Business Combinations

12 Months Ended

Mar. 31, 2012

Business Combinations [Abstract]

Business Combinations

5.    Business Combinations

On November 14, 2011, the Company acquired ViaTrack, a developer and provider of information technologies that enhance EDI offerings. The ViaTrack purchase price totaled $10,923. The purchase price included contingent consideration payable over a one year period with a fair value of $2,958, which was estimated based on management’s forecast of expected revenues, but in no event shall this form of consideration exceed $4,000.

On July 26, 2011, the Company acquired CQI, a provider of hospital systems for surgery management. The CQI purchase price totaled $8,546. The purchase price included contingent consideration payable over a two year period with a fair value of $2,346, which was estimated based on management’s forecast of expected revenues, but in no event shall this form of consideration exceed $3,000. Subsequently at March 31, 2012, the Company recorded a $2.3 million deferred tax liability related to the acquired intangibles, which should have been recorded in the initial purchase price allocation. The offset to this adjustment was goodwill. The Company has concluded this correction to the balance sheet is not material to any periods affected.

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. The purchase price included 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 this form of consideration exceed $1,650.

On March 30, 2011, the Company entered into an amendment to the Opus merger agreement to terminate the terms of the earnout under the original merger agreement early for $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 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 ViaTrack, CQI and IntraNexus 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 IntraNexus, CQI, and ViaTrack are summarized as follows:

	IntraNexus		CQI		ViaTrack
Cash paid	$	3,279	$	2,737	$	5,710
Purchase price holdback		125		600		1,187
Common stock issued at fair value		—		2,863		1,068
Contingent consideration		800		2,346		2,958
Total purchase price	$	4,204	$	8,546	$	10,923

The following table summarizes the final purchase price allocation for IntraNexus, CQI, and ViaTrack:

	IntraNexus			CQI			ViaTrack
Fair value of the net tangible assets acquired and liabilities assumed:
Cash and cash equivalents	$	—		$	222		$	10
Current assets (including accounts receivable of $464, $409 and $436 for IntraNexus, CQI and ViaTrack, respectively)		691			410			462
Equipment and improvements and other long-term assets		—			221			47
Accounts payable and accrued liabilities		(226	)		(19	)		(125	)
Deferred revenues		(94	)		(520	)		—
Deferred tax liabilities		—			(2,331	)		—
Total net tangible assets acquired and liabilities assumed		371			(2,017	)		394
Fair value of identifiable intangible assets acquired:
Trade Name		—			—			130
Customer relationships		1,100			600			1,800
Software technology		830			5,100			1,310
Goodwill (including assembled workforce of $120 for IntraNexus)(1)		1,903			4,863			7,289
Total identifiable intangible assets acquired		3,833			10,563			10,529
Total purchase price	$	4,204		$	8,546		$	10,923

(1) Goodwill represents excess of the purchase price over total assets acquired and liabilities assumed.

The pro forma effects of the IntraNexus, CQI and ViaTrack acquisitions would not have been material to the Company’s results of operations and are therefore not presented.