Acquisitions, Goodwill, and Other Intangible Assets (Notes)

9 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

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 acquisitions of ATLAS Medical Services ("ATLAS") and ClinIntel Limited ("ClinIntel") for the nine months ended March 31, 2015 were not material and were recognized as incurred.

We accounted for these acquisitions as business combinations in accordance with FASB 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 that 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.

ClinIntel

On October 3, 2014, we acquired all of the outstanding equity securities of privately-owned ClinIntel, a provider of clinical Randomization and Trial Supply Management (RTSM) services, based in the United Kingdom. ClinIntel’s offerings have been combined into the ClinPhone® RTSM suite and are designed to make patient randomization and clinical supply chain solutions more efficient. Capabilities include advanced RTSM technologies for planning, forecasting and supply chain eLogistics. The business has been integrated into the PAREXEL Informatics ("PI") segment.

The purchase price for the acquisition was approximately $8.8 million, plus the potential to pay up to an additional $16.2 million over a twenty-one month period following the acquisition date if ClinIntel achieves certain financial targets. We funded the acquisition with existing cash.

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

Total Consideration transferred:
Cash paid, net of cash acquired	$	8,780
Fair value of contingent consideration	9,882
Net purchase price	$	18,662
Preliminary Allocation of consideration transferred:
Accounts receivable	$	460
Definite-lived intangible assets	6,200
Goodwill	12,137
Total assets acquired	18,797
Current liabilities	135
Total liabilities assumed	135
Net assets acquired:	$	18,662

The amounts above represent our preliminary fair value estimates as of March 31, 2015 and may be 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 ClinIntel acquisition by the end of Fiscal Year 2015.

The goodwill of $12.1 million arising from the ClinIntel 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 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	$	2,300	10
Technology	3,900		8
Total	$	6,200

ATLAS

On July 1, 2014, we acquired all of the outstanding equity securities of ATLAS, a provider of clinical research services in Turkey, the Middle East, and North Africa, for approximately $2.1 million. ATLAS provides services across all phases of clinical development, has broad therapeutic expertise, and provides clinical trial-related services from study planning and feasibility, through site selection, data management and medical writing. The business has been integrated into our Clinical Research Services business. The acquisition was funded with existing cash.

Quantum Solutions India

On April 13, 2015, we acquired all of the business assets of privately-owned Quantum Solutions India ("QSI"), a leading provider of specialized pharmacovigilance services, based in Chandigarh, India. Pharmacovigilance is the collection, detection, assessment, monitoring, and prevention of adverse effects associated with pharmaceutical products.

We paid approximately $96.3 million for the assets of QSI. We funded the acquisition through use of existing cash held outside of the United States. We will include QSI results of operations in our CRS segment. Due to the limited time since the acquisition date, we have not yet completed the initial accounting for this business combination.