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Table of Contents
74
Note 6. Acquisitions
On October 1, 2014, we acquired 100% of the business of internships.com, a division of CareerArc Group,
headquartered in Burbank, California. With this acquisition, we aimed to expand our user base and expose new users to our
different services. We see the acquisition of internships.com as a method to connect the ending of a student life cycle to the
beginning of their career. The total fair value of the purchase consideration was $10.0 million in cash, and $1.0 million in stock
that was placed into escrow, for indemnification against breaches of general representations and warranties, and will be
released 18 months from the closing date of the acquisition.
On June 5, 2014, we acquired 100% of the outstanding shares and voting interest of InstaEDU, Inc. (InstaEDU),
headquartered in San Francisco, California. With this acquisition, we aimed to expand our digital offerings to help students
excel in school by including real time tutoring services. We see the acquisition of InstaEDU as a method to connect the book
offering and service offerings of Chegg together. The total fair value of the purchase consideration was $31.1 million in cash,
which included $4.5 million that was placed into escrow, for indemnification against breaches of general representations and
warranties, and will be released 18 months from the closing date of the acquisition.
On April 9, 2014, we acquired 100% of the outstanding shares and voting interest of The Campus Special, LLC and The
Campus Special Food, LLC (together, the Campus Special), headquartered in Duluth, Georgia for a total fair value purchase
consideration of $16.0 million, consisting of $14.0 million in cash and 250,000 shares of our common stock, and all of such
shares of our common stock were placed in escrow for indemnification against breaches of general representations and
warranties and will be released one year from closing date, and a fair value contingent consideration of additional shares of
common stock, which is payable on the attainment of certain performance metrics in 2014 and 2015. The metrics related to
2014 were not met and as such those shares were not released. With the Campus Special acquisition, we aimed to expand our
offerings to students to include coupon specials on consumer goods and services. The probability-weighted fair value
contingent consideration was recorded in other accrued liabilities in our consolidated balance sheet as of the date of acquisition.
On March 7, 2014, we acquired certain assets from Bookstep LLC, (Bookstep) to expand our technical resources and
research and development capabilities. The total fair value of the purchase consideration was $0.5 million. The acquisition
agreement requires us to pay approximately $2.5 million in cash, payable over two years, contingent upon the continuation of
services by a certain number of consultants during the period after acquisition. The fair value of these subsequent payments was
$2.5 million, which is being accounted for as post-combination compensation expense.
The acquisition date fair value of the consideration for the above four transactions consisted of the following as of
December 31, 2014 (in thousands):
Cash consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,537
Fair value of stock escrow consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,585
Fair value of stock contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Fair value of purchase consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 58,315
The fair value of the intangible assets acquired was determined under the acquisition method of accounting for business
combinations. The excess of purchase consideration paid over the fair value of identifiable intangible assets acquired was
recorded as goodwill.