Incredimail 2012 Annual Report Download - page 115

PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
In addition, the Company incurred acquisition related costs in a total amount of $ 1,069, which are included in general and
administrative expenses for the year ended December 31, 2011. Acquisition related costs include compensation to executive,
legal and accounting fees directly related to the acquisition.
Smilebox provides a subscription allowing people to connect with family and friends in a creative and personal way. Smilebox
enable users to personalize hundreds of unique, multimedia designs with their photos, videos, and music and then share them via
print, email, blog or DVD. The main reason for this acquisition was to enrich the Company's product suite to include other
consumer products that bear similar characteristics appealing to its unique demographic segment. A significant amount of the
acquisition was recorded as goodwill due to the synergies with Smilebox .
Under business combination accounting, the total purchase price was allocated to Smilebox’
s net tangible and intangible assets
based on their estimated fair values as set forth below. The excess of the purchase price over the net tangible and identifiable
intangible assets was recorded as goodwill.
Intangible assets:
In performing the purchase price allocation, the Company considered, among other factors, analysis of historical financial
performance, highest and best use of the acquired assets and estimates of future performance of Smilebox's products. The fair
value of intangible assets was based on market participant approach to valuation, performed by a third party valuation firm using
estimates and assumptions provided by management. The following table sets forth the components of intangible assets
associated with Smilebox acquisition:
NOTE 3:
-
ACQUISITIONS (Cont.)
Cash
$
2,100
Trade receivables
87
Other receivables and prepaid expenses
616
Property and equipment
191
Long
-
term prepaid expenses and other
449
Trade payables
(1,268
)
Accrued expenses and other liabilities
(1,171
)
Deferred revenues
(622
)
Intangible assets
6,358
Goodwill
24,753
Total purchase price
$
31,493
Fair value
Useful life
Customer relationships
$
1,488
4.3-6.3
years
Technology
3,000
3 years
Trade name
1,870
10.25
years
Total intangible assets
$
6,358
F
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