Visa 2011 Annual Report Download - page 97
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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2011
(in millions, except as noted)
PlaySpan Acquisition. On March 1, 2011, the Company acquired PlaySpan, a privately held company whose payments platform processes transactions
for digital goods in online games, digital media and social networks around the world. The acquisition of PlaySpan extends Visa's capabilities in digital,
eCommerce and mCommerce in order to expand the scope of payment services available to clients and consumers.
The following table presents the total purchase consideration for the PlaySpan acquisition.
Potential
Purchase
Consideration
Accounting
Purchase
Consideration
(in millions)
Cash paid $ 180 $ 180
Earn-out provision(1) 40 40
Less: Employee compensation(2) (12)
Valuation adjustment(3) (4)
Fair value of earn-out provision (See Note 4—Fair Value Measurements and Investments) 24
Fair value of stock options issued(4) 5
Total purchase consideration $ 225 $ 204
(1) The acquisition agreement includes a potential earn-out provision of up to $40 million, should PlaySpan achieve certain revenue targets and other
milestones.
(2) The amount reflects personnel expense related to the earn-out provision that will be recognized over the performance period.
(3) Adjustment to reflect the earn-out provision at fair value based on the assumed likelihood of the future revenue targets and other milestones being met.
(4) The Company issued non-qualified stock options to replace unvested, in-the-money stock options held by PlaySpan employees. See Note 17—Share-
based Compensation.
The following table summarizes the allocation of the accounting purchase consideration, which is preliminary pending finalization of the valuation
analysis.
Fair Value
(in millions)
Tangible assets, net(1) $ 67
Finite-lived intangible assets with a weighted-average useful life of 2.8 years 15
Goodwill 141
Net deferred tax liabilities (19)
Net assets acquired $ 204
(1) Tangible assets, net include $56 million of technology assets acquired, which have a weighted-average useful life of 5 years and are recognized in
property, equipment and technology, net on the consolidated balance sheets.
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