14. Acquisition

During the quarter ended March 28, 2014, the Company acquired the U.S., Canada and Uruguay operations of Technolab International Corporation ("Technolab"), an EPM AMS business.

At closing, the seller received $3.0 million in cash, not subject to vesting, and $1.0 million in shares subject to vesting, which is being recorded as non-cash compensation over the service vesting period. The seller also had the ability to earn an additional $8.0 million in a combination of cash, not subject to service vesting, and stock, subject to service vesting, based on a one-year profitability-based earn-out contingent upon actual results achieved. The entire cash portion of the earn-out was recorded as compensation expense in 2014. The stock portion of the earn-out is being recorded as compensation expense over the service vesting period. During the third quarter of 2015, the Company settled the contingent earn-out with cash and stock issuances in accordance with the agreement.

The purchase accounting resulted in a bargain purchase gain of $3.0 million on the acquisition and intangible assets with definite lives of $7.7 million which will be amortized over periods ranging from 2 years to 5 years.

The following table presents the purchase price allocation of the assets acquired and liabilities assumed, based on the fair values (in thousands):


		Purchase Price
		Allocation
Total consideration	$	3,000
Allocation of purchase price
Cash		522
Accounts receivable		1,346
Total current assets acquired		1,868
Intangible assets		7,749
Total assets acquired		9,617

Accrued expenses and other liabilities		1,711
Deferred tax liability		1,891
Total liabilities acquired		3,602

Net assets identifiable assets	$	6,015

Bargain purchase gain on acquisition	$	3,015

The application of the acquisition method of accounting resulted in a bargain purchase gain of approximately $3.0 million.

Pro forma results of Technolab have not been presented as the acquisition closed at the beginning of 2014 and therefore, the full year results of Technolab are included in the Company’s consolidated financial results. Technolab contributed total revenue of $10.3 million and contribution before depreciation, amortization, interest, corporate overhead allocation and taxes of $3.3 million.

The acquired intangible assets with definite lives are amortized over periods ranging from 2 to 5 years. The following table presents the intangible assets acquired from Technolab:


Category		Amount (in thousands)	Useful Life (in years)

Customer Base	$	4,727	5
Trade Name		115	2
Customer Backlog		2,031	2
Non-Compete		876	5
	$	7,749