XML 23 R11.htm IDEA: XBRL DOCUMENT v3.22.2.2
Acquisitions
 9 Months Ended
Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
Acquisitions ACQUISITIONS
MENU Acquisition

During the three months ended September 30, 2022, ParTech, Inc. ("ParTech") acquired 100% of the stock of MENU Technologies AG ("MENU"), a restaurant technology company offering fully integrated omnichannel ordering solutions to restaurants worldwide (the "MENU Acquisition"), for purchase consideration of approximately $18.4 million paid in cash and $6.3 million paid in shares of Company common stock. 162,917 shares of common stock were issued as purchase consideration, determined using a fair value share price of $38.67. In addition, the sellers have the opportunity to earn additional cash and Company common stock consideration over an earn-out period ending July 31, 2024, primarily based on MENU's future SaaS annual recurring revenues.As of September 30, 2022, the Company determined the fair value of the MENU earn-out to be $14.2 million.

The transaction was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. Accordingly, assets acquired and liabilities assumed have been accounted for at their preliminarily determined respective fair values as of July 25, 2022, the date of acquisition. The preliminary fair value determinations were based on management's best estimates and assumptions, and with the assistance of independent valuation and tax consultants. Identified preliminary fair values are subject to measurement period adjustments within the permitted measurement period (up to one year from the acquisition date) as independent consultants finalize their procedures and net working capital adjustments are agreed upon and settled.

The following table presents management's preliminary purchase price allocation:

(in thousands)Purchase price allocation
Cash$843
Accounts receivable209
Property and equipment204
Developed technology10,700
Prepaid and other acquired assets221
Goodwill28,495
Total assets40,672
Accounts payable and accrued expenses1,300
Deferred revenue443 
Earn-out liability14,200 
Consideration paid$24,729 

The Company determined the acquisition date fair value of contingent consideration associated with the MENU earn-out using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurement; refer to "Note 13: Fair Value of Financial Instruments".

The estimated fair value of acquired developed technology was determined based on an income approach which estimated the fair value based upon the present value of cash flows the asset is expected to generate. The acquired developed technology asset is being amortized on a straight-line basis over its estimated useful life of seven years,

Consideration paid in cash on the date of acquisition included $3.0 million deposited into an escrow account administered by a third party, to be held for up to 18-months following the date of acquisition, to fund potential post-closing adjustments and obligations.

The Company incurred expenses related to its acquisition of MENU of approximately $1.1 million.

The Company has not presented combined pro forma financial information of the Company and MENU because the results of operations of the acquired business are considered immaterial.
Q1 2022 Acquisition

During the three months ended March 31, 2022, ParTech acquired substantially all the assets and liabilities of a privately held restaurant technology company (the "Q1 2022 Acquisition"). The transaction was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations, resulting in an increase to goodwill of $1.2 million. The Company determined that the preliminary fair values of all other assets acquired and liabilities assumed relating to the transaction did not materially affect the Company's financial condition; this determination included the preliminary valuations of identified intangible assets. The preliminary fair value determinations were based on management's best estimates and assumptions, and through the use of independent valuation and tax consultants. Identified preliminary fair values are subject to measurement period adjustments within the permitted measurement period (up to one year from the acquisition date) as independent consultants finalize their procedures. The Company considers the results of operations of the acquired business to be immaterial and therefore has not presented combined pro forma financial information.

Punchh Acquisition

On April 8, 2021, the Company, ParTech, and Sliver Merger Sub, Inc., a wholly owned subsidiary of ParTech (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Punchh Inc. (“Punchh”), and Fortis Advisors LLC, solely in its capacity as the initial Stockholder Representative. Pursuant to the Merger Agreement, on April 8, 2021, Merger Sub merged with and into Punchh (the “Merger”), with Punchh surviving the Merger and becoming a wholly owned subsidiary of the Company (“Punchh Acquisition”).


Allocation of Acquisition Consideration — Punchh Acquisition

The Punchh Acquisition was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. Accordingly, assets acquired and liabilities assumed in the Punchh Acquisition were accounted for at their final determined respective fair values as of April 8, 2021. The final fair value determinations were based on management's best estimates and assumptions, and through the use of independent valuation and tax consultants.

During the first quarter of 2022, the fair values of assets and liabilities as of April 8, 2021 were finalized to reflect final acquisition valuation analysis procedures.

The following table presents management's final purchase price allocation for the Punchh Acquisition:
(in thousands)Purchase price allocation
Cash$22,714 
Accounts receivable10,214 
Property and equipment592 
Lease right-of-use assets2,473 
Developed technology84,600 
Customer relationships7,500 
Indemnification assets2,109 
Trade name5,800 
Prepaid and other acquired assets2,764 
Goodwill415,055 
Total assets553,821 
Accounts payable and accrued expenses15,617 
Deferred revenue10,298 
Loan payables3,508 
Lease liabilities2,787 
Indemnification liabilities2,109 
Deferred taxes11,794 
Consideration paid$507,708 
Unaudited Pro Forma Financial Information

For the nine months ended September 30, 2021, the Punchh Acquisition resulted in additional revenues of $17.8 million.
The following table summarizes the Company's unaudited pro forma operating results:

Nine Months Ended September 30,
(in thousands)2021
Total revenue$209,997 
Net loss$(53,440)

The unaudited pro forma results presented above are for illustrative purposes only and do not reflect the realization of actual cost savings or any related integration costs. The unaudited pro forma results do not purport to be indicative of the results that would have been obtained, or to be a projection of results that may be obtained in the future. $3.5 million of acquisition costs have been reflected in the 2021 unaudited pro forma results.