Incredimail 2011 Annual Report Download - page 97
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PERION NETWORK LTD. AND ITS SUBSIDIARIES
(Formerly: Incredimail Ltd.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
In addition the Company incurred acquisition related costs in a total amount of $ 1,069, which are included in general and administrative expenses for
the year ended December 31, 2011. Acquisition related costs include compensation to executive, legal and accounting fees directly related to the
acquisition.
Smilebox provides a subscription allowing people to connect with family and friends in a creative and personal way. Smilebox enable users to
personalize hundreds of unique, multimedia designs with their photos, videos, and music and then share them via print, email, blog or DVD. The main
reason for this acquisition was to enrich the Company's product suite to include other consumer products that bear similar characteristics appealing to
its unique demographic segment. A significant amount of the acquisition was recorded as goodwill due to the synergies with Smilebox.
Under business combination accounting, the total purchase price was allocated to Smilebox’
s net tangible and intangible assets based on their
estimated fair values as set forth below. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as
goodwill.
Intangible assets:
In performing the purchase price allocation, the Company considered, among other factors, analysis of historical financial performance, highest and
best use of the acquired assets and estimates of future performance of Smilebox's products. The fair value of intangible assets was based on market
participant approach to valuation, performed by a third party valuation firm using estimates and assumptions provided by management. The following
table sets forth the components of intangible assets associated with Smilebox acquisition:
NOTE 2:
-
ACQUISITION OF SMILEBOX INC. (Cont.)
Cash
$
2,100
Trade receivables
87
Other receivables and prepaid expenses
616
Property and equipment
191
Long
-
term prepaid expenses and other
449
Trade payables
(1,268
)
Accrued expenses and other liabilities
(1,171
)
Deferred revenues
(622
)
Intangible assets
6,358
Goodwill
24,753
Total purchase price
$
31,493
F
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