Acquisitions

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

The below acquisition qualifies as a business combination, and the Company has recorded all assets acquired and liabilities assumed at their acquisition-date fair values. The excess of the purchase price in the acquisition over the fair value of the tangible and identifiable intangible assets acquired less the liabilities assumed has been recorded as goodwill. The goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining the operations of the businesses. There were no transaction expenses associated with business acquisitions for the years ended December 31, 2021 and 2020, and $0.8 million for the year ended December 31, 2019, which are included in general and administrative expenses in the Company’s consolidated statements of operations.

Design Manager

On May 2, 2019, the Company acquired 100% of the outstanding equity of Franklin Potter Associates, Inc. and its subsidiary, doing business as Design Manager, a privately-held company that sells subscriptions to a software solution to interior designers to assist with project management, purchasing, and accounting for a total purchase consideration of $4.2 million, subject to customary purchase price adjustments. The acquisition was intended to further enhance the Company’s offerings to interior designers, as both the 1stDibs and Design Manager platforms offer tools that are integral to their businesses.

The acquisition qualified as a business combination, and the Company recorded all assets acquired and liabilities assumed at their acquisition-date fair values. The excess of the purchase price in the acquisition over the fair value of the tangible and identifiable intangible assets acquired less the liabilities assumed was recorded as goodwill.

The results of Design Manager have been included in the consolidated financial statements since the date of acquisition.

The total purchase consideration as of the acquisition date was as follows (in thousands):


Cash paid at closing	$	2,513
Shares issued at closing	791
Cash to be paid at secondary anniversary of closing	640
Shares to be issued at secondary anniversary of closing	206
Total purchase consideration	$	4,150

The cash to be paid and the shares to be issued at the second anniversary after the closing date represent deferred acquisition consideration that secured the sellers’ indemnity obligations for general representations and warranties of the sellers. To the Company’s knowledge, the representations and warranties were accurate as of the acquisition date and no event or condition has occurred that would result in a claim against the deferred acquisition consideration. Prior to the second anniversary of closing, the deferred acquisition consideration included in the purchase price was recorded in other current liabilities in the Company’s consolidated balance sheets.

The Company recorded the shares to be issued on the second anniversary of closing at fair value of $0.2 million at the time of the acquisition. The shares to be issued were subsequently remeasured to fair value at each reporting date with changes in fair value recognized as a general and administrative expense in the Company’s consolidated statements of operations. Changes in the fair value of the deferred acquisition consideration were $0.4 million and $0.1 million during the years ended December 31, 2021 and 2020, respectively. The 45,152 shares of common stock were issued in May 2021, upon the second anniversary after the closing date, with a final fair value of $0.8 million. Additionally, a cash payment of $0.6 million was made in May 2021. As of December 31, 2021, no deferred acquisition consideration remained on the Company’s consolidated balance sheet.