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Acquisitions
 12 Months Ended
Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract]  
Acquisitions Acquisitions
Tacit — On May 29, 2021, the Company acquired 100% of the equity interest of the global consultancy company Tacit Knowledge Inc. (“Tacit”). Founded in 2002, Tacit is a global provider of digital commerce solutions, serving customers across the UK, North America, Continental Europe, and Asia. The acquisition of Tacit added approximately 180 employees to the Company's headcount. The acquisition will augment the Company's service offerings and will strengthen its competitive position within the market. Additionally, the acquisition will also enable the Company to leverage near-shore capabilities with Tacit’s presence in Mexico.
The total purchase consideration is $37.6 million and consists of cash consideration of $33.6 million paid at closing, and fair value of the contingent consideration at the date of the acquisition of $4.0 million. The maximum amount of potential contingent cash consideration is $5.0 million. During the fourth quarter of 2021 the Company adjusted fair value of contingent consideration as of December 31, 2021 to its maximum amount and reflected the expense in its consolidated statement of income/(loss). The contingent consideration is payable based on revenue and EBITDA metrics to be achieved by Tacit within 12 months. The Company recorded a liability for the contingent consideration amount based on the Company’s best estimate of the fair value of the expected payout. See Note 5 for further details on contingent consideration.
Daxx — On December 14, 2020, the Company completed its acquisition of Daxx Web Industries B.V. (“Daxx”), a Netherlands-based software development and technology consulting company. In addition to high-end software development, Daxx provides consulting services spanning agile process reengineering, lean development, and DevOps. The Company expects to gain market share and realize synergies through the acquisition of Daxx.
The total purchase consideration is up to $23.3 million and included cash consideration of approximately $18.4 million and contingent consideration payable of up to $4.9 million. The contingent consideration is payable based on revenue and EBITDA metrics achieved by Daxx for 270 days following the date of the acquisition. The Company recorded a liability for the
contingent consideration amount based the Company’s best estimate of the fair value of the expected payout. See Note 5 for further details on contingent consideration.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as updated for any changes as of December 31, 2021 for Daxx and Tacit:
DaxxTacit
Current assets$4,527 $9,145 
Property, plant and equipment352 466 
Intangible assets8,174 12,913 
Goodwill14,690 21,268 
Total assets acquired$27,743 $43,792 
Accounts payable and accrued expenses(4,718)(3,675)
Deferred taxes(2,639)(2,500)
Total liabilities assumed$(7,357)$(6,175)
Purchase price allocation$20,386 $37,617 
Current assets acquired include cash and cash equivalents in the amount of $2.3 million and $3.0 million for Daxx and Tacit acquisitions, respectively. The purchase price was assigned to assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition, and any excess was allocated to goodwill, as shown in the table above. Goodwill represents the value the Company expects to achieve through the implementation of operational synergies and growth opportunities as the Company expands its global reach. The goodwill for both acquisitions is not deductible for income tax purposes. 
During the first quarter of 2021, the Company finalized the fair value of the assets acquired and liabilities assumed in the acquisition of Daxx with no additional adjustments recorded. During the second half of 2021 the Company updated fair value of contingent consideration for Tacit at acquisition date that resulted in the increase of goodwill for $0.7 million. During the fourth quarter of 2021, the Company finalized the fair value of the assets acquired and liabilities assumed in the acquisition of Tacit.
The estimated fair value, useful lives and amortization methods of identifiable intangible assets as of the date of acquisition updated for any changes during the year ended December 31, 2021 are as follows:
TacitFair ValueUseful LifeAmortization
method
Customer relationships$11,737 12 yearsStraight-line
Trade name1,176 4 yearsDeclining balance
Total Tacit identified intangible assets$12,913 
DaxxFair ValueUseful LifeAmortization
method
Customer relationships$4,234 8 yearsStraight-line
Trade name3,500 10 yearsStraight-line
Non-compete agreements440 2 yearsStraight-line
Total Daxx identified intangible assets$8,174 
The Company used acquisition method of accounting for both acquisitions, and consequently, the results of operations for Daxx and Tacit are reported in the consolidated financial statements from the dates of acquisition. Revenues of Daxx and Tacit from the date of acquisition to December 31, 2021 were $29.2 million and $16.7 million, respectively. Out of that revenue $1.0 million was recognized during the year ended December 31, 2020.
The following unaudited pro forma information presents the combined results of operations as if the acquisitions of Daxx and Tacit had occurred at the beginning of 2020 and 2021, respectively. Pre-acquisition results of businesses acquired have been added to the Company’s historical results. The pro forma results contained in the table below include adjustments for
amortization of acquired intangibles, depreciation expense, related to the financing and related income taxes. Any potential cost savings or other operational efficiencies that could result from the acquisition are not included in these pro forma results. 
These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations as they would have been had the acquisitions occurred on the assumed dates, nor are they necessarily an indication of future operating results.
(Unaudited)20212020
Revenue$219,312 $149,219 
Net loss$(5,910)$(10,792)
Diluted loss per share$(0.10)$(0.24)