Business Combinations

3 Months Ended

Jun. 30, 2012

Business Combinations [Abstract]

Business Combinations

Business Combinations

On May 1, 2012, the Company acquired The Poseidon Group, Inc. ("Poseidon"), a leading provider of hospital emergency department documentation and web-based electronic medical record solutions. The Poseidon purchase price totaled $2,533. Poseidon will operate under the Hospital Solutions Division.

On April 16, 2012, the Company acquired Matrix, which provides revenue cycle management services, healthcare IT solutions and training, implementation and support centered around NextGen Healthcare's suite of practice management software and electronic health record solutions. The Matrix purchase price totaled $13,841. The purchase price included contingent consideration payable over an 18-month period with a fair value of $2,862, which shall not exceed $4,000. Matrix will operate under the RCM Services Division.

The Company accounted for the Matrix and Poseidon acquisitions as purchase business combinations. The purchase price for each was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the applicable acquisition date. The fair value of the assets acquired and liabilities assumed represent management’s estimate of fair value. The estimated fair value of the acquired tangible and intangible assets and liabilities assumed were determined using multiple valuation approaches depending on the type of tangible or intangible asset acquired, including but not limited to the income approach, the excess earnings method and the relief from royalty method approach.

The total purchase price for Matrix and Poseidon acquisitions during the three months endedJune 30, 2012 are summarized as follows:

	Matrix		Poseidon
Cash paid	$	5,073	$	2,033
Purchase price holdback	853		500
Common stock issued at fair value	3,953		—
Contingent consideration	2,862		—
Non-compete agreement	1,100		—
Total purchase price	$	13,841	$	2,533

The following table summarizes the final purchase price allocation for the Matrix and Poseidon acquisitions:

	Matrix			Poseidon
Fair value of the net tangible assets acquired and liabilities assumed:
Current assets (including accounts receivable of $1,287 and $111 for Matrix and Poseidon, respectively)	1,755			143
Equipment and improvements and other long-term assets	966			39
Accounts payable and accrued liabilities	(746		)	—
Deferred revenues	—			(18		)
Total net tangible assets acquired and liabilities assumed	1,975			164
Fair value of identifiable intangible assets acquired:
Trade Name	150			—
Customer relationships	8,650			800
Software technology	—			1,150
Non-compete agreement	1,100			—
Goodwill	1,966			419
Total identifiable intangible assets acquired	11,866			2,369
Total purchase price	$	13,841		$	2,533

The pro forma effects of the Matrix and Poseidon acquisitions would not have been material to the Company’s results of operations and are therefore not presented.