4. Business Combinations

Asterion

On April 10, 2018, Exela completed the acquisition of Asterion International Group (“Asterion,” the “Asterion Business Combination”), a well-established provider of technology driven business process outsourcing, document management and business process automation across Europe. The purchase price was approximately $19.5 million. The acquisition was strategic to expanding Exela’s European business.

The acquired assets and assumed liabilities of Asterion were recorded at their estimated fair values. The following table summarizes the consideration paid for Asterion and the fair value of the assets acquired and liabilities assumed at the acquisition date on April 10, 2018:


Assets Acquired:
Cash and cash equivalents	$	5,595
Accounts receivable		25,740
Other current assets		2,282
Inventories		1,137
Property, plant, and equipment		4,747
Deferred income tax assets		6,316
Other noncurrent assets		522
Intangible assets		3,525
Goodwill		1,493
Total identifiable assets acquired	$	51,357
Liabilities Assumed:
Accounts payable	$	(5,596)
Income tax payable		(5)
Accrued liabilities		(6,593)
Accrued compensation and benefits		(7,079)
Deferred revenue		(880)
Current portion of long term debt		(994)
Customer deposits		(462)
Pension liabilities		(7,135)
Other long-term liabilities		(1,324)
Deferred income tax liabilities		(1,171)
Capital lease obligations, net of current maturities		(650)
Total liabilities assumed	$	(31,889)
Total Consideration	$	19,468

The majority of identifiable intangible assets consisted of customer relationships. Customer relationships were valued using the Income Approach, specifically the Multi-Period Excess Earnings method. This intangible acquired represents a Level 3 measurement as it is based on unobservable inputs reflecting Management’s own assumptions about the inputs used in pricing the asset at fair value.


	Weighted Average
	Useful Life (in years)	Fair Value
Customer Relationships	9.5	$	3,516

Through the acquisition of Asterion, we expect to leverage brand awareness, strengthen margins, and expand the existing Asterion sales channels. These factors, among others, contributed to a purchase price in excess of the estimated fair value of Asterion’s identifiable net assets assumed, and as a result, the Company has recorded goodwill in connection with this acquisition. Exela recognized $73.9 million and $59.7 million in revenue related to Asterion in the Consolidated Statements of Operations for the years ended December 31, 2019 and 2018, respectively. The pro-forma financial statements of Asterion are not considered material from an overall disclosure perspective, and therefore, are not included here.