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 could have paid 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 was no expectation of an earnout payment. During the quarter ended September 30, 2012, a final determination was made that no liability for earnout payment existed under the acquisition agreement.

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. As of March 31, 2013, the Company has paid approximately $0.6 million and has no remaining liability under that agreement. 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.

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

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

The fair value of the noncontrolling interest in GoDigital in the table above was 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 three years to five years. The following table shows the amortization activity of purchased intangible assets (dollars in thousands):

	2013			2012			2011
Developed technology assets, gross	$	18,014		$	18,417		$	21,165
Accumulated amortization	(17,881		)	(17,557		)	(15,679		)
Net developed technology assets	$	133		$	860		$	5,486

Customer/trademark assets, gross	$	18,823		$	24,946		$	25,042
Accumulated amortization	(18,259		)	(23,421		)	(18,146		)
Net customer/trademark assets	$	564		$	1,525		$	6,896

Total intangible assets, gross	$	36,837		$	43,363		$	46,207
Total accumulated amortization	(36,140		)	(40,978		)	(33,825		)
Net intangible assets	$	697		$	2,385		$	12,382

Amortization expense	$	1,671		$	5,512		$	6,950

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 (see note 6) and $2.4 million in 2011 for intangible assets of MENA (see note 4). The remaining intangible assets in the table above will be substantially amortized over the next two years.