Incredimail 2013 Annual Report Download - page 118

PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 3:- ACQUISITIONS (Cont.)
On August 31, 2011, the Company completed the acquisition of all of the outstanding shares of Smilebox Inc.
("Smilebox"). The Company included the financial results of Smilebox in its consolidated financial statements from the
date of acquisition. Under the Purchase Agreement, the total consideration is composed of cash and Ordinary shares of the
Company, as follows:
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.
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.
b.
Acquisition of Smilebox Inc
• $ 24,269 in cash;
•
128,538 Ordinary shares of the Company issuable at closing at fair value of $ 750;
•
$ 7,000 in cash and in Ordinary shares of the Company (subject to certain adjustments), payable within 7 months
following the closing (March 2013). In connection with this consideration, the Company recorded a $ 6,474
liability at closing. This amount was paid in full in 2013, including $ 6,266 paid in cash and 65,720 shares issued
at value of $ 337 and;
• A milestone-
based contingent cash and ordinary shares of the Company payment ("Contingent Payment") of up
to $ 8,000 payable in September 2013. The Company recognized a liability of zero with respect to this
Contingent Payment, which represents its fair value. No payment was made in September 2013 as the milestones
were not met.
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