TeleNav 2013 Annual Report Download - page 98

Table of Contents
We determined the fair value of developed technology to be $5.1 million , which is being amortized using the straight-line method over the
estimated life of three years . Developed technology is included in goodwill and intangible assets, net of amortization on the consolidated balance
sheet. Goodwill of $14.3 million was recorded as the excess of the fair value of the purchase consideration over the fair value of the net assets
acquired. This asset is attributed to buyer-specific value resulting from synergies that are not included in the fair value of assets. No goodwill was
deemed to be deductible for income tax purposes.
Included in the purchase consideration of $18.4 million was $2.7 million in cash that was withheld and deposited in escrow to satisfy potential
indemnification claims. As of June 30, 2013 , $2.7 million was recorded in prepaid expenses and other current assets with an offsetting liability in
other accrued expenses in our balance sheet.
11. Sale of Enterprise Business
On April 16, 2013, we completed the sale of our enterprise business to FleetCor for $10.0 million in cash. In connection with the completion of
the transaction, 50 of our employees became employees of FleetCor.
We entered an asset purchase agreement with FleetCor on March 12, 2013, which was amended and restated on April 16, 2013. The amended
and restated asset purchase agreement, or the Agreement, included customary representations, warranties and covenants, including a license
permitting FleetCor to utilize certain of our intellectual property. Upon closing, $1.3 million
of the purchase price was held back by FleetCor and will
be maintained for a period of twelve months to satisfy any amounts owed by us to FleetCor pursuant to our obligations under the Agreement,
including indemnification provisions. As of June 30, 2013, $1.3 million was recorded in prepaid expenses and other current assets in our balance
sheet.
In connection with the sale, we entered into a transition services agreement, pursuant to which we expect to continue to support certain aspects
of the enterprise business while that business is transitioned to FleetCor, and a noncompetition agreement, pursuant to which we agreed not to
compete with FleetCor in certain business areas related to the enterprise business for three years .
Our continuing involvement through the transition services agreement with FleetCor was determined to be insignificant. Accordingly, the
results of operations of our enterprise business have been classified as discontinued operations in our statement of income for all periods presented.
We recorded a gain of $6.5 million on the sale of our enterprise business, net of tax, in fiscal 2013. The gain is included in discontinued
operations in our statement of income.
12. Restructuring Costs
In the fourth quarter of fiscal 2013, in order to better align and focus our resources around our strategic growth areas, we initiated a
restructuring plan consisting of reductions of approximately 83 full-time positions in the U.S. and China and we recorded restructuring charges of
$1.5 million related to severance and benefits for the positions eliminated. In addition, we consolidated our Shanghai office facilities and recorded
restructuring charges of $124,000 related to the forfeiture of our lease deposit. We also recorded restructuring charges of $99,000 related to the write-
off of certain assets that were no longer useful to us based upon the changes in our business. Total restructuring charges related to this plan were
$1.7
million .
As of June 30, 2013, we had paid out $1.4 million of the total $1.5 million in severance and benefits accrued. We expect the majority of the
remaining unpaid benefits to be paid out by September 30, 2013.
13. Segment information
F-25
Cash
$
181
Accounts receivable
410
Other assets
259
Developed technology
5,100
Goodwill
14,343
Liabilities assumed
(1,858
)
Total value of assets acquired and liabilities assumed
$
18,435