On August 20, 2024 (the "Acquisition Date"), we acquired all the issued and outstanding shares of Book4Time Parent, Inc. (“Book4Time”), a hospitality software company based in Canada. Book4Time is now a wholly-owned subsidiary of Agilysys, Inc. The consolidated financial statements include the results of Book4Time’s operations since the Acquisition Date. The acquisition expands the opportunity to increase our solutions-per-customer globally.

The purchase price consisted of $147.2 million of cash paid at closing, funded from cash on hand and the proceeds of the Initial Revolving Loan, partially offset by $2.3 million of Book4Time’s cash received in the acquisition resulting in net cash consideration of $144.9 million. We allocated the purchase price for Book4Time to the intangible and certain tangible assets acquired and certain liabilities assumed based on their estimated fair values on the Acquisition Date, with the remaining unallocated purchase price recorded as goodwill. We determined the fair values assigned to identifiable intangible assets acquired primarily by using the income approach, which discounts the expected future cash flows to present value using estimates and assumptions determined by management.

The following table sets forth the components and the allocation of the purchase price for our acquisition of Book4Time:


(In thousands)	Total
Components of Purchase Price:
Cash	$	147,181
Total Purchase Price	$	147,181

Allocation of Purchase Price:
Accounts receivable, net	$	1,623
Other current assets, including cash acquired		4,390
Other assets		623
Current and other liabilities		(3,018	)
Deferred tax liabilities		(11,825	)
Contract liabilities		(9,324	)
Net tangible assets (liabilities)		(17,531	)
Identifiable intangible assets:
Customer relationships		35,000
Non-competition agreements		8,100
Developed technology		2,600
Trade name		17,100
Total identifiable intangible assets		62,800
Goodwill		101,912
Total purchase price allocation	$	147,181

We assigned the acquired customer relationships, non-competition agreements, developed technology, and trade name estimated useful lives of 20 years, three years, five years, and 15 years, respectively, with a weighted average useful life of approximately 15.8 years. The identifiable intangible assets acquired amortize on a straight-line basis, which we believe approximates the pattern in which the assets are utilized, over their estimated useful lives.

The goodwill recognized in the Book4Time purchase price allocation is attributable to synergies in products and technologies to serve a broader customer base, and the addition of a skilled, assembled workforce, which is not separable from goodwill under FASB Accounting Standards Codification 805. As part of the acquisition, the Company acquired fully trained personnel thereby avoiding the expenditure that would have been required to hire and train equivalent personnel. We considered the replacement cost method as most appropriate for the assembled workforce valuation. We valued the assembled workforce included in goodwill at $1.5 million. The total goodwill recognized in the acquisition amounted to $101.9 million, which is not deductible for income tax purposes.

As of the Acquisition Date, we recorded current liabilities of $1.5 million for uncertain tax positions, including estimated penalties and interest, we identified during the acquisition. We recorded a related indemnification asset of $1.5 million in current assets covered by funds held in escrow under the terms of the share purchase agreement and escrow agreement we entered into with the sellers of Book4Time.

We have prepared the Book4Time purchase price allocation on a preliminary basis. Changes to the allocation may occur as additional information becomes available during the measurement period (up to one year from the Acquisition Date). The

primary areas that remain preliminary include, but are not limited to, intangible assets including the initial assumptions used in their estimates of fair values and their respective estimated useful lives, income taxes, and residual goodwill.

The Company recognized acquisition costs of $1.9 million related to the acquisition of Book4Time, consisting primarily of professional fees, during the nine months ended December 31, 2024. The consolidated statement of operations includes these costs in other (gains) charges, net.

Revenue attributable to Book4Time included in our condensed consolidated statement of operations was $4.6 million and $6.8 million for the three and nine months ended December 31, 2024, respectively. Net income (loss) was not material.

The financial information in the table below summarizes the combined results of operations of Agilysys and Book4Time, on a pro forma basis, as though the companies had been combined as of the beginning of the periods presented. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on April 1, 2023 or of results that may occur in the future.

The following unaudited pro forma financial information for the three- and nine-month periods ended December 31, 2024 and December 31, 2023, combines the historical results of Agilysys and of Book4Time, as converted to U.S. GAAP, for the respective periods:


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2023		2024		2023
(In thousands)	Pro Forma		Pro Forma		Pro Forma		Pro Forma
Revenue	$	69,561	$	64,775	$	208,298	$	187,004
Net income (loss)	$	3,830	$	75,063	$	16,588	$	73,828

We based the foregoing pro forma results on estimates and assumptions that we believe are reasonable. The pro forma results include adjustments primarily related to purchase accounting. We included acquisition costs and other non-recurring charges incurred in the earliest period presented.