Acquisitions

2013

Clara Ehf. (“Clara”)

On April 18, 2013, we acquired substantially all of the assets and certain related liabilities of Clara, a private limited company founded in Iceland that provides a cloud-based analytics tool that allows businesses to understand, monitor and actively engage with community members within online platforms. The total purchase consideration of approximately $6.5 million was comprised entirely of cash.

The allocation of the purchase price was as follows (dollars in thousands):



				Useful Life
Current assets	$	81
Goodwill	3,161
Other intangible assets:
Core technology	2,315			5 years
Covenant not to compete	227			2 years
Customer relationships	570			3 years
Trade names	230			3 years
	3,342
Current liabilities	(96		)
Net assets acquired	$	6,488

The key factor attributable to the creation of goodwill by the transaction is the synergies created by the integration of the Clara analytics technology with our social platform, for both internal and external communities. All of the goodwill is expected to be deductible for income tax purposes.

The weighted average amortization period for all intangible assets acquired is 4.3 years.

Transaction costs of $0.2 million associated with the acquisition of Clara were expensed as incurred as a component of general and administrative expenses on our Consolidated Statements of Operations.

Clara’s results of operations have been included in our consolidated financial statements subsequent to the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material. Revenue and earnings information since the date of acquisition was not material to the current period financial statements.

StreamOnce, Inc. (“StreamOnce”)

On April 29, 2013, we acquired all of the outstanding shares of StreamOnce, whose product offers a platform that connects third-party information streams directly into our Jive Social Business Platform, integrating disparate information systems for increased productivity. The total initial purchase consideration was comprised of $4.7 million in cash and 532,952 shares of our common stock with a fair value on April 29, 2013 of $7.3 million. Of the 532,952 shares of common stock, 470,552 shares of common stock issued to certain StreamOnce employees vested over a two-year period contingent upon the continued employment of the recipients. The fair value of these shares totaled $6.4 million, and was recognized as stock-based compensation over the two-year vesting period. Additionally, during 2014, certain StreamOnce employees received additional consideration of $0.7 million, based on our sales and customer count relating to the acquired business exceeding certain thresholds over an 18-month period commencing as of the acquisition date (the “Earnout”).

We recorded a contingent consideration liability of approximately $0.6 million within other accrued liabilities in our Consolidated Balance Sheets as of the acquisition date related to the Earnout. The fair value of the liability was estimated using internal forecasts with inputs that are not observable in the market, and thus represents a Level 3 fair value measurement as defined within Note 7. The inputs in the Level 3 measurement are not supported by market activity, as they are probability assessments of expected future sales and customer count related to our acquisition of StreamOnce during the Earnout period. The Earnout was remeasured quarterly until paid, with the change being reflected as a component of research and development in our Consolidated Statements of Operations. See Note 7 for additional information.

The allocation of the purchase price was as follows (dollars in thousands):



Cash paid	$	4,667
Value of common stock issued	852
Contingent consideration	576
Total transaction consideration:	$	6,095
				Useful Life
Current assets	$	108
Goodwill	3,157
Other intangible assets:
Core technology	3,671			5 years
Covenant not to compete	459			3 years
Trade names	118			3 years
	4,248
Current liabilities	(67		)
Deferred tax liability	(1,351		)
Net assets acquired	$	6,095

The goodwill recorded in connection with the acquisition of StreamOnce is primarily related to the ability of StreamOnce to increase viral adoption of the Jive Platform within our customers by integrating their existing third-party business applications with our platform and from the expected synergies to be achieved in connection with the acquisition. None of the goodwill is expected to be deductible for income tax purposes.

The weighted average amortization period for all intangible assets acquired is 4.7 years.

In connection with the StreamOnce acquisition, a deferred tax liability of $1.4 million was established for the book and tax basis differences related to specifically identified non-goodwill intangibles. The net liability from the acquisition created an additional source of income to utilize our deferred tax assets and, therefore, a corresponding amount of the valuation allowance was released and recorded as a benefit from income taxes in 2013.

Transaction costs of $0.2 million associated with the acquisition of StreamOnce were expensed as incurred as a component of general and administrative expenses on our Consolidated Statements of Operations.

StreamOnce’s results of operations have been included in our Consolidated Financial Statements subsequent to the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material. Revenue and earnings information since the date of acquisition was not material to the current period financial statements.