Acquisitions

12 Months Ended

Dec. 31, 2019

The Company made no acquisitions in 2019.

2018 Acquisitions

Picatic

In August 2018, the Company acquired Picatic e-Ticket Inc. (Picatic), a Canadian ticketing company, primarily to bolster its engineering staff and enhance its ticketing solutions. The acquisition of Picatic has been accounted for as a business combination. The acquisition date fair value of the consideration transferred was $2.9 million, which consisted of $1.3 million in cash and 81 thousand shares of the Company’s Class B common stock. Acquisition costs directly related to the Picatic transaction were $0.3 million and are included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2018.

Ticketea

In April 2018, the Company acquired Ticketea S.L. (Ticketea), a leading Spanish ticketing provider, primarily to enhance its ticketing solutions and expand in the Spanish market. The acquisition of Ticketea has been accounted for as a business combination. The acquisition date fair value of the consideration transferred was $11.4 million, which consisted of $3.6 million in cash and 0.7 million shares of the Company’s Class B common stock. Of the 0.7 million shares, 0.1 million shares were held in escrow for adjustments related to working capital requirements and breaches of representations, warranties and covenants. These escrowed shares were released in October 2019, net of adjustments. Acquisition costs directly related to the Ticketea transaction were $0.5 million and are included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2018.

The total purchase price of the Picatic and Ticketea acquisitions was allocated to the assets acquired and liabilities assumed based on their fair value as of the acquisition date. The excess of the purchase price over the net assets acquired was recorded as goodwill. The goodwill recorded in connection with the Picatic Ticketea acquisitions is not deductible for tax purposes and is attributable to the assembled workforce and synergies from the future growth and strategic advantages in the ticketing industry.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the respective acquisition dates (in thousands):


	Picatic		Ticketea		Total
Cash	$	160	$	17,852	$	18,012
Funds and accounts receivable	10		1,058		1,068
Creator advances	—		532		532
Prepaid expenses and other current assets	87		94		181
Property and equipment	—		42		42
Other noncurrent assets	—		28		28
Accounts payable, creators	—		(19,671)		(19,671)
Other current liabilities	(121)		(529)		(650)
Intangible assets	507		3,094		3,601
Goodwill	2,219		8,937		11,156
Total purchase price	$	2,862	$	11,437	$	14,299

The following table sets forth the components of identifiable intangible assets acquired (in thousands) and their estimated useful lives (in years) as of the date of acquisition:


	Picatic		Estimated useful life	Ticketea		Estimated useful life
Customer relationships	$	507	2.5	$	2,475	5.0
Developed technology	—			619		1.0
Total acquired intangible assets	$	507		$	3,094

2017 Acquisitions

Ticketfly

In September 2017, the Company acquired 100% of the outstanding equity of Ticketfly, LLC (Ticketfly), a San Francisco based subsidiary of a publicly-held company. The Company acquired Ticketfly in order to expand the Company’s solutions for music-related events. The acquisition of Ticketfly has been accounted for as a business combination. The acquisition date fair value of the consideration transferred was $201.1 million, which consisted of $151.1 million in cash and $50.0 million in Convertible Promissory Notes (Promissory Note), which were paid and issued, respectively, at the closing of the transaction. The Promissory Note had a five year maturity from the date of issuance and bore interest at a rate of 6.5% per annum. Acquisition costs related to the Ticketfly transaction were $0.5 million and are included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2017.

In March 2018, the Company reached an agreement with the seller of Ticketfly to repay the Promissory Note. The face value of $50.0 million was settled in full for $34.7 million which represented $33.0 million of principal and $1.7 million of accrued interest. The Company recognized a gain of $17.0 million resulting from the extinguishment of the Promissory Note in the consolidated statements of operations for the year ended December 31, 2018. As discussed in Note 10, the Company recorded a net loss on debt extinguishment of $0.2 million for the year ended December 31, 2018.

Ticketscript

In January 2017, the Company acquired 100% of the outstanding equity of TSTM Group Limited (ticketscript), a privately-held Dutch ticketing company with operations throughout Europe. The Company acquired ticketscript in order to enhance its ticketing solutions. The acquisition of ticketscript has been accounted for as a business combination. The acquisition date fair value of the consideration transferred was $33.4 million, which consisted of $7.7 million in cash, $7.5 million in promissory notes, 2.7 million shares of the Company’s Class B common stock and options to purchase 0.3 million shares of the Company's Class B common stock. These promissory notes were allowed to be prepaid at any time and the Company repaid these promissory notes in full, including accrued interest, in August 2017. Acquisition costs related to the ticketscript transaction were $1.2 million and are included in general and administrative expenses in the consolidated statements of operations. The Company retained certain former ticketscript employees under Eventbrite employment contracts and issued options to purchase an aggregate of 0.3 million shares of Class B common stock in connection with those employment contracts. These options vest over time and compensation expense is being recorded over the associated service period.

The total purchase prices of the Ticketfly and ticketscript acquisitions were allocated to the assets acquired and liabilities assumed based on their fair value as of the acquisition date. The excess of the purchase price over the net assets acquired was recorded as goodwill. The goodwill recorded in connection with the Ticketfly acquisition is deductible for tax purposes, while the goodwill recorded in connection with ticketscript is not. Goodwill is attributable to the assembled workforce and synergies from the future growth and strategic advantages in the ticketing industry.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the respective acquisition dates (in thousands):


	Ticketfly		ticketscript		Total
Cash and restricted cash	$	23,339	$	3,492	$	26,831
Funds and accounts receivable	4,263		4,208		8,471
Creator advances	8,567		—		8,567
Prepaid expenses and other current assets	1,213		242		1,455
Property and equipment	2,619		425		3,044
Other noncurrent assets	15		238		253
Accounts payable, creators	(29,909)		(7,950)		(37,859)
Other current liabilities	(2,138)		(836)		(2,974)
Accrued taxes	(6,179)		(1,799)		(7,978)
Deferred tax liabilities	—		(2,401)		(2,401)
Intangible assets	76,300		11,800		88,100
Goodwill	123,011		26,030		149,041
Total purchase price	$	201,101	$	33,449	$	234,550

The following table sets forth the components of identifiable intangible assets acquired (in thousands) and their estimated useful lives as of the date of acquisition (in years):


	Ticketfly		Estimated useful life	ticketscript		Estimated useful life
Customer relationships	$	60,500	8.0	$	10,600	5.0
Developed technology	14,500		1.3	1,100		1.0
Trademark	1,300		1.3	100		1.0
Total acquired intangible assets	$	76,300		$	11,800