Acquisition, Goodwill and Intangibles

6 Months Ended

Dec. 31, 2012

Business Combinations, Goodwill and Intangibles [Abstract]

Business Combination Disclosure [Text Block]

NOTE 2 – ACQUISITIONS, GOODWILL, AND OTHER INTANGIBLE ASSETS

Acquisitions

Our condensed consolidated financial statements include the operating results of acquired entities from their respective dates of acquisition. Transaction costs associated with the following acquisition were expensed as incurred and were not material for the three and six months ended December 31, 2012 and 2011.

On December 21, 2012, we acquired all of the outstanding equity securities of Liquent, Inc. (“Liquent”), a leading global provider of Regulatory Information Management (RIM) solutions for total cash consideration of approximately $74.7 million. By combining Liquent with our Perceptive Informatics (“Perceptive”) segment, we intend to strengthen our regulatory capabilities by adding a regulatory information technology platform and provide our clients access to comprehensive regulatory agency submission planning, viewing, tracking, publishing, and registration management throughout the entire lifecycle of a life sciences entity. We expect the acquisition also will benefit the PAREXEL Consulting and Medical Communications Services (“PCMS”) business, where we will be able to leverage Liquent’s significant expertise in regulatory information management outsourcing.

The acquisition was funded through a new $100.0 million unsecured term loan agreement (the “2012 Term Loan”) with Bank of America, N.A. (“BOA”) (see Note 9).

We accounted for this acquisition as a business combination in accordance with FASB Accounting Standards Codification ("ASC") Topic 805, "Business Combinations". We allocate the amounts that we pay for each acquisition to the assets we acquire and liabilities we assume based on their fair values at the dates of acquisition, including identifiable intangible assets. We base the fair value of identifiable intangible assets acquired in a business combination on detailed valuations that use information and assumptions determined by management and which consider management's best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows, discount rates, and estimated useful lives, could result in different purchase price allocations and amortization expense in current and future periods than those determined by the Company.

The components of the consideration transferred in conjunction with the Liquent acquisition and the preliminary allocation of that consideration is as follows (in thousands):

Total consideration transferred:
Cash paid, net of cash acquired	$	74,692
Preliminary allocation of consideration transferred:
Accounts receivable	$	9,286
Other current assets	398
Property and equipment	1,628
Definite-lived intangible assets	32,900
Goodwill	51,118
Total assets acquired	95,330
Current liabilities	5,346
Deferred revenue, current	3,591
Deferred tax liabilities	11,701
Total liabilities assumed	20,638
Net assets acquired:	$	74,692

The amounts above represent the preliminary fair value estimates as of December 31, 2012 and are subject to subsequent adjustment as we obtain additional information during the measurement period and finalize our fair value estimates. We expect to complete our accounting for the Liquent acquisition in the second half of Fiscal Year 2013.

The goodwill of $51.1 million arising from the Liquent acquisition largely reflects the potential synergies and expansion of our service offerings across products and markets complementary to our existing service offering and markets. The goodwill recorded is included in our Perceptive segment and is non-deductible for tax purposes.

The following are the preliminary identifiable intangible assets acquired and their respective estimated useful lives, as determined based on preliminary valuations (dollars in thousands):

	Amount		Estimated Useful Life (Years)
Customer relationships	$	22,100	11
Technology	7,800		8
Trade name	2,800		8
Backlog	200		1
Total	$	32,900

Goodwill and Other Intangible Assets

The goodwill balance of $309.9 million included in our accompanying consolidated balance sheet as of December 31, 2012 reflects the additions arising from the Liquent acquisition and an increase of $3.3 million related to the impact of changes in foreign exchange rates used for translation for the six month period ending December 31, 2012. The other intangible assets, net balance of $97.0 million reflects the additions arising from the Liquent acquisition, a decrease of $2.7 million related to the impact of changes in foreign exchange rates and amortization expense of $3.1 million for the six month period ending December 31, 2012.