Clearwire 2007 Annual Report Download - page 81

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3. Significant Transactions
Acquisitions
During the year ended December 31, 2007, the Company acquired 100% of the interests of RiverCity Software
Solutions, LLC and RiverCity IntraISP, LLC from RiverCity Internet Group, for an aggregate purchase price of
$7.6 million, net of cash acquired of $361,000, comprised of $7.4 million in cash, of which $500,000 is remaining to
be paid, and $178,000 of transaction related costs. RiverCity Software Solutions, LLC and RiverCity IntraISP, LLC
specialize in providing billing, online support services and customer relationship management software solutions to
the communications and services industry.
For the year ended December 31, 2006, the Company purchased various companies through both asset and
share purchase agreements. The total aggregate purchase price was approximately $81.6 million comprised of
$49.1 million in cash, common stock valued at $32.0 million and $520,000 of transaction related costs. The assets
purchased were primarily spectrum licenses and other minor assets and liabilities and included the assumption of
spectrum and tower lease agreements.
Purchase transactions are subject to purchase price allocation adjustments due to contingency resolution and
final determination of fair values for up to one year after close. Although the total amount ultimately settled and paid
could change, the Company does not believe that any change would be material to its consolidated financial
statements or results of operations. The Company accounts for its acquisitions using the purchase method in
accordance with SFAS No. 141, Business Combinations. Pro-forma information is not included for acquisitions
completed in 2007 and 2006 as they were not material to the consolidated financial statements of the Company.
The total aggregate consideration and purchase price allocation for all of the Company’s acquisitions, for the
years ended December 31, 2007 and 2006, are as follows (in thousands):
2007 2006
Year Ended
December 31,
Purchase Consideration
Cash paid, net of cash acquired ................................... $6,888 $ 49,056
Common stock and warrants issued and payable ....................... — 32,013
Purchase price payable .......................................... 500 —
Transaction-related costs......................................... 178 520
$ 7,566 $ 81,589
Purchase Price Allocation
Current and noncurrent assets ..................................... $ 323 $ 6,078
Prepaid spectrum license fees ..................................... — 19,288
Spectrum and intangible assets .................................... 8,300 47,395
Goodwill .................................................... 1,158 20,723
Current and other long-term liabilities ............................... (2,215) (11,895)
Net assets acquired ............................................. $7,566 $ 81,589
Dispositions
NextNet — On June 30, 2006 Clearwire and Motorola executed a Stock Purchase Agreement in which
Motorola agreed to purchase 100% of the outstanding NextNet stock for a purchase price of $50.0 million in cash.
The sale of NextNet resulted in a gain of $19.8 million, comprised of aggregate proceeds from the sale of
73
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)