Acquisition of Qforma CrowdLink

6 Months Ended

Jul. 31, 2015

Business Combinations [Abstract]

Acquisition of Qforma CrowdLink

Note 2. Acquisition of Qforma CrowdLink

On March 31, 2015, we completed our acquisition of the key opinion leader, or KOL, business and products known as Qforma CrowdLink in an all-cash transaction. We expect this acquisition to support our key opinion leader business. Total closing consideration for the purchase was $9.8 million in cash, net of a $0.3 million release of escrow, not yet received by period end. There are no contingent cash payments related to this transaction. As of July 31, 2015, we had incurred $0.3 million in acquisition-related transaction costs which are reflected in general and administrative expenses on our condensed consolidated statements of comprehensive income. The assets, liabilities and operating results of Qforma CrowdLink have been reflected in our consolidated financial statements from the date of acquisition and have not been material.

Through the transaction we acquired the outstanding equity interests of Mederi AG, and the selected other KOL-related business assets and liabilities of Qforma, Inc. and other affiliated entities. Under the acquisition method of accounting, the total preliminary purchase price was allocated to Qforma CrowdLink's net tangible and intangible assets based upon their estimated fair values as of March 31, 2015. The total preliminary purchase price for Qforma CrowdLink was $9.8 million of which $5.8 million was allocated to goodwill, $3.3 million to identifiable intangible assets and $0.6 million to net assets assumed.

Goodwill 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 data-related offerings. Goodwill is not deductible for U.S. tax purposes.

The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the reporting date and are considered preliminary pending finalization of valuation analyses pertaining to intangible assets assumed, liabilities assumed and tax liabilities assumed including calculation of deferred tax assets and liabilities. Changes to amounts recorded as assets or liabilities may result in corresponding adjustments to goodwill during the measurement period (up to one year from the acquisition date).

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

Purchase price
Cash	$	9,750
Allocation of purchase price
Cash	$	56
Accounts receivable		1,085
Intangible assets		3,300
Deferred tax asset		1,312
Other current and non-current assets		50
Deferred tax liability		(1,096	)
Other current and non-current liabilities		(731	)
Goodwill		5,774
Total purchase price	$	9,750

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 four to five years. Each component of identifiable intangible assets acquired in connection with the above acquisition as of July 31, 2015 were as follows (dollar amounts in thousands):

	July 31, 2015
						Net		Remaining
	Estimated		Accumulated			Carrying		Useful Life
	Fair Value		Amortization			Amount		(in years)
Existing technology	$	200	$	(13	)	$	187		4.7
Database		1,800		(120	)		1,680		4.7
Customer relationships		800		(67	)		733		3.7
Software		500		(33	)		467		4.7
	$	3,300	$	(233	)	$	3,067

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