3. Business Combinations

Entrada Acquisition

On April 14, 2017, we completed our acquisition of Entrada, Inc. ("Entrada") pursuant to the terms of the Agreement and Plan of Merger, dated April 11, 2017 (the "Agreement"). Based in Nashville, TN, Entrada is a leading provider of cloud-based solutions that are reshaping the way care is delivered by leveraging the power of mobile whenever and wherever care happens. Entrada’s best-in-class mobile application integrates with multiple clinical platforms and all major electronic health record systems. Entrada enables organizations to maximize their existing technology investments while simultaneously enhancing physician and staff productivity. The acquisition of Entrada and its cloud-based, mobile application is part of our commitment to deliver systematic solutions that meet its clients' transforming work requirements to become increasingly nimble and mobile.

The preliminary purchase price totaled $33,958, which included preliminary working capital and other customary adjustments. The acquisition was primarily funded by a draw against our revolving credit agreement (see Note 7).

We accounted for the Entrada acquisition as a purchase business combination using the acquisition method of accounting. The preliminary purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. The preliminary fair values of acquired assets and liabilities assumed represent management’s estimate of fair value and are subject to change if additional information, such as changes to deferred taxes and/or working capital, becomes available. We expect to finalize the purchase price allocation as soon as practicable within the measurement period, but not later than one year following the acquisition date.

The preliminary 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.

In connection with the Entrada acquisition, we recorded $15,400 of intangible assets related to customer relationships, trade names and software technology. We are amortizing the Entrada customer relationships over 10 years and trade names and software technology over 5 years. The weighted average amortization period for the total amount of intangible assets acquired is 6.1 years.

The preliminary amount of goodwill represents the excess of the preliminary purchase price over the preliminary net identifiable assets acquired and liabilities assumed. Goodwill primarily represents, among other factors, the value of synergies expected to be realized and the assemblage of all assets that enable us to create new client relationships, neither of which qualify as separate amortizable intangible assets. Goodwill arising from the acquisition of Entrada is not deductible for tax purposes and is allocated to our single reportable segment.

The total preliminary purchase price for the Entrada acquisition is summarized as follows:

Initial purchase price	$	34,000
Preliminary working capital and other adjustments		(42	)
Total preliminary purchase price	$	33,958

	April 14, 2017
Preliminary fair value of the net tangible assets acquired and liabilities assumed:
Acquired cash and cash equivalents	$	102
Accounts receivable, net		1,835
Prepaid expense and other current assets		145
Equipment and improvements, net		134
Capitalized software costs, net		364
Deferred income taxes, net		1,041
Accounts payable		(639	)
Accrued compensation and related benefits		(120	)
Deferred revenues		(234	)
Other liabilities		(444	)
Total preliminary net tangible assets acquired and liabilities assumed		2,184
Preliminary fair value of identifiable intangible assets acquired:
Goodwill		16,374
Software technology		10,500
Customer relationships		3,300
Trade name		1,600
Total preliminary identifiable intangible assets acquired		31,774
Total preliminary purchase price	$	33,958

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

EagleDream Health Acquisition

On August 16, 2017, we completed the acquisition of EagleDream Health, Inc. ("EagleDream") pursuant to the Agreement and Plan of Merger (the “Merger Agreement"), dated July 31, 2017. Headquartered in Rochester, NY, EagleDream is a cloud-based analytics company that drives meaningful insight across clinical, financial and administrative data to optimize practice performance.

The preliminary purchase price totaled $25,609, which included preliminary working capital and other customary adjustments. The acquisition was partially funded by a draw against our revolving credit agreement (see Note 7).

We accounted for the EagleDream acquisition as a purchase business combination using the acquisition method of accounting. The preliminary purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. The preliminary fair values of acquired assets and liabilities assumed represent management’s estimate of fair value and are subject to change if additional information, such as changes to deferred taxes and/or working capital, becomes available. We expect to finalize the purchase price allocation as soon as practicable within the measurement period, but not later than one year following the acquisition date.

In connection with the EagleDream acquisition, we recorded $13,400 of intangible assets related to customer relationships and software technology. We are amortizing the EagleDream customer relationships over 8 years and software technology over 5 years. The weighted average amortization period for the total amount of intangible assets acquired is 5.1 years.

The preliminary amount of goodwill represents the excess of the preliminary purchase price over the preliminary net identifiable assets acquired and liabilities assumed. Goodwill primarily represents, among other factors, the value of synergies expected to be realized and the assemblage of all assets that enable us to create new client relationships, neither of which qualify as separate amortizable intangible assets. Goodwill arising from the acquisition of EagleDream is not deductible for tax purposes and is allocated to our single reportable segment.

The total preliminary purchase price for the EagleDream acquisition is summarized as follows:

Initial purchase price	$	26,000
Preliminary working capital and other adjustments		(391	)
Total preliminary purchase price	$	25,609

	August 16, 2017
Preliminary fair value of the net tangible assets acquired and liabilities assumed:
Acquired cash and cash equivalents	$	573
Accounts receivable, net		217
Prepaid expense and other current assets		20
Accounts payable		(115	)
Accrued compensation and related benefits		(271	)
Deferred revenues		(394	)
Deferred income taxes, net		(1,957	)
Other liabilities		(122	)
Total preliminary net tangible assets acquired and liabilities assumed		(2,049	)
Preliminary fair value of identifiable intangible assets acquired:
Goodwill		14,258
Software technology		12,800
Customer relationships		600
Total preliminary identifiable intangible assets acquired		27,658
Total preliminary purchase price	$	25,609

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