Acquisitions

12 Months Ended

Dec. 31, 2019

Acquisition of Bikeshare Holdings LLC (“Motivate”)

On November 30, 2018 (the “Closing Date”), the Company completed its acquisition of Motivate, a New York-headquartered bikeshare company, for cash consideration of $250.9 million. The purpose of the acquisition is to establish a solid foothold in the bikeshare market and offer access to new transportation options on the Lyft Platform.

Acquisition costs of $2.6 million were expensed as incurred and are included in general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2018.

In connection with the acquisition of Motivate, the Company recognized identifiable assets and assumed liabilities based on their respective fair values at the Closing Date. The following table summarizes the fair value of the assets acquired and liabilities assumed (in thousands):


Cash and cash equivalents	$	7,248
Prepaid expenses and other assets	20,458
Property and equipment	68,312
Identifiable intangible assets	89,800
Total identifiable assets acquired	185,818
Total liabilities assumed	53,357
Net assets acquired	132,461
Goodwill	118,474
Total acquisition consideration	$	250,935

Goodwill represents the excess of the total purchase consideration over the fair value of the underlying assets acquired and liabilities assumed. Goodwill is attributable to expected synergies and monetization opportunities from the expanded platform as well as planned growth in new markets expected to be achieved from the combined operations of the Company and Motivate. The acquisition is considered to be an asset acquisition for tax purposes and goodwill recognized in the acquisition is not deductible for tax purposes. During the fourth quarter of 2019, the Company recorded immaterial measurement period adjustments. The offset of these adjustments were recorded as a decrease to "Goodwill."

An assessment of the fair value of identified intangible assets and their respective useful lives are as follows:


	Fair Value (in thousands)		Estimated Useful Life (In years)
Contractual relationships – cities	$	61,100	3-12
User relationships	18,700		3
Developed technology	10,000		1
Total intangible assets	$	89,800

The fair value of the contractual relationships – cities was determined using the income approach. In the income approach, the fair value of an asset is based on the expected receipt of future economic benefits such as earnings and cash inflows from current sales projections and estimated costs over the estimated contractual relationship period which varies from three to twelve years. Indications of value were developed by discounting these benefits to their present value.

The fair value of the user relationships and developed technology was determined using the replacement cost approach. In the replacement cost approach, the fair value of an asset is based on the cost of a market participant to reconstruct a substitute asset of comparable utility, adjusted for any obsolescence. The fair value of the asset would include the seller’s expected profit margin in the market and any opportunity costs lost over the period to reconstruct the substitute asset.

For the years ended December 31, 2019 and 2018, Motivate revenue and net loss included in the Company’s consolidated statement of operations were not material.

Over the approximately five years following the transaction, the Company committed to invest an aggregate of $100 million in the bikeshare program for the New York metro area. The Company also assumed certain pre-existing contractual obligations to increase the bike fleets in other locations, which are not considered to be material.

Other Acquisitions

In the fourth quarter of 2018, the Company completed two additional business combinations in exchange for cash of $35.0 million, redeemable convertible preferred stock of $25.3 million and a liability of $1.7 million related to indemnification aggregating to a total consideration of approximately $62.0 million which are not material to the consolidated financial statements. In the fourth quarter of 2019, the Company completed two business combinations which are not material to the consolidated financial statements.

Pro forma results of operations have not been presented because the effects of the acquisitions were not material to the Company’s consolidated financial statements.