eFax 2010 Annual Report Download - page 48

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The following table summarizes the allocation of the aggregate purchase price as follows (in thousands):
The initial accounting for the acquisition of Protus is incomplete and subject to change, which may be significant. j2 Global is currently
in the process of quantifying such amounts, if any, and has recorded provisional amounts based upon management’
s best estimate of the value as
a result of a preliminary analysis performed. Therefore, actual amounts recorded upon the finalization of certain intangible assets may differ
materially from the information presented in this Annual report on Form 10-K.
In connection with the acquisition, the Company accrued approximately $1.6 million related to preexisting litigation between third
parties and Protus. The Company is indemnified by the sellers (as defined in the Purchase Agreement) for amounts in excess of $1 million
related to such litigation. Accordingly, the Company recorded an indemnification asset in the amount of $0.6 million. In a separate transaction,
the Company obtained dismissals with prejudice of certain preexisting lawsuits between Protus and the Company related to the infringement of
the Company’s patents and other claims and counterclaims, subsequent to the acquisition. In accordance with ASC 805, management evaluated
the fair value of the outcomes of these matters and determined that such outcomes had a fair value of zero based upon the circumstances and the
reasonable probability or estimatibility as to the more likely than not outcome of the lawsuits.
Management has determined that a certain tradename acquired in connection with Protus will be used by the Company indefinitely.
Accordingly, this asset will have an indefinite life and will be tested annually or more frequently if j2 Global believes indicators of impairment
exists.
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired
and represents intangible assets that do not qualify for separate recognition. Goodwill recognized associated with the acquisition of Protus during
the year ended December 31, 2010 is approximately $169 million which is non-deductible for income tax purposes.
2010
The above referenced acquisitions are designed to be accretive and to provide the Company additional customers and technology in the
cloud-based, value-
added communication, messaging and data backup services segment. The consolidated statement of operations for the year
ended December 31, 2010 and
Asset
Valuation
Accounts Receivable
$
2,590
Property and Equipment
3,137
Technology
2,600
Other Assets
1,812
Customer Relationship
24,580
Trade Name
24,751
Non
-
Compete Agreements
1,464
Goodwill
169,032
Deferred Revenue
(4,927
)
Accounts Payable and Other
(6,464
)
Deferred Tax Liability, net
(11,516
)
Total
$
207,059
-
42
-