Business Combinations

12 Months Ended

Dec. 31, 2015

Acquisition

Business Combinations

2. Business Combinations

Fiscal 2014

        On December 22, 2014 the Company completed an acquisition. Consideration totaled approximately $5.0 million and consisted of 141,074 shares of common stock of the Company valued at the closing market price of $33.71 and $0.2 million of cash. The Company has included the financial results of this company in its consolidated financial statements from the closing date of the acquisition. The Company has accounted for this transaction as a business combination. Based on the purchase price allocation, the Company recorded $1.6 million of acquired intangible assets with a useful life of three years, $3.2 million in goodwill, $0.5 million in net tangible assets including cash and $0.3 million of deferred tax liabilities. Additionally, the Company granted 146,762 time-based RSUs and 42,932 performance-based RSUs, which were valued at approximately $6.4 million on the grant date. See Note 9, "Stockholder's Equity and Stock Based Compensation" for more details regarding the performance-based RSUs.

Fiscal 2013

Insightera

        On December 19, 2013, the Company completed its acquisition of Insightera Ltd. (Insightera), a company organized under the laws of the State of Israel. Insightera, a SaaS company, provides a platform that allows its customers to track and compile data about users visiting their internet websites with the purpose of displaying the website information which is personalized in response to the data.

        As a result of the acquisition, the Company acquired all of the issued and outstanding shares of Insightera, and Insightera became a wholly owned subsidiary of the Company. Consideration consisted of $9.8 million of cash and 427,761 shares of common stock of the Company valued at the closing market price of $32.89. Of the issuable shares, 137,252 shares of the Company's common stock are held in escrow and are expected to be released from escrow no later than 18 months from the closing of the acquisition. Additionally, these employees were also granted 139,464 RSUs valued at approximately $6.1 million in January 2014.

        The acquisition was accounted for using the acquisition method of accounting under which assets and liabilities of Insightera were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.

        During fiscal 2013, the Company incurred $0.7 million in transaction costs related to the acquisition, which primarily consisted of legal, accounting and valuation-related expenses. These expenses were recorded in general and administrative expense in the accompanying Consolidated Statements of Operations and Comprehensive Loss. Additionally, the Company incurred approximately $0.2 million in costs associated with registering the common stock issued in connection with the acquisition. These costs have been recorded as a reduction in additional paid in capital.

        The total purchase price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date of the acquisition based upon their respective fair values. The purchase price allocation is as follows:

	Purchase Price Allocation
	(in thousands)
Tangible assets:
Cash and cash equivalents	$	3,624
Accounts receivable		46
Other current assets		60
Property and equipment		71
Other assets		13
Total tangible assets		3,814
Liabilities assumed:
Accounts payable and accrued liabilities		(391	)
Deferred revenues		(116	)
Other long-term liabilities		(27	)
Total liabilities assumed		(534	)
Deferred tax liability		(374	)
Intangible assets		4,600
Goodwill		16,404
Total purchase price	$	23,910

        Each component of identifiable intangible assets acquired in connection with the above acquisition is as follows:

	Estimated Useful Life		Amount
	(in years)		(in thousands)
Developed technology		4	$	3,650
Domain names		3		250
Customer relationships		3		700
Total intangible assets			$	4,600

        Pro forma results of operations have not been presented because the effect of this acquisition was not material to the consolidated financial statements.