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Buddy Media, Inc.
On August 13, 2012, the Company acquired the outstanding stock of Buddy Media, Inc. (“Buddy”), a social
media marketing platform. The Company acquired Buddy for the assembled workforce, expected synergies and
expanded market opportunities when integrating Buddy’s social media marketing platform with the Company’s
current offerings. The acquisition date fair value of the consideration transferred for Buddy was $735.8 million,
which consisted of the following (in thousands, except share data):
Cash ............................................ $497,500
Common stock (5,571,096) .......................... 202,161
Fair value of stock options and restricted stock awards
assumed ....................................... 36,092
Total ............................................ $735,753
The value of the share consideration for the Company’s common stock was based on the closing price of $36.29
on the day of the acquisition. The fair value of the stock options and restricted stock awards assumed by the Company
was determined using the Black-Scholes option pricing model. The share conversion ratio of 0.584 was applied to
convert Buddy’s options and restricted stock awards to the Company’s options and restricted stock awards.
The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the
date of acquisition (in thousands):
Current assets ..................................... $ 35,609
Other noncurrent assets ............................. 3,424
Current and noncurrent liabilities ...................... (16,437)
Deferred revenue .................................. (3,281)
Deferred tax liability ............................... (2,436)
Intangible assets ................................... 78,340
Goodwill ......................................... 640,534
Net assets acquired ................................. $735,753
The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets
acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets
acquired and liabilities assumed are based on management’s estimates and assumptions. During fiscal 2014, the
Company finalized its assessment of fair value of the assets and liabilities assumed at acquisition date. The
adjustments made were not material and are not reflected above.
The following table sets forth the components of identifiable intangible assets acquired and their estimated
useful lives as of the date of acquisition (in thousands):
Fair value Useful Life
Developed technology ........................ $65,210 5 years
Customer relationships ........................ 11,030 5 years
Trade name and trademark ..................... 2,100 5 years
Total intangible assets subject to amortization . . . $78,340
Developed technology represents the fair value of Buddy’s social media marketing platform. Customer
relationships represent the fair values of the underlying relationships and agreements with Buddy customers. The
trade name and trademark represents the fair value of the brand and name recognition associated with the
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