Classmates.com 2006 Annual Report Download - page 86
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The following summarized unaudited pro forma financial information assumes that the acquisition of Classmates had occurred at January 1,
2004 (in thousands, except per share amounts).
About Web Services
In April 2004, the Company acquired substantially all of the assets associated with the Web-hosting business of About, Inc. The business
offers consumers Web-site services, including hosting, domain and email services. The acquisition has been accounted for under the purchase
method in accordance with SFAS No. 141. The primary reason for the acquisition was to acquire About, Inc.’s Web-hosting services and
account base in order to expand the Company’s service offerings.
The purchase price of approximately $11.9 million was paid in cash and allocated to the net assets acquired based on their estimated fair
values, including identifiable intangible assets. The following table summarizes the net liabilities assumed and the intangible assets and goodwill
acquired in connection with the acquisition (in thousands):
The weighted-average amortizable life of acquired intangible assets is 3.8 years. The $7.5 million of goodwill acquired is deductible for tax
purposes. The pro forma effect of the transaction is immaterial to the consolidated financial statements.
F- 24
Year Ended
December 31,
2004
Revenues
$
513,300
Net income
$
111,882
Net income per share
—
basic
$
1.82
Net income per share
—
diluted
$
1.70
Estimated
Estimated
Amortizable
Description
Fair Value
Life
Net liabilities assumed:
Accounts receivable
$
292
Property and equipment
199
Other assets
69
Accounts payable
(215
)
Deferred revenue
(1,710
)
Total net liabilities assumed
(1,365
)
Intangible assets acquired:
Pay accounts
3,190
4 years
Proprietary rights
400
7 years
Software and technology
2,220
3 years
Total intangible assets acquired
5,810
Goodwill
7,489
Total purchase price
$
11,934