Business Acquisitions

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

For the year ended December 31, 2021, the Company completed a share purchase of SEOmoz, acquired on June 4, 2021, a Seattle-based provider of search engine optimization (“SEO”) solutions. As part of the Separation, the Company transferred the assets acquired to the Former Parent. The allocation of the purchase consideration and further details are included in Business Acquisitions Classified in Discontinued Operations below.

For the year ended December 31, 2020, the Company completed an asset purchase of EDC Systems, Inc. (operating under the name “SRFax”), acquired on February 18, 2020, a Canadian-based provider of fax solutions. The purchase price accounting for this acquisition was completed during the year ended December 31, 2021. In addition to the SRFax acquisition, the Company completed a share purchase of the entire issued capital of Inspired eLearning, LLC, acquired on November 2, 2020, a Texas-based platform for cybersecurity awareness and compliance training, as well as the purchase of two other immaterial businesses. As part of the separation, the Company transferred the Inspired eLearning assets and the two immaterial businesses acquired to the Former Parent. The allocation of the purchase consideration and further details are included in Business Acquisitions Classified in Discontinued Operations below.

The Consolidated Statement of Income since the date of acquisition and balance sheet as of December 31, 2020, reflect the results of operations of SRFax. For the year ended December 31, 2020, SRFax contributed $7.3 million to the Company’s revenues. Net income contributed by SRFax is not separately identifiable due to the Company’s integration activities and is impracticable to provide. Total consideration was $25.0 million, net of cash acquired and assumed liabilities for SRFax.

The following table summarizes the allocation of the purchase consideration for the acquisition of SRFax (in thousands):


Assets and Liabilities	Valuation

Accounts receivable	$	194

Property and equipment	44

Trade names	907
Customer relationships	8,235
Goodwill	15,844


Other intangibles	379


Accounts payables and accrued expenses	(94)

Deferred revenue	(519)








Total	$	24,990

During the year ended December 31, 2021, the purchase price accounting has been finalized for SRFax and there were no material adjustments.

The fair value of the assets acquired includes accounts receivable of $0.2 million. The gross amount due under contracts is $0.2 million and immaterial amounts are expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of the SRFax acquisition.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized in connection with the acquisition of SRFax during the year ended December 31, 2020 is $15.8 million, of which the full amount is expected to be deductible for income tax purposes.

Unaudited Pro Forma Financial Information for SRFax

The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired business been combined companies during the periods presented. These pro forma results exclude any savings or synergies that would have resulted from the business acquisition had it occurred on January 1, 2019 and do not take into consideration the exiting of

any acquired lines of business. This unaudited pro forma supplemental information includes incremental intangible asset amortization, income tax expense, and interest income as a result of the acquisitions, net of the related tax effects.

The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and SRFax as if the acquisition had occurred on January 1, 2019 (in thousands, except per share amounts):


	Year ended
	December 31, 2020		December 31, 2019
	(unaudited)		(unaudited)
Revenues	$	332,431	$	328,351
Net income	$	122,912	$	180,911
EPS - Basic (1)	$	6.18	$	9.09
EPS - Diluted (1)	$	6.18	$	9.09

(1) Basic and Diluted EPS are calculated based on net income from continuing operations attributable to common shareholders.

Business Acquisitions Classified in Discontinued Operations

The Consolidated Statement of Income since the date of acquisition, reflect the results of operations of SEOmoz within discontinued operations. For the year ended December 31, 2021, SEOmoz contributed $14.4 million to revenue within discontinued operations. Total consideration for SEOmoz was $66.5 million, net of cash acquired and assumed liabilities.

The following table summarizes the allocation of the purchase consideration for the acquisition of SEOmoz (in thousands):


Assets and Liabilities	Valuation

Accounts receivable	$	3,901
Prepaid expenses and other current assets	1,568
Property and equipment	1,838
Operating lease right-of-use assets	5,888
Trade names	7,200
Customer relationships	5,000
Goodwill	41,213


Other intangibles	21,607


Accounts payables and accrued expenses	(2,352)
Other current liabilities	(14)
Deferred revenue	(6,398)
Operating lease liabilities, current	(7,191)

Other long-term liabilities	(785)



Deferred tax liability	(4,936)

Total	$	66,539

The initial accounting for the SEOmoz acquisition is incomplete as of the date of the Separation and has been included in discontinued operations.

The fair value of the assets acquired includes accounts receivable of $3.9 million. The gross amount due under contracts is $4.2 million, of which $0.3 million is expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of this acquisition.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized in connection with this acquisition is $41.2 million of which zero is expected to be deductible for income tax purposes.

The Consolidated Statement of Income and Consolidate Balance Sheet since the date of acquisition, reflect the results of operations of Inspired eLearning. For the year ended December 31, 2020, Inspired eLearning contributed $1.6 million to revenue within discontinued operations. Total consideration for Inspired eLearning was $20.5 million, net of cash acquired and assume liabilities. In the year ended December 31, 2020, two other immaterial businesses were acquired which are included in discontinued operations.

The following table summarizes the allocation of the purchase consideration for the acquisition of Inspired eLearning (in thousands), which is included within discontinued operations on the balance sheet:


Assets and Liabilities	Valuation

Accounts receivable	$	1,876
Prepaid expenses and other current assets	1,002
Property and equipment	418

Trade names	2,012
Customer relationships	3,654
Goodwill	13,174


Other intangibles	6,134
Other long-term assets	73
Deferred tax asset	39
Accounts payables and accrued expenses	(1,878)

Deferred revenue	(5,935)
Operating lease liabilities, current	(97)







Total	$	20,472

The initial accounting for the Inspired eLearning acquisition is complete as of the date of the Separation and has been included in discontinued operations.