Business Combinations

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

BRIGHT PATTERN

On October 4, 2013, the Company acquired a 54% interest in Bright Pattern, a leading provider of next generation cloud-based contact center and customer experience management solutions. The Company concurrently entered into a reseller agreement which grants Aspect the right to market and distribute Bright Pattern's products and services. The investment in Bright Pattern led to Aspect’s release of Zipwire.

The total purchase price paid by the Company was $6.7 million. The acquisition of Bright Pattern was accounted for as a purchase of a business under ASC 805 Business Combinations. Accordingly, the results of Bright Pattern have been included in the consolidated financial statements since the date of acquisition with the non-controlling interest deducted to arrive at net income. Pro forma results of operations have not been presented because the effects of the acquisition were not material to the Company's financial results.

The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on a preliminary estimate of their fair values. The excess purchase price over those values was recorded as goodwill. The factors contributing to the recognition of goodwill were based upon the Company's determination that several strategic and synergistic benefits are expected to be realized from the combination. None of the goodwill is expected to be deductible for tax purposes. The fair values assigned to tangible and intangible assets acquired and liabilities assumed were based on management's estimates and assumptions, and other information compiled by management. Purchased intangibles with finite lives will be amortized over the respective estimated useful life using a method that is based on estimated future cash flows, as the Company believes this will approximate the pattern in which the economic benefits of the asset will be utilized (approximately 5-7 years).

The total purchase price for Bright Pattern has been allocated as follows (in thousands):

Description	Amount
Current assets, including $3,541 of acquired cash	$	3,651
Goodwill	5,712
Customer relationships	690
Tradename and Trademarks	350
Technology	5,550
Total assets acquired	15,953
Current liabilities	(1,101		)
Deferred tax liabilities	(2,537		)
	12,315
Less: noncontrolling interest	(5,665		)
Net assets acquired	$	6,650

The initial allocation of the purchase price of the acquired assets and liabilities as of December 31, 2013 was based on provisional measurements of fair value as determined by management.  During the nine months ended September 30, 2014, the Company revised its assessment of the fair value of the non-controlling interest in Bright pattern, which resulted in a decrease of approximately $0.7 million to goodwill and non-controlling interest on the balance sheet and revised its estimate of deferred tax liabilities, which resulted in the recognition of $2.5 million of deferred tax liabilties and goodwill.  This adjustment has been reflected in the December 31, 2013 balances of non-controlling interest and goodwill in the accompanying condensed consolidated balance sheets.