Acquisition of AdvantageMS

9 Months Ended

Oct. 31, 2013

Business Combinations [Abstract]

Acquisition of AdvantageMS

Note 2. Acquisition of AdvantageMS

On June 20, 2013, we completed our acquisition of Advantage Management Solutions, Inc. (AdvantageMS), a privately held supplier of healthcare provider data and related software and services. We expect this acquisition to support our Veeva Network solution through the addition of a database of healthcare professionals, healthcare organizations and other supplemental data. Total closing consideration for the purchase was $10.5 million in cash. Approximately 15% of the closing consideration has been placed into escrow to be held for 18 months following the close as security for losses incurred by us in the event of certain breaches of representations and warranties by AdvantageMS. Additionally, we paid approximately $1.9 million in cash as part of a net working capital adjustment. There are no contingent cash payments related to this transaction. As of October 31, 2013, we had incurred $0.2 million in acquisition-related transaction costs. The assets, liabilities and operating results of AdvantageMS have been reflected in our consolidated financial statements from the date of acquisition and have not been material.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The primary areas of those preliminary estimates that are not yet finalized relate to income and non-income based taxes (in thousands):

Purchase price
Cash	$	12,363
Allocation of purchase price
Cash	$	408
Accounts receivable		1,636
Intangible assets		7,380
Deferred tax asset		1,593
Other current and non-current assets		218
Deferred tax liability		(3,367	)
Other current and non-current liabilities		(214	)
Goodwill		4,709
Total purchase price	$	12,363

We did not record any in-process research and development in connection with the acquisition.

Intangible assets are being amortized on a straight-line basis over an estimated useful life ranging from three to six years. Goodwill of $4.7 million represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets and represents the future economic benefits of the data technology contributions in support of our Veeva Network solution. Goodwill is not deductible for U.S. tax purposes.

Each component of identifiable intangible assets acquired in connection with the above acquisition as of October 31, 2013 were as follows (dollar amounts in thousands):

	October 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net		Remaining Useful Life (in years)
Data update technology	$	3,680	$	268	$	3,412		4.6
Database		2,570		234		2,336		3.6
Customer relationships		1,020		62		958		5.6
Software		110		13		97		2.6
	$	7,380	$	577	$	6,803

Also included in intangible assets on the consolidated balance sheet is $0.2 million of technology acquired on April 25, 2013. The carrying value of these acquired intangibles as of October 31, 2013 was $0.2 million.

As of October 31, 2013, the expected remaining future amortization expense for purchased intangible assets for each of our fiscal years ending is as follows (in thousands):

Period	Estimated Amortization Expense
Remainder of fiscal 2014	$	396
Fiscal 2015		1,585
Fiscal 2016		1,585
Fiscal 2017		1,563
Fiscal 2018		1,154
Thereafter		520
Total	$	6,803

Pro forma results of operations have not been presented because the effect of this acquisition was not material to the consolidated financial statements.