On October 3, 2018, we completed our asset acquisition of EDIAdmin, a privately held company providing end-to-end integration solutions, featuring a dedicated Integration Platform as a Service (“iPaaS”) called Cloud Hybrid Integration Platform (“CHIP”) and collaborative managed services for leading systems and applications, both cloud and on-premise. Pursuant to the asset purchase agreement, we paid $7.5 million in cash to the owner of EDIAdmin. The purchase agreement also allowed the seller to receive up to $1.7 million in cash, which becomes payable in first quarter 2020 and 2021 contingent upon the completion of certain revenue milestones at December 31, 2019 and December 31, 2020. During the year ended December 31, 2018, we recognized other expense of $0.1 million in our consolidated statements of comprehensive income due to the remeasurement of the contingent liability. See Note E for further disclosures on the remeasurement of the contingent liability. The purchase accounting for the EDIAdmin acquisition is complete as of December 31, 2018.

We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We engaged a third-party valuation firm to assist us in the determination of the value of the purchased intangible assets and of the earn-out liability. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to a trained workforce and other buyer-specific value resulting from expected synergies, including long-term cost savings, which are not included in the fair values of identifiable assets.

Cash	$	7,461
Fair value of earn-out liability		1,274
	$	8,735

The final purchase price is subject to a net working capital adjustment to be determined by the sellers and us, pursuant to the terms of the purchase agreement.

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

Current assets	$	631
Goodwill		4,871
Intangible assets		3,400
Current liabilities		(57	)
Deferred revenue		(110	)
	$	8,735

The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives:

	Estimated		Estimated
	Fair Value		Life
Purchased Intangible Assets	(in thousands)		(in years)
Subscriber relationships	$	600		10
Developed technology		2,800		10
Total	$	3,400

The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense for the period from October 3, 2018 through December 31, 2018 was $0.1 million.

On December 18, 2018, we completed our asset acquisition of CovalentWorks, a privately held company providing cloud-based EDI solutions to small- and medium-sized businesses. Pursuant to the asset purchase agreement, we paid $19.4 million in cash and issued $3.4 million in common stock, or 40,478 shares, to the owners of CovalentWorks. The purchase accounting for the CovalentWorks acquisition has not been finalized as of December 31, 2018. Provisional amounts are primarily related to intangible assets. We expect to finalize the allocation of purchase price within the one-year measurement-period following the acquisition.

We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We engaged a third-party valuation firm to assist us in the determination of the value of the purchased intangible assets. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to buyer-specific value resulting from expected synergies, including long-term cost savings, which are not included in the fair values of identifiable assets.

Cash	$	19,431
SPS Commerce, Inc. common stock		3,371
	$	22,802

The final purchase price is subject to a net working capital adjustment to be determined by the sellers and us, pursuant to the terms of the purchase agreement.

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

Current assets	$	244
Property and equipment		44
Goodwill		15,402
Intangible assets		7,210
Current liabilities		(56	)
Deferred revenue		(42	)
	$	22,802

The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives:

	Estimated		Estimated
	Fair Value		Life
Purchased Intangible Assets	(in thousands)		(in years)
Subscriber relationships	$	7,100		7
Developed technology		100		3
Trade names		10		1
Total	$	7,210

The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense for the period from December 18, 2018 through December 31, 2018 was not material.