Acquisition of Mercent Corporation

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Acquisition of Mercent Corporation

Acquisition of Mercent Corporation

On January 8, 2015, the Company acquired 100% of the shares of Mercent, an online marketing technology and service company that helps merchants optimize performance across online channels, for total cash consideration of approximately $20.2 million, net of cash acquired.

During the six-month period ended June 30, 2015, the Company incurred transaction-related costs of approximately $166 thousand, which are included in general and administrative expenses. No additional cost was incurred in the six-month period ended June 30, 2016.

Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair value. The allocation of the Mercent purchase consideration to the assets acquired and liabilities assumed was as follows (in thousands):

Cash	$	41
Accounts receivable	2,559
Prepaid expenses	87
Property and equipment	336
Customer relationships	2,000
Developed software technology	1,500
Deferred tax assets	3,580
Goodwill	12,390
Accounts payable and accrued expenses	(2,015		)
Deferred revenue	(212		)
	20,266

Methodologies used in valuing the intangible assets include, but are not limited to, the multiple period excess earnings method for developed software technology and customer relationships. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill, which includes synergies expected from the expanded service capabilities and the value of the assembled work force. For federal income tax purposes, the transaction is treated as a stock acquisition and the goodwill is not deductible for tax purposes.