Business Combinations

12 Months Ended

Mar. 31, 2014

Business Combinations [Abstract]

Business Combinations

Business Combinations

On September 9, 2013, the Company acquired 100% of the outstanding capital stock of Mirth, a global leader in health information technology that helps clients achieve interoperability. The acquisition will enhance the Company’s current enterprise interoperability initiatives and broaden its accountable and collaborative care, population health, disease management and clinical data exchange offerings. The Mirth purchase price totaled $56,222, which includes share-based contingent consideration with an estimated fair value of $13,307 payable over a three year period subject to achievement of certain strategic milestones. The share-based contingent consideration was adjusted by a $5,239 fair value discount, which is being amortized over the three year achievement period. The goodwill arising from the acquisition of Mirth represents the opportunity for the Company to sell Mirth-powered health information technology solutions as a complement to its other products as well as other expected market participant synergies going forward and is expected to be deductible for income tax purposes over a period of 15 years. Mirth operates under the NextGen Division.

The Company accounted for the Mirth acquisition as a purchase business combination. The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The fair values of acquired assets and liabilities assumed represent management’s estimate of fair value. As additional information became available during the measurement period about facts and circumstances that existed as of the acquisition date, the Company recorded a $215 adjustment to goodwill during the third quarter of fiscal 2014 relating to a change in estimated working capital and a $712 adjustment to goodwill during the fourth quarter of fiscal 2014 relating a change in estimates to the fair value of certain current assets.

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 the Mirth acquisition during the year ended March 31, 2014 is summarized as follows:

	Mirth
Cash paid	$	35,033
Common stock issued at fair value	7,882
Contingent consideration	13,307
Total purchase price	$	56,222

The following table summarizes the final purchase price allocation for the Mirth acquisition:

	Mirth
Fair value of the net tangible assets acquired and liabilities assumed:
Current assets (including accounts receivable of $3,939)	$	4,231
Equipment and improvements	822
Accounts payable and accrued liabilities	(764		)
Deferred revenues	(5,802		)
Total net tangible assets acquired and liabilities assumed	(1,513		)
Fair value of identifiable intangible assets acquired:
Trade name	1,350
Customer relationships	2,800
Software technology	22,200
Goodwill	31,385
Total identifiable intangible assets acquired	57,735
Total purchase price	$	56,222

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