Acquisitions

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Acquisitions

7. Acquisitions

Forte Payment Systems, Inc.  On October 1, 2018, we acquired Forte for a purchase price of approximately $93 million (approximately $85 million, excluding cash acquired), of which approximately $13 million of the purchase price was initially held back subject to certain tax filings, and then paid in July 2019.  Forte was a leading provider of advanced payment solutions.  The acquisition accelerated our ability to offer a comprehensive suite of next generation payment solutions that enables service providers to provide a differentiated customer experience while also strengthening our position in the revenue management and payment sector and allowed us to grow our footprint into new verticals.  The purchase agreement also includes provisions for $18.8 million of potential future earn-out payments over a four-year measurement period.  In December 2020, CSG amended the term of the earn-out provisions to extend the measurement period an additional year through September 30, 2023.  The earn-out payments are tied to performance-based goals and a defined service period by the eligible recipients and is being accounted for as post-acquisition compensation.  No changes were made to the performance-based goals as a result of the extension.  As of December 31, 2020, we have accrued $2.4 million related to the potential earn-out payments.

Tekzenit, Inc.  On January 2, 2020, we acquired Tekzenit Inc. (“Tekzenit”) for a purchase price of approximately $10 million.  This acquisition will allow us to accelerate our go-to-market approach serving customers who are focused on improving their customers’ experience while transforming their business.  The purchase agreement includes provisions for additional purchase price (“Provisional Purchase Price”) payments in the form of earn-out and qualified sales payments for up to $10 million over a three-year measurement period upon meeting certain financial and sales criteria.  Of the Provisional Purchase Price amount, $6 million is considered contingent purchase price payments, of which $1.5 million was accrued upon acquisition. The remaining $4 million is tied to certain financial and sales criteria over a defined service period by the eligible recipients and is therefore accounted for as post-acquisition compensation.  As of December 31, 2020, we have not accrued any amounts related to the post-acquisition compensation payments due to the uncertainty of payment.  

As of December 31, 2020, the purchase accounting for the Tekzenit acquisition was complete.  We recorded goodwill of $9.1 million and acquired customer contracts of $2.9 million and liabilities assumed primarily include the contingent purchase price liabilities of $1.5 million.