On October 13, 2020, the Company acquired from certain individuals (collectively, the “Cisneros Sellers”), 51% of the issued and outstanding shares of stock of a digital advertising solutions company that, together with its subsidiaries, does business under the name Cisneros Interactive (“Cisneros Interactive”). The acquisition, funded from cash on hand, included a purchase price of approximately $29.9 million in cash. The Company concluded that the remaining 49% of the issued and outstanding shares of Cisneros Interactive stock was considered to be a noncontrolling interest.

In connection with the acquisition, the Company also entered into a Put and Call Option Agreement (the “Cisneros Put and Call Agreement”). Subject to the terms of the Cisneros Put and Call Agreement, if certain minimum EBITDA targets are met, the Sellers had the right (the “Cisneros Put Option”), between March 15, 2024 and June 13, 2024, to cause the Company to purchase all (but not less than all) the remaining 49% of the issued and outstanding shares of Cisneros Interactive stock at a purchase price to be based on a pre-determined multiple of six times Cisneros Interactive’s 12-month EBITDA in the preceding calendar year. The Cisneros Sellers also had the right to exercise the Cisneros Put Option upon the occurrence of certain events, between March 2022 and April 2024.

Additionally, subject to the terms of the Cisneros Put and Call Agreement, the Company had the right (the “Cisneros Call Option”), in calendar year 2024, to purchase all (but not less than all) the remaining 49% of the issued and outstanding shares of Cisneros Interactive stock at a purchase price to be based on a pre-determined multiple of six times of Cisneros Interactive’s 12-month EBITDA in calendar year 2023.

Applicable accounting guidance requires an equity instrument that is redeemable for cash or other assets to be classified outside of permanent equity if it is redeemable (a) at a fixed or determinable price on a fixed or determinable date, (b) at the option of the holder, or (c) upon the occurrence of an event that is not solely within the control of the issuer.

As a result of the Cisneros Put Option and Call Option redemption features, and because the redemption was not solely within the control of the Company, the noncontrolling interest was considered redeemable, and was classified in temporary equity within the Company’s Consolidated Balance Sheets initially at its acquisition date fair value. The noncontrolling interest was adjusted each reporting period for income (or loss) attributable to the noncontrolling interest as well as any applicable distributions made. Since the noncontrolling interest was not then redeemable under the terms of the Cisneros Put and Call Agreement and it was not probable that it would become redeemable, the Company was not required to adjust the amount presented in temporary equity to its redemption value in prior periods. The fair value of the redeemable noncontrolling interest which includes the Cisneros Put and Call Agreement recognized on the acquisition date was $30.8 million.

The following is a summary of the final purchase price allocation (in millions):


Cash	$	8.7
Accounts receivable		50.5
Other assets		8.3
Intangible assets subject to amortization		41.7
Goodwill		10.5
Current liabilities		(48.1	)
Deferred tax		(10.9	)
Redeemable noncontrolling interest		(30.8	)

Intangible assets subject to amortization acquired includes:


Intangible Asset	Estimated Fair Value (in millions)		Weighted average life (in years)
Publisher relationships	$	34.4	10.0
Advertiser relationships		5.2	4.0
Trade name		1.7	2.5
Non-Compete agreements		0.4	4.0

The fair value of the assets acquired included trade receivables of $50.5 million. The gross amount due under contract was $54.0 million, of which $3.5 million was expected to be uncollectable. Subsequent to the initial purchase price allocation, and during the measurement period, the Company increased other assets and deferred tax by $2.1 million and $0.3 million, respectively, and decreased goodwill by $1.8 million, to reflect final tax amounts.

The goodwill, which is not expected to be deductible for tax purposes, is assigned to the Company’s digital segment and is attributable to Cisneros Interactive’s workforce and synergies from combining Cisneros Interactive’s operations with the Company's operations.

On September 1, 2021, the Company acquired the remaining 49% of the issued and outstanding shares of Cisneros Interactive stock, and as of that date owns 100% of the issued and outstanding shares of Cisneros Interactive stock. As consideration for the acquisition of the remaining 49% of the issued and outstanding shares of Cisneros Interactive stock, the Company agreed to pay the Cisneros Sellers contingent earn-out payments, based on a predetermined multiple of six times Cisneros Interactive’s 12-month EBITDA targets in calendar years 2021, 2022 and 2023, each divided by three, and an additional payment equal to $10,000,000, less an amount (up to $10,000,000) equal to 49% of any amounts paid by Cisneros Interactive for future acquisitions. The fair value of the contingent consideration recognized on the acquisition date was $84.4 million, which was estimated by applying the real options approach. Key assumptions include risk-neutral expected growth rates based on management’s assessments of expected growth in EBITDA, adjusted by appropriate factors capturing their correlation with the market and volatility, discounted at a cost of debt rate ranging from 6.5% to 7.2% over the three-year period. These are significant inputs that are not observable in the market, which ASC 820-10-35 refers to as Level 3 inputs. The Company recognizes any future changes in fair value of the contingent liability in earnings.

As part of the Company’s acquisition of the remaining 49% of the issued and outstanding shares of Cisneros Interactive stock, the Cisneros Put and Call Agreement was terminated effective September 1, 2021. Applicable accounting guidance requires changes in the Company's ownership interest while the Company retains its controlling financial interest in its subsidiary to be accounted for as an equity transaction. Therefore, no gain or loss was recognized in relation to the acquisition of the remaining 49% of the issued and outstanding shares of stock of Cisneros Interactive. As of the acquisition date, the carrying amount of the noncontrolling interest was adjusted to reflect the change in the Company's ownership interest, and the difference between the fair value of the contingent consideration and the amount by which the noncontrolling interest was recognized as a decrease to paid-in capital in the Consolidated Balance Sheets and the Statements of Stockholders' Equity.

Effective December 31, 2021, the Company agreed to pay certain of the Cisneros Sellers who are individual persons an accelerated earn-out in the aggregate amount of $14.7 million based on the EBITDA for calendar year 2021, which was paid in January 2022.

In April 2022, the Company paid all the Cisneros Sellers an earn-out in the aggregate amount of $28.9 million based on the final EBITDA for calendar year 2021. Additionally, effective September 13, 2022, the Company agreed to pay Sorin Properties, S.L., one of the Cisneros Sellers, an accelerated earn-out of $21.7 million based on EBITDA for the four prior fiscal quarters, which amount was paid in September 2022.

As of December 31, 2022 the contingent liability was adjusted to its fair value of $41.4 million, of which $30.0 million was a current liability and $11.4 million was a noncurrent liability. As of March 31, 2023 the contingent liability was adjusted to its current fair value of $34.9 million, of which $28.3 million is a current liability and $6.6 million is a noncurrent liability.

The change in the fair value of the contingent liability during the three-month periods ended March 31, 2023 and 2022, of $6.5 million income and $0.5 million expense, respectively, is reflected in the Consolidated Statements of Operations.

On July 1, 2021, the Company acquired 100% of the issued and outstanding shares of stock of MediaDonuts, a digital advertising solutions company in Southeast Asia. The acquisition, funded from the Company’s cash on hand, includes a purchase price of approximately $15.1 million in cash, which amount was adjusted at closing to approximately $17.1 million due to customary purchase price adjustments for cash, indebtedness and estimated working capital. Subsequently, the purchase price was adjusted downward by approximately $1.2 million, based on actual working capital acquired. Additionally, the transaction includes up to $7.4 million in contingent earn-out payments based upon the achievement of certain EBITDA targets in calendar years 2021 and 2022, and an additional earn-out based upon the achievement of certain year-over-year EBITDA growth targets in calendar years 2023 and 2024, calculated as a pre-determined multiple of EBITDA for each of those years. The total purchase price for the acquisition, including the fair value of the contingent consideration, was $36.2 million.

The following is a summary of the final purchase price allocation (in millions):


Cash	$	4.3
Accounts receivable		9.9
Other assets		1.8
Intangible assets subject to amortization		22.8
Goodwill		13.2
Current liabilities		(10.1	)
Deferred tax		(4.0	)
Debt		(1.7	)

Intangible assets subject to amortization acquired includes:


Intangible Asset	Estimated Fair Value (in millions)		Weighted average life (in years)
Publisher relationships	$	16.9	10.0
Advertiser relationships		3.7	4.0
Trade name		2.0	5.0
Non-Compete agreements		0.2	4.0

The fair value of the assets acquired included trade receivables of $9.9 million. The gross amount due under contract was $10.2 million, of which $0.3 million was expected to be uncollectable.

The goodwill, which is not expected to be deductible for tax purposes, is assigned to the Company’s digital segment and is attributable to MediaDonuts' workforce and expected synergies from combining MediaDonuts' operations with the Company's operations.

As noted above, the acquisition of MediaDonuts includes a contingent consideration arrangement that requires additional consideration to be paid by the Company to the selling stockholders of MediaDonuts, based on a pre-determined multiple of MediaDonuts' 12-month EBITDA targets in calendar years 2021 through 2024. The fair value of the contingent consideration recognized on the acquisition date of $20.3 million was estimated by applying the real options approach. Key assumptions include risk-neutral expected growth rates based on management’s assessments of expected growth in EBITDA, adjusted by appropriate factors capturing their correlation with the market and volatility, discounted at a cost of debt rate ranging from 5.8% to 6.7% over the three year period. These are significant inputs that are not observable in the market, which ASC 820-10-35 refers to as Level 3 inputs.

As of December 31, 2022 the contingent liability was adjusted to its fair value of $22.2 million, of which $6.5 million was a current liability and $15.7 million was a noncurrent liability. As of March 31, 2023 the contingent liability was adjusted to its current fair value of $23.9 million, of which $6.6 million is a current liability and $17.3 million is a noncurrent liability.

The change in the fair value of the contingent liability during the three-month periods ended March 31, 2023 and 2022, of $1.7 million expense and $1.6 million expense, respectively, is reflected in the Consolidated Statements of Operations.

On November 1, 2021, the Company acquired 100% of the issued and outstanding shares of stock of 365 Digital, a digital advertising solutions company headquartered in South Africa. The acquisition, funded from the Company’s cash on hand, included an initial purchase price of approximately $1.9 million in cash, which included customary purchase price adjustments for cash, indebtedness and estimated working capital. Subsequently, the purchase price was adjusted to $3.5 million based on a predetermined multiple of EBITDA for the trailing twelve-month period ended March 31, 2022. Additionally, the transaction includes contingent earn-out payments based upon the achievement of certain EBITDA targets in calendar years 2022, 2023 and 2024, calculated as a predetermined multiple of EBITDA for each of those years. The total purchase price for the acquisition, including the fair value of the contingent consideration, was $5.5 million.

The following is a summary of the final purchase price allocation (in millions):


Cash	$	0.5
Accounts receivable		1.1
Intangible assets subject to amortization		2.2
Goodwill		3.7
Current liabilities		(1.4	)
Deferred tax		(0.6	)

Intangible assets subject to amortization acquired includes:


Intangible Asset	Estimated Fair Value (in millions)		Weighted average life (in years)
Publisher relationships	$	1.7	9.0
Advertiser relationships		0.2	4.0
Trade name		0.2	5.0
Non-Compete agreements		0.1	4.0

The fair value of the assets acquired includes trade receivables of $1.1 million. The gross amount due under contract was $1.1 million, of which a de minimis amount was expected to be uncollectable.

The goodwill, which is not expected to be deductible for tax purposes, is assigned to the Company’s digital segment and is attributable to 365 Digital's workforce and expected synergies from combining 365 Digital's operations with the Company's operations.

As noted above, the acquisition of 365 Digital includes a contingent consideration arrangement that requires additional consideration to be paid by the Company to the selling stockholders of 365 Digital, based on a pre-determined multiple of 365 Digital's 12-month EBITDA targets in calendar years 2022 through 2024. The fair value of the contingent consideration recognized on the acquisition date of $2.0 million was estimated by applying the real options approach. Key assumptions include risk-neutral expected growth rates based on management’s assessments of expected growth in EBITDA, adjusted by appropriate factors capturing their correlation with the market and volatility, discounted at a cost of debt rate ranging from 7.6% to 8.3% over the three-year period. These are significant inputs that are not observable in the market, which ASC 820-10-35 refers to as Level 3 inputs.

As of December 31, 2022 the contingent liability was adjusted to its fair value of $0.2 million, all of which was a noncurrent liability. As of March 31, 2023 the contingent liability was adjusted to its current fair value of $0.9 million, of which $0.4 million is a current liability and $0.5 million is a noncurrent liability.

The change in the fair value of the contingent liability during the three-month periods ended March 31, 2023 and 2022, of $0.7 million expense and $3.0 million expense, respectively, is reflected in the Consolidated Statements of Operations.