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F-32
pre-closing VAT amounts will be paid to the former stockholders of Saatchi Online, Inc. upon final determination of the
pre-closing VAT amounts.
The Saatchi acquisition is included in our consolidated financial statements as of the date of the acquisition. The
allocation of the purchase consideration, for business acquisitions made by us during the year ended December 31, 2014
is as follows (in thousands):
Goodwill.................................................................................
$
10,358
Technology ..............................................................................
2,327
Artist relationships ........................................................................
1,852
License agreement .........................................................................
419
Customer relationships .....................................................................
962
Other assets and liabilities assumed ...........................................................
(866)
Total .................................................................................
$
15,052
Customer relationships have a useful life of 3 years, developed technology, and the license agreement have useful
lives of 5 years, and the artist relationship has a useful life of 10 years. Goodwill, which is comprised of the excess of the
purchase consideration over the fair value of the identifiable net assets acquired, is primarily derived from assembled
workforce and our ability to generate synergies with its services. The goodwill of $10.4 million is not expected to be
deductible for tax purposes.
On June 20, 2013, we completed the acquisition of Society6, an online marketplace and e-commerce platform. The
purchase price consideration of $94.3 million was comprised of cash of $76.1 million and 464,576 shares of common
stock valued at $18.2 million, based on our stock price on the date of acquisition. We held back $7.9 million in cash and
122,638 shares of common stock (as adjusted for the Separation and the 1-for-5 reverse stock split) to secure post-
closing indemnification obligations of the sellers and/or post-closing adjustments to the purchase price, and in July 2015,
we paid $7.4 million in cash and issued 122,638 shares of our common stock to the sellers of Society6 following the
expiration of the indemnification holdback period. Artist relationships and non-compete have a useful life of 3 years,
developed technology has a useful life of four years, and trade name have an ten year useful life. Goodwill, which is
comprised of the excess of the purchase consideration over the fair value of the identifiable net assets acquired, is
primarily derived from assembled workforce and our ability to generate synergies with its services.
In March 2013, we acquired Creativebug, an online destination for arts and crafts instruction based in San
Francisco, California, for an $8.0 million cash purchase price consideration. $0.8 million cash was held back by us to
secure post-closing indemnification obligations of the sellers and/or post-closing adjustments to the purchase price. Of
the holdback, $0.4 million that is not subject to then-pending claims was paid 9 months after the closing date, and the
remainder of the holdback that is not subject to then-pending claims was paid 18 months after the closing date. During
July 2014, we completed the sale of our Creativebug business.
The Society6 and Creativebug acquisitions are included in our consolidated financial statements as of the date of
the acquisition. The allocation of the purchase consideration, for business acquisitions made by us during the year ended
December 31, 2013 is as follows (in thousands):
Creativebug
Society6
Total
Goodwill...............................................
$
4,459
$
76,676
$
81,135
Media content ..........................................
3,390
-
3,390
Technology ............................................
-
2,587
2,587
Artist relationships ......................................
-
9,867
9,867
Non-compete agreements .................................
699
192
891
Trade names ............................................
132
3,419
3,551
Customer relationships ...................................
43
-
43
Other assets and liabilities assumed .........................
(723)
1,581
858
Total ..................................................
$
8,000
$
94,322
$
102,322