ACQUISITIONS:

12 Months Ended

Mar. 31, 2012

ACQUISITIONS:

ACQUISITIONS:

3.             ACQUISITIONS:

On July 1, 2010, the Company completed the acquisition of a 70% interest in GoDigital Tecnologia E Participacoes, Ltda. (“GoDigital”), a Brazilian marketing services business.  The Company paid $10.9 million, net of cash acquired, and not including amounts, if any, to be paid under an earnout agreement in which the Company may pay up to an additional $9.3 million based on the results of the acquired business over approximately the next two years.  The acquired business had annual revenue of approximately $8 million.  The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of the acquisition is not material.  The results of operations for GoDigital are included in the Company’s consolidated results beginning July 1, 2010.

The value of the earnout was originally estimated at $3.6 million.  During fiscal 2011, the Company estimated the value of the earnout to have decreased by $1.1 million and recorded the adjustment in gains, losses and other items, net on the consolidated statement of operations.  During fiscal 2012, the Company adjusted the value of the earnout to zero through gains, losses and other items, since there is no expectation of an earnout payment.  The final determination of the earnout liability will occur after the quarter ended June 30, 2012.

Also during the quarter ended December 31, 2011, triggering events occurred which required the Company to test the goodwill and other intangible assets of GoDigital for impairment (see note 6).  A total impairment charge of $17.8 million was recorded of which $13.8 million was related to goodwill and $4.0 million was related to other intangible assets.  Approximately 30% of this charge is attributable to the noncontrolling interest.

On April 1, 2010, the Company acquired 100% of the outstanding shares of a digital marketing business (“XYZ”) operating in Australia and New Zealand.  The acquisition provided the Company additional market opportunities in this region.  The Company paid $1.8 million in cash, net of cash acquired, and not including amounts to be paid under an earnout agreement in which the Company may pay up to an additional $0.6 million if the acquired business achieves a revenue target over the next two years.  The Company has paid approximately $0.3 million of the earnout, with a remaining liability of $0.3 million at March 31, 2012.  The acquired business had annual revenue of less than $2 million.  The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition is not material.  The results of operation for the acquisition are included in the Company’s consolidated results beginning April 1, 2010.

In December 2009, the Company acquired a 51% interest in Direct Marketing Services (“DMS”), with operations in Saudi Arabia and the United Arab Emirates.  Subsequently, Acxiom’s ownership increased to 57%.  Upon acquisition DMS was reorganized as a limited liability company registered under the laws and regulations of the Kingdom of Saudi Arabia and renamed Acxiom Middle East and North Africa, LTD (“MENA”).  The purchase price was $3.8 million in cash, not including the amount, if any, to be paid pursuant to an earnout agreement where additional payment was contingent on MENA’s financial performance for the period ending on December 31, 2012.  The Company has omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition is not material to the Company’s consolidated results for any period presented.  DMS had annual revenue of less than $5 million.  The results of operations for MENA are included in the Company’s consolidated results beginning December 1, 2009.

During the year ended March 31, 2011, triggering events occurred which required the Company to test the goodwill and other intangible assets of MENA for impairment (see note 6).  Management concluded that all of the goodwill and other intangibles were impaired.  A total impairment charge of $7.2 million was recorded in impairment of goodwill and other intangibles on the consolidated statement of operations, of which $4.8 million was related to goodwill and $2.4 million related to other intangible assets.  Approximately 43% of this charge is attributable to the noncontrolling interest.

On July 12, 2011, the Company entered into a transaction with MENA’s minority partners to fully dispose of its interest in its MENA subsidiary.  The terms of the disposal included a $1.0 million cash payment to MENA and the release of any claims that the acquirer may have against the Company and an agreement to hold the Company harmless from any future liabilities.  See note 4 for further discussion.

The following table shows the allocation of GoDigital, XYZ, and MENA purchase prices to assets acquired and liabilities assumed (dollars in thousands):

	GoDigital		XYZ		MENA
Assets acquired:
Cash	$	776	$	547	$	40
Goodwill	15,546		1,446		4,824
Other intangible assets	6,500		779		3,250
Other current and noncurrent assets	1,178		184		2,139
	24,000		2,956		10,253
Accounts payable, accrued expenses and capital leases assumed	2,091		120		2,027
Net assets acquired	21,909		2,836		8,226
Less:
Cash acquired	776		547		40
Earnout liability	3,611		532		371
Noncontrolling interest	6,573		—		4,030
Net cash paid	$	10,949	$	1,757	$	3,785

The fair values of the noncontrolling interests in GoDigital and MENA in the table above were derived based on the purchase price paid by Acxiom for its interest.  The amount allocated to goodwill is due primarily to assembled work force.  The amounts allocated to other intangible assets in the table above include software, customer relationship intangibles and trademarks.  Amortization lives for those intangibles range from two years to seven years.  The following table shows the amortization activity of purchased intangible assets (dollars in thousands):

	2012			2011			2010
Developed technology assets, gross	$	18,417		$	21,165		$	20,990
Accumulated amortization	(17,557		)	(15,679		)	(16,615		)
Net developed technology assets	$	860		$	5,486		$	4,375
Customer/trademark assets, gross	$	24,946		$	25,042		$	30,015
Accumulated amortization	(23,421		)	(18,146		)	(20,294		)
Net customer/trademark assets	$	1,525		$	6,896		$	9,721
Total intangible assets, gross	$	43,363		$	46,207		$	51,005
Total accumulated amortization	(40,978		)	(33,825		)	(36,909		)
Net intangible assets	$	2,385		$	12,382		$	14,096
Amortization expense	$	5,512		$	6,950		$	7,673

In addition to the amortization expense noted above, the Company recorded impairment of intangible assets of $4.0 million in 2012 for intangible assets of GoDigital and $2.4 million in 2011 for intangible assets of MENA.

The following table shows a projection of amortization expense associated with the above assets for the next five years (dollars in thousands):

Year ending March 31,	Projected amortization expense
2013	1,636
2014	415
2015	183
2016	88
2017	26
Thereafter	37

The amounts allocated to intangible assets for GoDigital and XYZ are not expected to be deductible for income tax purposes.