ACQUISITION

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

On June 25, 2021, the Company acquired 100% of the capital stock of Four for a purchase price of $22.7 million in cash, inclusive of cash acquired.

Four is an innovative BNPL company that allows shoppers to pay for merchandise through four interest-free installments. Four's proprietary platform capabilities and its base of customers and retailers expand PROG Holdings' ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer financial technology offerings. Shoppers use Four to purchase furniture, clothing, electronics, health and beauty, footwear, jewelry, and other consumer goods from retailers across the United States.

The amounts of revenue and loss before income taxes of Four are included in the Company's consolidated statements of earnings from the date of acquisition. Four generated revenues of $5.7 million and losses before income taxes of $14.4 million during the year ended December 31, 2023, and revenues of $3.1 million and losses before income taxes of $24.4 million during the year ended December 31, 2022. Four's results of operations were not material to the Company's 2021 consolidated financial results.

The following table provides the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date:


(In Thousands)	Final Amounts Recognized as of Acquisition Date
Aggregate Purchase Price	$	22,694
Fair Value of Identifiable Assets Acquired and Liabilities Assumed
Cash and Cash Equivalents	334
Loans Receivable	609
Property, Plant and Equipment	198
Other Intangibles	5,173
Prepaid Expenses and Other Assets	39
Total Identifiable Assets Acquired	6,353
Accounts Payable and Accrued Expenses	(232)
Deferred Income Tax Liability	(838)
Total Liabilities Assumed	(1,070)
Goodwill	17,411
Net Assets Acquired	$	22,694

The intangible assets attributable to the acquisition are comprised of the following:


	Fair Value (In Thousands)		Weighted Average Life (In Years)
Acquired Technology	$	4,000	5.0
Trade Name	587		5.0
Merchant Relationships	586		2.0
Total Acquired Intangibles Assets1	$	5,173

1Acquired definite-lived intangible assets have a total weighted average life of 4.7 years.

The fair value measurements for acquired intangible assets were based on significant unobservable inputs (level 3) developed using company-specific information. Goodwill consists of the excess of the estimated purchase price over the fair value of the net assets acquired and represents the Company's ability to provide a BNPL product to PROG Holdings' existing base of retailers, merchants and customers. The value of goodwill is not tax deductible.

The Company incurred $0.6 million of acquisition-related costs in connection with the acquisition during the year ended December 31, 2021. These costs were included in operating expenses in the consolidated statements of earnings.