Vonage 2015 Annual Report Download - page 94

VONAGE HOLDINGS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
F-34 VONAGE ANNUAL REPORT 2015
The acquisition was accounted for using the acquisition
method of accounting under which assets and liabilities of iCore were
recorded at their respective fair values including an amount for goodwill
representing the difference between the acquisition consideration and
the fair value of the identifiable net assets. We do not expect any portion
of this goodwill to be deductible for tax purposes. The goodwill
attributable to the acquisition has been recorded as a non-current asset
and is not amortized, but is subject to an annual review for impairment.
The acquisition price was allocated to the tangible and
identified intangible assets acquired and liabilities assumed as of the
closing date. The fair values assigned to tangible and identifiable
intangible assets acquired and liabilities assumed are based on
management’s estimates and assumptions. The estimated fair values
of assets acquired and liabilities assumed are considered preliminary
and are based on the most recent information available. We believe that
the information provides a reasonable basis for assigning the fair values
of assets acquired and liabilities assumed, but we are waiting for
additional information, primarily related to income, sales, excise, and
ad valorem taxes which are subject to change. Thus, the provisional
measurements of fair value set forth below are subject to change. We
expect to finalize the valuation as soon as practicable, but not later than
one year from the acquisition date.
The table below summarizes the iCore assets acquired and liabilities assumed as of August 31, 2015:
Estimated Fair Value
Assets
Current assets:
Cash and cash equivalents $ 1,014
Accounts receivable 1,492
Inventory 191
Prepaid expenses and other current assets 1,017
Total current assets 3,714
Property and equipment 4,437
Software 281
Intangible assets 38,064
Restricted cash 183
Other assets 195
Total assets acquired 46,874
Liabilities
Current liabilities:
Accounts payable 3,344
Accrued expenses 3,963
Deferred revenue, current portion 576
Current maturities of capital lease obligations 557
Total current liabilities 8,440
Capital lease obligations, net of current maturities 552
Deferred tax liabilities, net, non-current 8,487
Total liabilities assumed 17,479
Net identifiable assets acquired 29,395
Goodwill 63,294
Total purchase price $ 92,689
The intangible assets as of the closing date of the Acquisition included:
Amount
Customer relationships $ 37,720
Non-compete agreements 104
Trade names 240
$38,064
Indications of fair value of the intangible assets acquired in
connection with the acquisition were determined using either the income,
market or replacement cost methodologies. The intangible assets are
being amortized over periods which reflect the pattern in which economic
benefits of the assets are expected to be realized. The customer
relationships are being amortized on an accelerated basis over an
estimated useful life of ten years; developed technology is being
amortized on an accelerated basis over an estimated useful life of eight
years; and the non-compete agreements and trade names are being
amortized on a straight-line basis over two years.