Ascade Acquisition

9 Months Ended

Sep. 30, 2012

Ascade Acquisition [Abstract]

ASCADE ACQUISITION

3. ASCADE ACQUISITION

On July 13, 2012, we acquired Ascade Holdings AB (“Ascade”) for approximately $19 million in cash. Ascade is an independent Swedish software company which provides trading and routing software solutions to telecommunications companies globally. Ascade’s trading and routing software solution, Ascade7, will be combined with our Wholesale Business Management Solution suite to strengthen our global leadership position in the telecommunications wholesale marketplace. The acquisition also expands our geographic presence, bringing product specialists and support resources closer to our wholesale customers worldwide.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):

Current assets	$	5,375
Fixed assets		137
Acquired customer relationships		5,640
Acquired technology assets		3,590
Goodwill		9,331
Total assets acquired		24,073
Current liabilities		(4,828	)
Total liabilities assumed		(4,828	)
Net assets acquired	$	19,245

The above estimated fair values of assets acquired and liabilities assumed are considered provisional and are based on the information that was available as of the date of the Ascade acquisition to estimate the fair value of assets acquired and liabilities assumed. We believe that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but we are waiting for additional information, primarily related to estimated values of certain items within current assets and current liabilities, and to estimated values of certain net deferred income tax assets, necessary to finalize those fair values. Thus the provisional measurements of fair value set forth above are subject to change. Such changes are not expected to be significant. We expect to finalize the valuation and complete the purchase price allocation as soon as practicable, but not later than one year from the acquisition date.

The Ascade goodwill has been assigned to our one reportable segment. The estimated lives assigned to the acquired customer relationships and the acquired technology assets range from approximately 5 – 10 years, and 10 years, respectively. Amortization expense related to these acquired intangible assets is recognized based upon the pattern in which the economic benefits of the acquired intangible assets are expected to be received. The Ascade acquired intangible assets and goodwill are not deductible for income tax purposes.

The results of operations of Ascade are included in the accompanying Condensed Consolidated Statements of Income for the period subsequent to the acquisition date. Pro forma information on our historical results of operations to reflect the acquisition of Ascade is not presented as Ascade’s results of operations during prior periods are not material to our results of operations.