On May 11, 2022, the Company completed its acquisition of Pond5, for approximately $218.3 million, subject to customary working capital adjustments. The total purchase price was paid with existing cash on hand as well as a $50 million drawdown on a newly established revolving credit facility (See Note 7). In connection with the acquisition, the Company incurred approximately $3.6 million of transaction costs, which is included in general and administrative expenses on the Consolidated Statements of Operations.

Pond5 is a New York based company that operates a video-first content marketplace for royalty-free and editorial video. The Company believes its acquisition of this video-first content marketplace provides expanded offerings across footage, image and music.

The identifiable intangible assets, which include customer relationships, developed technology and trade names have weighted average useful lives of approximately 12.2 years, 5 years and 10 years, respectively. The goodwill arising from the transaction is primarily attributable to expected operational synergies and is not deductible for income tax purposes.

On May 28, 2022, the Company completed its acquisition of Splash News, for approximately $6.3 million. The total purchase price was paid with existing cash on hand in the three months ended June 30, 2022. In connection with the acquisition, the Company incurred approximately $0.3 million of transaction costs, which is included in general and administrative expenses on the Consolidated Statements of Operations.

Splash News is a United Kingdom based entertainment news network and is a source for image and video content across celebrity, red carpet and live events. The Company believes this acquisition expands Shutterstock Editorial’s Newsroom offering for access to premium exclusive content.

The identifiable intangible asset, developed technology, has a useful life of approximately 4 years. The goodwill arising from the transaction is primarily attributable to expected operational synergies and is not deductible for income tax purposes.

The Pond5 and Splash News transactions were accounted for using the acquisition method and, accordingly, the results of the acquired businesses have been included in the Company’s results of operations from the respective acquisition dates. For the three months ended June 30, 2022, revenue of $7.2 million was included in the Consolidated Statements of Operations related to these acquired companies. The fair value of consideration transferred in these business combinations has been allocated to the intangible and tangible assets acquired and liabilities assumed at the acquisition date, with the remaining unallocated amount recorded as goodwill. The identifiable intangible assets of these acquisitions are being amortized on a straight-line basis. The fair value of the customer relationships was determined using a variation of the income approach known as the multiple-period excess earnings method. The fair value of the trade name was determined using the relief-from-royalty method, and the fair value of the developed technology was determined using the relief-from-royalty and the cost to recreate methods.


Assets acquired and liabilities assumed (in thousands):	Pond51		Splash News1		Total
Cash and cash equivalents	$	11,675	$	180	$	11,855
Accounts receivable	1,273		500		$	1,773
Other assets	1,102		525		1,627

Right of use asset	1,674		—		1,674
Intangible assets:					—
Customer relationships	41,900		—		41,900
Trade name	4,700		—		4,700
Developed technology	25,300		1,263		26,563

Intangible assets	71,900		1,263		73,163
Goodwill	154,949		5,565		160,514
Deferred tax asset	—		—		—
Total assets acquired	$	242,573	$	8,033	$	250,606
					—
Accounts payable, accrued expenses and other liabilities	(8,090)		(1,528)		(9,618)
Contributor royalties payable	(3,039)				(3,039)

Deferred revenue	(3,705)		—		(3,705)
Deferred tax liability	(7,434)		(189)		(7,623)
Lease liability	(2,038)		—		(2,038)
Total liabilities assumed	(24,306)		(1,717)		(26,023)
Net assets acquired	$	218,267	$	6,316	$	224,583

On September 3, 2021, the Company completed the acquisition of substantially all of the assets and assumption of certain liabilities from PicMonkey, for approximately $109.4 million. The total purchase price was paid with existing cash on hand in the three months ended September 30, 2021. In connection with the acquisition, the Company incurred approximately $2 million of transaction costs, which is included in general and administrative expenses on the Consolidated Statements of Operations.

PicMonkey is a Washington-based company that operates an online graphic design and image editing platform that enables creators of any skill level to design high-quality visual assets. The Company believes this acquisition provides Shutterstock’s global customer community with professional-grade, easy-to-use design tools.

The identifiable intangible assets, which include customer relationships, developed technology and trade names, have weighted average lives of approximately 12 years, 5 years and 10 years, respectively. The goodwill arising from the transaction is primarily attributable to expected operational synergies and is expected to be deductible for income tax purposes.

On February 1, 2021, the Company completed its acquisition of TurboSquid, Inc. (“TurboSquid”), for approximately $77.3 million. The total purchase price was paid with existing cash on hand in the three months ended March 31, 2021. In connection with the acquisition, the Company incurred approximately $1.6 million of transaction costs, which is included in general and administrative expenses on the Consolidated Statements of Operations.

TurboSquid is a Louisiana-based company that operates a marketplace offering more than one million 3D models, a marketplace for 2D images derived from 3D objects and a digital asset management solution. The Company believes this

The identifiable intangible assets, which include customer relationships, developed technology, trade names and contributor content, have weighted average useful lives of approximately 12 years, 4.7 years, 10 years and 4 years, respectively. The goodwill arising from the transaction is primarily attributable to expected operational synergies and is not deductible for income tax purposes.

The PicMonkey and TurboSquid transactions were accounted for using the acquisition method and, accordingly, the results of the acquired businesses have been included in the Company’s results of operations from the respective acquisition dates. The fair value of consideration transferred in these business combinations has been allocated to the intangible and tangible assets acquired and liabilities assumed at the acquisition date, with the remaining unallocated amount recorded as goodwill. The identifiable intangible assets of these acquisitions are being amortized on a straight-line basis. The fair value of the customer relationships was determined using a variation of the income approach known as the multiple-period excess earnings method. The fair value of the trade names and developed technology were determined using the relief-from-royalty method, and the fair value of the contributor content was determined using the cost-to-recreate method.


Assets acquired and liabilities assumed (in thousands):	PicMonkey		TurboSquid		Total
Cash and cash equivalents	$	—	$	5,165	$	5,165

Other assets	502		1,553		2,055
Property and equipment	—		472		472
Right of use asset	1,420		—		1,420
Intangible assets:					—
Customer relationships	28,800		9,000		37,800
Trade name	3,000		2,200		5,200
Developed technology	12,900		7,800		20,700
Contributor content	—		2,500		2,500
Intangible assets	44,700		21,500		66,200
Goodwill	71,607		59,491		131,098
Deferred tax asset	2,456		—		2,456
Total assets acquired	$	120,685	$	88,181	$	208,866

Accounts payable, accrued expenses and other liabilities	(780)		(4,685)		(5,465)
Contributor royalties payable	—		(2,243)		(2,243)

Deferred revenue	(8,557)		—		(8,557)
Deferred tax liability	(533)		(3,923)		(4,456)
Lease liability	(1,420)		—		(1,420)
Total liabilities assumed	(11,290)		(10,851)		(22,141)
Net assets acquired	$	109,395	$	77,330	$	186,725

The following unaudited pro forma consolidated financial information (in thousands) reflects the results of operations of the Company for the three and six months ended June 30, 2022 and 2021, as if the Pond5 and Splash News acquisitions had been completed on January 1, 2021 and as if the TurboSquid and PicMonkey acquisitions had been completed on January 1, 2020, after giving effect to certain purchase accounting adjustments, primarily related to intangible assets and transaction costs. These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of what the Company’s operating results would have been, had the acquisitions actually taken place at the beginning of the previous annual period.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue
As Reported	$	206,872	$	189,912	$	406,004	$	373,193
Pro Forma	213,452		211,643		426,287		417,316
Income before income taxes
As Reported	$	22,713	$	34,548	$	55,389	$	70,204
Pro Forma	26,326		35,978		58,559		68,941