Business Acquisitions

As part of our business strategy, we have acquired, and may acquire in the future, certain businesses and technologies primarily to expand our products and service offerings.

Fiscal Year 2017 Acquisitions

In fiscal year 2017, we acquired several businesses in our Enterprise, Healthcare and Mobile segments that were not significant individually or in the aggregate. The total aggregate consideration for these acquisitions was $97.2 million, including the issuance of 0.8 million shares of our common stock valued at $13.4 million and an $8.3 million estimated fair value for future contingent payments. The results of operations of these acquisitions have been included in our financial results since their respective acquisition dates.

The fair value estimates for the assets acquired and liabilities assumed for acquisitions completed during fiscal year 2017 were based upon preliminary calculations and valuations, and our estimates and assumptions for each of these acquisitions are subject to change as we obtain additional information during the respective measurement periods (up to one year from the respective acquisition dates). The primary areas of preliminary estimates that were not yet finalized related to certain assets and liabilities acquired. There were no significant changes to the fair value estimates during the current year.

We have not furnished pro forma financial information related to our current year acquisitions because such information is not material, individually or in the aggregate, to our financial results. We have also not presented revenue or the results of operations for each of these business combinations, from the date of acquisition, as they were similarly neither material nor significant to our consolidated financial results.

Fiscal Year 2016 Acquisitions

Acquisition of TouchCommerce, Inc.

In August 2016, we acquired all of the outstanding stock of TouchCommerce. TouchCommerce is a provider of omni-channel solutions to engage their customers on any device through online chat, guides, personalized content, and other automated tools, resulting in enhanced customer experience, increased revenue and reduced support costs. We expect this acquisition to expand our customer care solutions with a range of new digital offerings, including live chat, customer analytics and personalization solutions within our Enterprise segment. We expect to be able to provide an end-to-end engagement platform that merges intelligent self-service with assisted service to increase customer satisfaction, strengthen customer loyalty and improve business results. The aggregate consideration for this transaction was $217.5 million, and included $113.0 million paid in cash and $85.0 million paid in our common stock. The remaining $19.5 million is expected to be paid in November 2017 at the conclusion of an indemnity period in either cash or our common stock, at our election. The acquisition was a stock purchase and the goodwill resulting from this acquisition is not deductible for tax purposes. The results of operations for this acquisition have been included in our Enterprise segment from the acquisition date.

A summary of the preliminary allocation of the purchase consideration for our TouchCommerce acquisition is as follows (dollars in thousands):



	Touch-Commerce
Purchase consideration:
Cash	$	113,008
Common stock^(a)	85,000
Deferred acquisition payment	19,458
Total purchase consideration	$	217,466

Allocation of the purchase consideration:
Cash	$	137
Accounts receivable^(b)	14,897
Goodwill	117,178
Identifiable intangible assets^(c)	110,800
Other assets	1,521
Total assets acquired	244,533
Current liabilities	(4,134		)
Deferred tax liability	(19,515		)
Deferred revenue	(2,784		)
Other long term liabilities	(634		)
Total liabilities assumed	(27,067		)
Net assets acquired	$	217,466


^(a)	5,749,807 shares of our common stock valued at $14.78 per share were issued at closing.


^(b)	Accounts receivable have been recorded at their estimated fair values and the fair value reserve was not material.


^(c)	The following are the identifiable intangible assets acquired and their respective weighted average useful lives, as determined based on preliminary valuations (dollars in thousands):



	TouchCommerce
	Amount		Weighted Average Life (Years)
Core and completed technology	$	26,000	6.0
Customer relationships	81,600		10.0
Trade names	3,200		5.0
Total	$	110,800

Other Fiscal Year 2016 Acquisitions

During fiscal year 2016, we acquired several other businesses in our Healthcare segment that were not significant individually or in the aggregate. The total aggregate cash consideration for these acquisitions was $50.4 million including an estimated fair value for future contingent payments. The results of operations of these acquisitions have been included in our financial results since their respective acquisition dates.

Acquisition-Related Costs, net

Acquisition-related costs include costs related to business and other acquisitions, including potential acquisitions. These costs consist of (i) transition and integration costs, including retention payments, transitional employee costs and earn-out payments treated as compensation expense, as well as the costs of integration-related activities, including services provided by third-parties; (ii) professional service fees and expenses, including financial advisory, legal, accounting, and other outside services incurred in connection with acquisition activities, and disputes and regulatory matters related to acquired entities; and (iii) adjustments to acquisition-related items that are required to be marked to fair value each reporting period, such as contingent consideration, and other items related to acquisitions for which the measurement period has ended, such as gains or losses on settlements of pre-acquisition contingencies.

The components of acquisition-related costs, net are as follows (dollars in thousands):



	Three Months Ended June 30,					Nine Months Ended June 30,
	2017		2016			2017			2016
Transition and integration costs	$	3,722	$	1,332		$	11,044		$	3,367
Professional service fees	3,905		3,531			11,896			6,131
Acquisition-related adjustments	19		(142		)	(889		)	(1,072		)
Total	$	7,646	$	4,721		$	22,051		$	8,426