Business Combinations and Divestiture

Business Combinations

Borderfree

In June 2015, we acquired 100% of the outstanding shares of Borderfree. Borderfree provides cross-border ecommerce solutions through a proprietary technology and services platform that enables retailers to transact with consumers around the world. Borderfree is reported within our Global Ecommerce segment (see Note 2). The purchase price was $381 million, net of $92 million of cash acquired. In addition, we also paid $10 million for the accelerated vesting and settlement of Borderfree stock-based compensation awards and $8 million of transaction costs. The expense related to Borderfree stock-based compensation awards was recognized as selling, general and administrative expenses and the transaction costs were recognized within other (income) expense, net in the Consolidated Statements of Income.

The allocation of the purchase price to the fair values of assets acquired and liabilities assumed was as follows:



Accounts receivable	$	13,860
Fixed assets	7,329
Goodwill	300,020
Intangible assets	137,500
Accounts payable and other current liabilities	(35,785		)
Deferred taxes, net	(40,798		)
Other assets and liabilities, net	(677		)
	$	381,449

Goodwill represents the excess of the purchase price over the fair values of assets acquired and liabilities assumed. Goodwill is primarily attributable to expected growth opportunities, synergies and other benefits that we believe will result from combining the operations of Borderfree with our operations. Goodwill is not deductible for tax purposes.

Intangible assets acquired consisted of the following:



	Value		Amortization period
Customer relationships	$	116,200	10 years
Developed technology	12,600		5 years
Trade names	8,700		5 years
	$	137,500

The results of operations of Borderfree are included in our consolidated results from the date of acquisition. Our consolidated operating results for the year ended December 31, 2015 includes revenue of $63 million from Borderfree operations. On a supplemental pro forma basis, had we acquired Borderfree on January 1, 2014, revenue would have been $47 million and $125 million higher for the years ended December 31, 2015 and 2014, respectively. The impact on earnings would not have been material.

Other Acquisitions

In October 2015, we acquired the net assets of Zip Mail Services, Inc. (Zip Mail) for $6 million in cash plus additional payments totaling $1 million during the period 2016-2017. Zip Mail acts as an intermediary between customers and the U.S. Postal Service. Zip Mail offers mailing services that include presorting of first class, standard class and flat mail. Zip Mail is reported within our Presort Services segment.

In May 2015, we acquired Real Time Content, Inc. (RTC) for $6 million, net of cash acquired. RTC provides technology that enables clients to provide personalized interactive video communications to their customers. RTC is reported within our Software Solutions segment.

In January 2016, we acquired Enroute Systems Corporation (Enroute) for $14 million in cash plus potential additional payments during the periods 2017-2019 based on the achievement of revenue targets during the periods 2016-2018. Enroute is a cloud-based, software-as-a-service enterprise retail and fulfillment solutions company. Enroute will be reported within our Global Ecommerce segment.

Divestiture

In May 2015, we sold Imagitas for net proceeds of $292 million. We recognized a pre-tax gain of $111 million, which was reported within other (income) expense, net in the Consolidated Statements of Income.