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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share data)
48
3. Acquisitions
On July 5, 2010, we acquired Portrait Software plc (Portrait) for $65.2 million in cash, net of cash acquired. Portrait provides
software to enhance existing customer relationship management systems, enabling clients to achieve improved customer retention and
profitability. The preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed is shown
below. The primary items that generated goodwill are the anticipated synergies from the compatibility of the acquired technology
with our existing product and service offerings, and employees of Portrait, neither of which qualify as an amortizable intangible asset.
None of the goodwill will be deductible for tax purposes.
Purchase price allocation:
Current assets $ 7,919
Other non-current assets 2,352
Intangible assets 31,332
Goodwill 47,354
Current liabilities (13,014)
Non-current liabilities (10,793)
Purchase price, net of cash acquired $ 65,150
Intangible assets:
Customer relationships $ 18,744
Software and technology 11,497
Trademarks and trade names 1,091
Total intangible assets $ 31,332
Intangible assets amortization period:
Customer relationships 10 years
Software and technology 6 years
Trademarks and trade names 6 years
Total weighted average 8 years
During 2010, we also completed smaller acquisitions for aggregate cash payments of $12.3 million. These acquisitions did not have a
material impact on our financial results.
The Consolidated Financial Statements include the results of operations of the acquired businesses from their respective dates of
acquisition. Assuming these acquisitions occurred on January 1, 2010 and 2009, total pro forma revenue would have been $5,452
million and $5,620 million for 2010 and 2009, respectively. The pro forma earnings results of these acquisitions were not material to
net income or earnings per share. The pro forma consolidated amounts do not purport to be indicative of actual results that would
have occurred had the acquisitions been completed on January 1, 2010 and 2009, nor do they purport to be indicative of the results
that will be obtained in the future.
There were no acquisitions during 2009.