

Jun. 30, 2019

BUSINESS COMBINATIONS

The following business combinations have been accounted for as acquisitions in accordance with ASC 805, Business Combinations. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date with the excess recorded as goodwill. Acquisition related transaction costs are not included as a component of consideration transferred but are accounted for as an expense in the period in which the costs are incurred and have been included in general and administrative expenses in the condensed consolidated statement of operations.

Workpop Inc.

On September 10, 2018, the Company completed the acquisition of Workpop Inc. (“Workpop”), a privately held company. Workpop is a robust web and mobile solution for candidates and hiring managers in service-based industries. The acquisition was completed pursuant to a merger whereby Workpop became a wholly-owned subsidiary of the Company. In connection with the merger, the Company paid cash consideration of $18.2 million. Acquisition-related transaction costs were $0.5 million.

The Company had a $0.5 million cost basis investment in Workpop prior to the acquisition. As part of the acquisition of Workpop, the Company received a return of our investment with an immaterial loss, which was included in general and administrative expenses in the condensed consolidated statement of operations.

The Company’s allocation of the total purchase price consideration as of September 10, 2018 is summarized below (in thousands):



	Fair Value
Cash and cash equivalents	$	115
Other assets	68
Intangible assets - developed technology	7,500
Goodwill	10,525
Total purchase price	$	18,208

The intangible assets related to developed technology are amortized on a straight-line basis over 3 years.

Pro forma results of operations have not been presented as the impact of the acquisition is not material to our financial results.

Grovo Learning, Inc.

On November 9, 2018, the Company completed the acquisition of Grovo Learning, Inc. (“Grovo”), a privately held company. Grovo helps learning and development teams engage employees and drive their business forward by delivering an evolving library of customizable Microlearning® content. The acquisition was completed pursuant to a merger whereby Grovo became a wholly-owned subsidiary of the Company in exchange for cash consideration of $22.9 million. The Company acquired Grovo to expand its Cornerstone Content Anytime subscription offerings which are accessed through the Cornerstone Learning suite. Acquisition-related transaction costs were $0.6 million.

The Company’s allocation of the total purchase price consideration as of November 9, 2018 is summarized below (in thousands):



	Fair Value
Cash and cash equivalents	$	508
Accounts receivable	761
Property and equipment, net	51,967
Other current and non-current assets	1,001
Intangible assets - content library	4,700
Intangible assets - developed technology	2,500
Goodwill	11,034
Facility financing obligation	(46,100		)
Accounts payable, accrued expenses, and other liabilities, current and non-current	(3,465		)
Net assets acquired	$	22,906

The Company acquired a property lease and related leasehold improvements whereby it was deemed, for accounting purposes only, to be the owner of the entire project. In connection with the Company’s accounting for this transaction in 2018, the Company capitalized $51.1 million as a build-to-suit property within property and equipment, net, and recognized a corresponding facility financing obligation for $46.1 million. However, due to the adoption of the new lease standard ASU 2016-02 as of January 1, 2019, the build-to-suit property, exclusive of leasehold improvements of $5.0 million, and related facility financing obligation were de-recognized. Refer to Note 1 - Organization and Summary of Significant Accounting Policies above and Note 13 - Leases below for further information.

The fair value of the acquired assets is amortized on a straight-line basis over their expected useful lives.



	Useful Life
Property and equipment, net	25 years
Intangible assets - content library	6 years
Intangible assets - developed technology	3 years

Pro forma results of operations have not been presented as the impact of the acquisition is not material to the Company's financial results.