3. Acquisitions

The operating results related to our acquisitions have been included in our Consolidated Financial Statements from their respective acquisition dates. The following is a summary of our significant business and asset acquisitions.

Fiscal 2018

Asset Acquisition

On February 2, 2018, we acquired certain assets of Arvato Systems GmbH, based in Guetersloh, Germany. We acquired Arvato’s order management system, Aroma®, for $27.9 million, including contingent consideration of $8.1 million. The total purchase price may also include up to an additional $26.9 million if certain future performance conditions are met during our fiscal years 2019 through 2022. The acquired cross-channel commerce management solution, which will be marketed under the name Infor Networked Order Management, provides a wide range of benefits for our customers that complements and further expands Infor CloudSuite Retail and our supply chain management offerings. We have recorded approximately $27.9 million of identifiable intangible assets related to this acquisition of existing technology, which is being amortized over the estimated useful live of three years.

Birst

On May 31, 2017, we acquired Birst, Inc. (Birst) for $68.5 million, net of cash acquired and including contingent consideration of $0.3 million recorded at the time of the purchase (the Birst Acquisition). The total purchase price may also include up to an additional $29.7 million if certain future performance conditions are met during the 2017 and 2018 calendar years. Based in San Francisco, California, Birst is a pioneer of cloud-native, business intelligence (BI), analytics, and data visualization with approximately 260 employees and more than 300 customers worldwide. Birst is a unique, comprehensive platform for sourcing, refining, and presenting standardized data insights at scale to drive business decisions. Birst connects the entire enterprise through a network of virtualized BI instances on top of a shared common analytical fabric. Birst spans ETL (extract, transform, and load), operational reports, dashboards, semantic understanding, visualization, smart discovery, and data blending to form a rich, simplified end-to-end BI suite in the cloud. The Birst Acquisition provides Infor a cloud BI platform which will significantly expand our analytical applications. The Birst Acquisition was partially funded through new capital contributions made to an affiliate of Infor’s parent company by certain of our equity holders, an affiliate of Koch Industries, Inc. (Koch Industries), investment funds affiliated with Golden Gate Capital, and our senior executives. See Note 21, Related Party Transactions - Equity Contributions.

We have recorded approximately $31.5 million of identifiable intangible assets and $44.0 million of goodwill related to the Birst Acquisition. The acquired intangible assets relating to Birst’s trade name, existing technology, customer relationships, and acquired favorable leases are being amortized over their weighted average estimated useful lives of approximately two, four, nine, and five years, respectively. We have determined that the goodwill arising from the Birst Acquisition will not be deductible for tax purposes.

Our estimates of fair value and resulting allocation of purchase price related to the Birst Acquisition are preliminary as of April 30, 2018. We are in the process of finalizing the valuation of certain assets and liabilities, and as a result the final allocation of the adjusted purchase price may differ from the information presented in these Consolidated Financial Statements.

The Birst Acquisition was not significant for financial reporting purposes, and the related results were not material to our results for fiscal 2018. Transaction and merger-related integration costs of approximately $20.8 million associated with the Birst Acquisition were expensed as incurred and are reflected in our results of operations for fiscal 2018, in acquisition-related and other costs.

Fiscal 2017

Ciber

On March 31, 2017, we acquired certain assets of Ciber, Inc. (Ciber) related to Ciber’s business of selling and delivering professional services in connection with Infor’s software products, for $15.0 million (the Ciber Acquisition). Based in Greenwood Village, Colorado, Ciber is a longtime Infor services partner specializing in consulting and services around our HCM and financials products and has been recognized as an Infor Services Partner of the Year on multiple occasions. The Ciber Acquisition will help expand our professional service organization’s capabilities in these key solution areas by adding approximately 180 highly-skilled professionals.

We have recorded approximately $5.5 million of identifiable intangible assets and $6.7 million of goodwill related to the Ciber Acquisition. The acquired intangible assets relating to Ciber’s customer relationships are being amortized over their weighted average estimated useful lives of approximately five years. We have determined that the goodwill arising from the Ciber Acquisition will be deductible for tax purposes.

Accentia

On March 13, 2017, we acquired Accentia Middle East (Accentia), a longtime Infor services partner and exclusive reseller and provider of consulting services across the Middle East, North Africa, and India, for $17.7 million, net of cash acquired (the Accentia Acquisition). Based in Cairo, Egypt, Accentia has approximately 80 employees, additional offices in Dubai (UAE), Jeddah (Saudi Arabia), Tunis (Tunisia), and Pune (India), and customers in 17 countries across the region. Accentia has significant expertise in the local market and specializes in Infor M3, our comprehensive, centralized ERP solution for medium to large enterprises in the manufacturing, distribution, and equipment industries. The Accentia Acquisition significantly expanded Infor’s presence in the region.

We have recorded approximately $5.5 million of identifiable intangible assets and $12.3 million of goodwill related to the Accentia Acquisition. The acquired intangible assets relating to Accentia’s customer relationships are being amortized over their weighted average estimated useful lives of approximately seven years. We have determined that a portion of the goodwill arising from the Accentia Acquisition will be deductible for tax purposes.

Starmount

On August 2, 2016, we acquired Starmount, Inc. (Starmount) for $62.1 million, net of cash acquired and including contingent consideration of $9.7 million recorded at the time of the purchase (the Starmount Acquisition). Included in the purchase price is $23.4 million of deferred consideration, which reflects the present value of a deferred payment of $25.0 million which was paid on the first anniversary of the closing date of the Starmount Acquisition. The total purchase price may also include up to an additional $10.3 million if certain future performance conditions are met. Based in Austin, Texas, Starmount is a modern store systems provider serving large and mid-market retailers. Starmount is an innovative mobile-first company providing point-of-sale, mobile shopping assistant, and store inventory management products along with a data-rich commerce hub to engage shoppers, streamline operations, and support consistent cross-channel customer interactions. The Starmount Acquisition enabled us to accelerate delivery of our Infor CloudSuite Retail suite of enterprise applications.

We have recorded approximately $15.1 million of identifiable intangible assets and $47.7 million of goodwill related to the Starmount Acquisition. The acquired intangible assets relating to Starmount’s trade name, existing technology and customer relationships are being amortized over their weighted average estimated useful lives of approximately one, seven and nine years, respectively. We have determined that the goodwill arising from the Starmount Acquisition will not be deductible for tax purposes.

Predictix

On June 27, 2016, we acquired the remaining issued and outstanding capital stock in LogicBlox-Predictix Holdings, Inc., for approximately $125.5 million, net of cash acquired (the Predictix Acquisition). This is in addition to the 16.67% equity interest we acquired in the third quarter of fiscal 2016 for $25.0 million. See Note 2, Summary of Significant Accounting Policies - Cost Method Investments. Based in Atlanta, Georgia, Predictix is a provider of cloud-native, predictive, and machine-learning solutions for retailers. Predictix uses next-generation data science and big data analytics to help solve some of the most complex and challenging problems faced by retailers today. The Predictix Acquisition complemented and further expanded offerings under Infor CloudSuite Retail, our suite of enterprise applications delivered in the cloud and designed for today’s retailing landscape. The merger consideration was partially funded through a new capital contribution made to Infor’s parent company by its current equity holders, investment funds affiliated with Golden Gate Capital and investment funds affiliated with Summit Partners. See Note 21, Related Party Transactions- Equity Contributions.

We have recorded approximately $37.0 million of identifiable intangible assets and $118.8 million of goodwill related to the Predictix Acquisition. The acquired intangible assets relating to Predictix’ existing technology and customer relationships are being amortized over their weighted average estimated useful lives of approximately five and twelve years, respectively. We have determined that the goodwill arising from the Predictix Acquisition will not be deductible for tax purposes.

Merit

On May 11, 2016, we acquired Merit Globe AS (Merit) for $22.1 million, net of cash acquired and including contingent consideration of $7.5 million recorded at the time of the purchase (the Merit Acquisition). The total purchase price may also include up to an additional $4.5 million if certain future performance conditions are met. Based in Norway, Merit is a consulting firm specializing in Infor M3 products and services with approximately 250 employees and more than 500 customers in 22 countries, with a concentration in Europe. The Merit Acquisition brings decades of experience of Infor M3 consulting services that expanded and enhanced Infor’s professional services’ capabilities, particularly in the large and growing European Infor M3 customer base.

We have recorded approximately $9.0 million of identifiable intangible assets and $19.0 million of goodwill related to the Merit Acquisition. The acquired intangible assets relating to Merit’s trade name, existing technology and customer relationships are being amortized over their weighted average estimated useful lives of approximately two, two and eight years, respectively. We have determined that the goodwill arising from the Merit Acquisition will not be deductible for tax purposes.

Fiscal 2016

On September 18, 2015, we acquired a majority ownership stake of 81.48% in GT Nexus, for $549.9 million, net of cash acquired (the GT Nexus Acquisition). GT Nexus is a cloud-based supply chain management vendor based in Oakland, California. GT Nexus is the cloud platform that some of the world’s largest companies, across many sectors, including manufacturing and retail, use to monitor and orchestrate their global supply chains including automation of sourcing, trade finance and logistics operations. The GT Nexus Acquisition complemented and further expanded our global SCM offerings. The results of operations of GT Nexus have been included in our results of operations from the date of the GT Nexus Acquisition.

The total consideration for the GT Nexus Acquisition was funded through the issuance of our 5.75% senior secured notes due 2020 (see Note 12, Debt – Senior Secured Notes), together with cash on hand and equity issued to certain shareholders and management of GT Nexus. Transaction and merger related integration costs of $14.6 million associated with the GT Nexus Acquisition were expensed as incurred and are reflected in our results of operations for fiscal 2016, in acquisition-related and other costs. In addition, in fiscal 2016, we took certain actions relating to GT Nexus’ operations to eliminate redundancies, improve our operational efficiency and reduce our operating costs. We may take additional actions in future periods related to GT Nexus as we integrate its operations. See Note 11, Restructuring Charges. The excess of the consideration transferred over the fair values of the net assets acquired and liabilities assumed was recorded as goodwill, which represents operating efficiencies expected to be realized.

The following table summarizes our allocation of the GT Nexus purchase consideration:


(in millions)
Cash	$	14.8
Accounts receivable		35.9
Other current assets		16.3
Identified intangible assets:
Existing technology		93.5
Existing customer relationships		273.5
Tradenames		5.9
Other non-current assets		9.8
Goodwill		364.4
Deferred revenue		(11.3)
Current liabilities assumed		(31.7)
Long-term liabilities assumed		(86.0)
Noncontrolling interests		(10.2)
Total fair value of net assets acquired		674.9
Less: fair value of redeemable noncontrolling interests		(125.0)
Purchase consideration	$	549.9

The acquired intangible assets relating to GT Nexus’ existing technology, existing customer relationships and tradenames are being amortized over their weighted average estimated useful lives of approximately six years, twelve years and three years, respectively. We have determined that the goodwill arising from the GT Nexus Acquisition will not be deductible for tax purposes.

The remaining 18.52% redeemable noncontrolling interest in GT Nexus included two redemption features: call options exercisable by Infor and put options exercisable by the redeemable noncontrolling interest holders. The redeemable noncontrolling interests were puttable at a redemption price of $150.0 million on the first anniversary of the acquisition date. Therefore, we were accreting the redeemable noncontrolling interests, using the effective interest method, from the acquisition date fair value to the redemption value over a one-year period. Accretion adjustments to the carrying value of the redeemable noncontrolling interests were considered deemed dividends and were recorded against additional paid-in capital.

In the second quarter of fiscal 2017 we exercised our call option pursuant to the Stock Rollover and Equity Purchase Agreement entered into in relation to the GT Nexus Acquisition, which allowed us to purchase the remaining 18.52% of GT Nexus from the holders of the redeemable noncontrolling interests in GT Nexus. We exercised the call option at a call price of $138.0 million. With our purchase of this remaining interest, GT Nexus became a wholly owned subsidiary of the Company. Accordingly, we did not present the redeemable noncontrolling interest on our Condensed Consolidated Balance Sheets as of April 30, 2018 and 2017. See Note 1, Nature of Business and basis of Presentation – Noncontrolling Interests, and Note 22, Supplemental Guarantor Financial Information.

Platform Settlement Services, LLC (PSS), a wholly owned subsidiary which we acquired in the GT Nexus Acquisition in fiscal 2016, is a bankruptcy-remote special purpose entity. PSS was established for the purpose of facilitating the settlement of transactions between GT Nexus Platform customers and their supply chain providers. PSS acts as a collection and paying agent, receiving funds from customers and forwarding such funds to appropriate credit parties. PSS is a custodian of the cash received from its customers and has no legal ownership rights to the funds held in such custodial accounts. Therefore, we do not report any cash in transit in the bank accounts of PSS at period end, nor any cash movements during a reporting period, in our Consolidated Financial Statements. The balance of cash in transit in custodial accounts held by PSS was $25.6 million and $46.9 million at April 30, 2018 and 2017, respectively.

Contingent Consideration

The agreements related to certain of our acquisitions include contingent consideration provisions. For business acquisitions, the change in the estimated fair value of the contingent consideration, during the contingency period through settlement, is recorded in our results of operations in the period of such change and is included in acquisition-related and other costs in our Consolidated Statements of Operations. For asset acquisitions, any such changes are recorded against the cost basis of the asset or assets acquired.

The purchase consideration related to certain of our acquisitions include additional contingent cash consideration payable to the sellers if certain future performance conditions are met as detailed in the applicable purchase agreements. During fiscal 2018, we paid contingent consideration of $18.3 million under these contingent consideration arrangements, and the potential undiscounted amount of future payments that we may be required to make related to these arrangements is between $0.0 and $81.5 million. As of April 30, 2018, and April 30, 2017, we had recorded liabilities for the estimated fair value of these contingent consideration arrangements totaling approximately $12.4 million and $25.5 million, respectively.