Acquisition

6 Months Ended

Jun. 30, 2019

Intermedix Holdings, Inc.

On May 8, 2018, the Company completed the acquisition of Intermedix. The Acquisition has been accounted for under ASC 805, Business Combinations. Accordingly, the accounts of the acquired company, after adjustments to reflect fair values assigned to assets and liabilities, have been included in the Company’s consolidated financial statements since the date of the Acquisition. The purchase price for the Acquisition was $469.2 million.

The final fair value of assets acquired and liabilities assumed is (in millions):




	Purchase Price Allocation
Total purchase consideration	$	469.2

Allocation of consideration to assets acquired and liabilities assumed:
Cash, cash equivalents, and restricted cash	$	6.4
Accounts receivable, net	35.5
Prepaid expenses and other current assets	11.6
Property, equipment and software, net	25.4
Intangible assets, net	191.1
Goodwill	253.2
Other assets	0.3
Accounts payable	(6.4		)
Current portion of customer liabilities	(8.6		)
Accrued compensation and benefits	(7.7		)
Other accrued expenses	(6.2		)
Deferred income tax liabilities	(25.4		)
Net assets acquired	$	469.2

The goodwill recognized is primarily attributable to synergies that are expected to be achieved from the integration of Intermedix. None of the goodwill is expected to be deductible for income tax purposes.

Measurement period adjustments

The Company had various measurement period adjustments due to tax return information and additional knowledge gained since December 31, 2018. The significant adjustments included a reduction of deferred income tax liabilities of $1.7 million related to updated tax return information.

Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of the Company as though the Acquisition had occurred as of January 1, 2017. These pro forma results are not necessarily indicative of either the actual consolidated results had the Acquisition occurred as of January 1, 2017 or of the future consolidated operating results. Pro forma results are (in millions):



	Three Months Ended			Six Months Ended
	June 30, 2018			June 30, 2018
Net services revenue	$	229.9		$	425.7
Net income (loss)	$	(1.8	)	$	(29.1	)

Adjustments were made to earnings to adjust depreciation and amortization to reflect fair value of identified assets acquired, to record the effects of extinguishing the debt of Intermedix and replacing it with the debt of the Company, and to record the income tax effect of these adjustments.