WeightWatchers 2015 Annual Report Download - page 92

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The equity interest held immediately before the acquisition was $12. An implied fair value technique was
used to measure acquisition date fair value of the equity interest to be $11,029. As a result of this transaction, the
Company adjusted its previously held equity interest to fair value of $11,017 and recorded a charge of
$477 associated with the settlement of the royalty-free arrangement of the Brazilian partnership. The net effect of
these items resulted in the Company recognizing a gain of $10,540 ($6,429 after tax or $0.11 per fully diluted
share) in the first quarter of fiscal 2014.
The fair value of the redeemable noncontrolling interest has been valued at $6,157. In connection with the
acquisition, a call option and a put option were granted related to the 20% interest in VPM not owned by the
Company.
The net purchase price of the Brazil acquisition has been allocated as follows:
Fair value of consideration transferred:
Net purchase price .............................................. $14,181
Less cash acquired .............................................. 2,262
Total ......................................................... 11,919
Gain on acquisition .............................................. 10,540
Redeemable noncontrolling interest ................................. 6,157
28,616
Identifiable assets acquired and liabilities assumed:
Franchise rights acquired ......................................... 2,000
Receivables .................................................... 1,139
Fixed assets ................................................... 575
Prepaid expenses ............................................... 421
Inventory ..................................................... 287
Customer relationship value ....................................... 275
Other assets ................................................... 199
Accrued liabilities .............................................. (1,063)
Deferred tax on acquired intangibles ................................ (680)
Deferred revenue ............................................... (445)
Income taxes payable ............................................ (258)
Accounts payable ............................................... (91)
Total identifiable net assets ........................................... 2,359
Goodwill .......................................................... $26,257
The acquisition resulted in goodwill related to, among other things, expected synergies in operations and the
ability of the Company to provide VPM with various intellectual property and technology innovations which will
afford additional future opportunities in the meetings and Online businesses within the market where VPM
operates. The Company does not expect goodwill to be deductible for tax purposes.
Acquisition of Wello
On April 16, 2014, the Company acquired Knowplicity, Inc., d/b/a Wello, an online fitness and personal
training company for a net purchase price of $8,977 less cash acquired of $11. Payment was in the form of
common stock issued ($4,207) and cash ($4,770). The total purchase price of Wello has been allocated to
F-17