3. Business Combinations

On April 29, 2011, the Company acquired IntraNexus, a provider of Web-based integrated clinical and hospital information systems. The IntraNexus purchase price totaled $4,204, including contingent consideration payable over a three year period with a fair value of $800, which was estimated based on management’s forecast of expected revenues, but in no event shall exceed $1,650.

On February 10, 2010, the Company acquired Opus, a provider of clinical information systems to the small hospital inpatient market. The Opus purchase price totaled $21,113, which includes a fair value adjustment of $532 to goodwill and the contingent consideration liability that was recorded during the year ended March 31, 2011. The fair value of the total Opus contingent consideration of $12,048 was estimated at the time of purchase based on the probability of Opus achieving certain earnout payments to be paid over a two year period to the selling security holders and former stock option holders (“option holders”) of Opus if certain operational and strategic objectives were met.

On March 30, 2011, the Company entered into an amendment to the merger agreement to modify and accelerate payment of the earnout consideration under the merger agreement, resulting in a total payment of $12,250, payable in 143,000 shares of Company common stock to the selling security holders and $856 in cash to the option holders. The Company has no further obligation to pay earnout consideration related to the Opus acquisition.

The fair value of the Opus earnout settlement was $12,743, which is the fair value of the Opus contingent consideration recorded in other current liabilities as of March 31, 2011. In reviewing the final settlement, the Company identified an error in the initial purchase price allocation related to the fair value of the price collar provisions in the merger agreement. As a result, the Company recorded an adjustment of $532 to goodwill and contingent consideration liability to correct the initial purchase price allocation as of February 10, 2010. The Company has concluded that this correction is not material to any periods affected.

The Company accounted for the IntraNexus, Opus, and NextGen IS acquisitions as purchase business combinations as defined in FASB ASC Topic 805, Business Combinations, or ASC 805. Under the acquisition method of accounting, 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 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 as well as the relief from royalty method approach.

The total purchase price for IntraNexus is summarized as follows:


Cash paid	$	3,279
Purchase price holdback		125
Contingent consideration		800


Total purchase price	$	4,204

The following table summarizes the final allocation of the IntraNexus purchase price:


Fair value of the net tangible assets acquired and liabilities assumed:
Current assets (including accounts receivable of $464)	$	691
Accounts payable and accrued liabilities		(226	)
Deferred revenues		(94	)


Total net tangible assets acquired and liabilities assumed		371

Fair value of identifiable intangible assets acquired:
Customer relationships		1,100
Software technology		830
Goodwill (including assembled workforce of $120)		1,903


Total identifiable intangible assets acquired		3,833


Total purchase price	$	4,204

The pro forma effects of the IntraNexus, Opus and NextGen IS acquisitions would not have been material to the Company’s results of operations and is therefore not presented.