Vistaprint 2014 Annual Report Download - page 76

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Acquisition of Webs, Inc.
On December 28, 2011, we acquired 100% of the outstanding shares of Webs, Inc., a provider of do-it-
yourself websites, Facebook pages and mobile presence solutions for small businesses. At closing we paid
$101,258 in cash and issued 506,343 of our ordinary shares pursuant to RSAs that were contingent upon continued
employment of the founding shareholders. The purchase price was funded using cash on hand and borrowings
under our credit facility.
The RSAs were granted to the founding shareholders of Webs and vested 50% on December 28, 2012 and
50% on December 28, 2013, subject to continued employment on each vesting date with possible accelerated
vesting or forfeiture under certain circumstances. The fair value of the RSAs of $15,843 was determined based on
our share price on the date of acquisition and was recognized as share-based compensation expense, net of
estimated forfeitures, over the two year vesting period. The RSAs were not included as part of the consideration
transferred for purposes of the purchase price allocation.
The excess of the purchase price paid over the fair value of Webs’ net assets was recorded as goodwill,
which is primarily attributable to revenue synergies expected from cross-selling opportunities and the value of the
workforce of Webs. Of the total purchase price, $93,498 was allocated to goodwill, $9,075 to identifiable intangible
assets and $1,315 to net liabilities assumed. Goodwill is not deductible for tax purposes, and has been attributed to
our North America operating segment.
Identifiable Intangible Assets
We used the income approach to value the trade names, customer relationships and customer network and
a replacement cost approach to value developed technology. The income approach calculates fair value by
discounting the forecasted after-tax cash flows back to a present value using an appropriate discount rate. The
baseline data for this analysis was the cash flow estimates used to price the transaction.
In estimating the useful life of the acquired assets, we reviewed the expected use of the assets acquired,
factors that may limit the useful life of an acquired asset or may enable the extension of the useful life of an
acquired asset without substantial cost, the effects of obsolescence, demand, competition and other economic
factors, and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
We amortize acquired intangible assets over their economic useful lives using either a method that is based on
estimated future cash flows or a straight-line basis over the periods benefited.
9. Goodwill and Acquired Intangible Assets
Goodwill
The carrying amount of goodwill by segment as of June 30, 2013 and June 30, 2014 is as follows:
North
America Europe Most of World Total
Balance as of June 30, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 96,469 $ 43,752 $ 208 $ 140,429
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (679) — — (679)
Effect of currency translation adjustments (1) . . . . . . . . . . . . . . . . — 1,143 — 1,143
Balance as of June 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,790 44,895 208 140,893
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 174,887 — 174,887
Effect of currency translation adjustments (1) . . . . . . . . . . . . . . . . 765 642 — 1,407
Balance as of June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 96,555 $ 220,424 $ 208 $ 317,187
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(1) Relates to goodwill attributable to the Albumprinter, People & Print Group and Pixartprinting acquisitions as amounts are denominated in
Euro.