Business Combination

On July 3, 2017, EVERTEC’s main operating subsidiary, EVERTEC Group, and EVERTEC Panama, S.A. ("EVERTEC Panama") closed on the direct and indirect acquisition of 100% of the share capital of PayGroup, by entering into a share purchase agreement (Contrato de Compraventa de Acciones), by and among EVERTEC Group, EVERTEC Panama, Fondo de Inversión Privado Mater, Inversiones San Bernardo SpA, Asesorías e Inversiones Supernova SpA, Inversiones y Asesorías Bayona Limitada, Inversiones Hagerdorn y Morales Limitada, Christian Hagedorn Hitschfeld and Inversiones Vaimaca Limitada. The PayGroup acquisition expands the Company's presence in Latin America to eight new countries and increases the Company's payment solutions offerings. During the third quarter of 2017, EVERTEC Panama ceased being a shareholder in PayGroup and EVERTEC Group became 100% owner of PayGroup.

The Company accounted for this transaction as a business combination. The following table details the fair value of assets acquired and liabilities assumed from the PayGroup acquisition:



(In thousands)	Assets/Liabilities (at fair value)
Cash and cash equivalents	$	1,834
Accounts Receivable	3,778
Prepaid expenses and other assets	535
Property and equipment	1,082
Long-term deferred tax asset	834
Goodwill	26,931
Other intangible assets	19,340
Other long-term assets	499
Total assets acquired	54,833
Accrued liabilities	2,092
Accounts payable	1,965
Unearned income	946
Long-term debt	1,141
Long-term deferred tax liability	2,904
Other long-term liabilities	1,115
Total liabilities assumed	$	10,163

The following table details the major groups of intangible assets acquired and the weighted average amortization period for these assets:



(Dollar amounts in thousands)	Amount		Weighted Average Life
Customer Relationships	$	9,440	12
Trademark or tradenames	1,760		14
Software packages	8,140		10
Total	$	19,340	15

Refer to Note 9 Goodwill for detail of goodwill allocated by operating segments. The goodwill is primarily attributed to increased synergies. None of the goodwill is deductible for income tax purposes.

Revenues and earnings from the PayGroup acquisition were insignificant for the year ended December 31, 2017. Pro forma results of operations have not been presented because the effect of this business combination is not material to the consolidated financial condition and results of operations.

The Company completed two acquisitions in 2016 that were not significant, individually or in the aggregate, a 65% equity interest in Processa, S.A.S, a Colombian payment processing company for $6.4 million, including a customer relationship of $3.1 million, and Accuprint, Inc, a data management and printing services company for $9.7 million, including a customer relationship of $9.1 million. In connection with the Accurpint, Inc purchase, the Company recorded a contingent liability of $1.1 million. The results of operations and financial position of these entities are included in the Consolidated Financial Statements from and after the date of acquisition.