Shutterfly 2015 Annual Report Download - page 94

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acquisition was accounted for as a purchase transaction and, accordingly, the purchase price has been allocated to
the acquired tangible assets, liabilities assumed, and identifiable intangible assets acquired based on their
estimated fair values on the acquisition date. The excess of the purchase price over the aggregate fair values was
recorded as goodwill.
Of the total purchase price, $0.6 million was allocated to the customer base, which will be amortized over an
estimated useful life of two years, $0.5 million was allocated to the Groovebook tradename, which will be
amortized over an estimated useful life of three years, $0.4 million was allocated to Groovebook patents, which
will be amortized over an estimated useful life of two years and $0.2 million was allocated to developed
technologies, which will be amortized over an estimated useful life of one year. The remaining excess purchase
price of approximately $12.0 million was allocated to goodwill primarily representing manufacturing and
production synergies and synergies from Groovebooks’ market position. The results of operations for the
acquired business have been included in the consolidated statement of operations for the period subsequent to the
Company’s acquisition of Groovebook. Groovebook’s results of operations for periods prior to this acquisition
were not material to the consolidated statement of operations and, accordingly, pro forma financial information
has not been presented.
BorrowLenses LLC
On October 24, 2013, the Company acquired BorrowLenses LLC (“BorrowLenses”) for a total aggregate
cash purchase price of $36.8 million, or $35.7 million net of cash acquired. BorrowLenses is a premier online
marketplace for photographic and video equipment rentals. The acquisition was accounted for as a non-taxable
purchase transaction and, accordingly, the purchase price has been allocated to the acquired tangible assets,
liabilities assumed, and identifiable intangible assets acquired based on their estimated fair values on the
acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill. For
federal income tax purposes, an election was made to treat the non-taxable transaction as an asset acquisition.
Of the total purchase price, $4.2 million was allocated to the customer base, which will be amortized over an
estimated useful life of four years, $1.0 million was allocated to developed technologies, which will be amortized
over an estimated useful life of approximately three years, and $1.6 million was allocated to the BorrowLenses
tradename, which will be amortized over an estimated useful life of four years. The assets and liabilities acquired
totaled approximately $13.3 million and $0.8 million, respectively. The remaining excess purchase price of
approximately $17.6 million was allocated to goodwill primarily representing the assembled workforce and
synergies from BorrowLenses’ market position. The results of operations for the acquired business have been
included in the consolidated statement of operations for the period subsequent to the Company’s acquisition of
BorrowLenses. BorrowLenses’ results of operations for periods prior to this acquisition were not material to the
consolidated statement of operations and, accordingly, pro forma financial information has not been presented.
R&R Images, Inc.
On August 29, 2013, the Company acquired certain assets of R&R Images, Inc. (“R&R”) primarily to
expand product innovation and printing capabilities. The acquisition was accounted for as a business
combination. This acquisition was not significant individually or when aggregated with other acquisitions during
the year ended December 31, 2013. The Company has included financial results of R&R in the consolidated
financial statements from the acquisition date of August 29, 2013 through December 31, 2013.
MyPublisher, Inc.
On April 29, 2013, the Company acquired MyPublisher, Inc. (“MyPublisher”) for a total aggregate cash
purchase price of $40.2 million, or $38.4 million net of cash acquired. MyPublisher is one of the pioneers in the
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