Classmates.com 2006 Annual Report Download - page 85
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The purchase price of approximately $131.4 million, including acquisition costs of $3.1 million for professional, accounting, legal and
administrative fees, was allocated to Classmates’ net assets based on their fair values. The excess of the purchase price over the estimated fair
values of the net assets acquired, including identifiable intangible assets, was recorded as goodwill. The Company assumed 0.5 million unvested
options as of the acquisition date, and the fair value of the options assumed was determined based on the Black-Scholes option pricing model
using a weighted-average expected life of five years, 0% dividend, volatility of 99%, and a risk-free interest rate of 3%. The following table
summarizes the purchase price (in thousands):
n
The following table summarizes the net liabilities assumed and goodwill and intangible assets acquired in connection with the acquisition of
Classmates (in thousands):
The weighted-average amortizable life of acquired definite-lived intangible assets is 7.2 years. The goodwill is not deductible for tax
purposes.
F- 23
Cash
$
125,453
Fair value of options assumed
4,325
Intrinsic value of unvested options
(1,445
)
Acquisition costs
3,065
Total purchase price
$
131,398
Estimated
Estimated
Amortizable
Description
Fair Value
Life
Net liabilities assumed:
Cash
$
30,350
Accounts receivable
3,396
Property and equipment
9,700
Other assets
2,384
Accounts payable and accrued liabilities
(6,742
)
Deferred revenue
(23,757
)
Deferred income taxes
(14,170
)
Capital leases
(1,485
)
Other long-term liabilities
(286
)
Total net liabilities assumed
(610
)
Intangible assets acquired:
Trademark and trade name
13,800
10 years
Advertising contracts and related relationships
7,200
3.5 years
Pay accounts
21,700
4 years
Free accounts
21,500
10 years
Other intangibles
536
7 years
Total intangible assets acquired
64,736
Goodwill
67,272
Total purchase price
$
131,398