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Acquisitions and Dispositions
6 Months Ended
Jun. 30, 2017
Business Combinations [Abstract]  
Acquisitions and Dispositions
Acquisitions and Dispositions
Acquisitions
On January 17, 2017, the Company completed its acquisition of Online Banking Solutions, Inc. (“OBS”), gaining additional cash management and digital business banking capabilities that complement and enrich the Company’s existing solutions, for a purchase price of $78 million, net of cash acquired, along with earn-out provisions estimated at a fair value of $15 million. OBS products are integrated across a number of the Company’s account processing solutions and with other core processing platforms, and should enable its bank and credit union clients to better serve their commercial customers.
During the second quarter of 2017, the Company finalized the purchase price allocation for this acquisition based upon a final valuation of intangible assets. The final purchase price allocation did not materially change from the preliminary allocation and resulted in technology and customer intangible assets totaling $30 million, goodwill of $62 million and other identifiable net assets of $1 million consisting primarily of accounts receivable. The goodwill, recognized within the Financial Institution Services (“Financial”) segment, from this transaction is deductible for tax purposes and is primarily attributed to synergies and anticipated revenue and earnings growth associated with the products and services that this business provides. The results of operations for OBS have been included in the accompanying consolidated statements of income from the acquisition date. Pro forma information is not provided because the acquisition did not have a material effect on the Company’s consolidated results of operations.
In June 2017, the Company made a recommended cash offer to acquire Monitise plc (“Monitise”) for approximately £70 million ($89 million). The transaction is subject to certain conditions including Monitise shareholder approval. In connection with this pending acquisition, the Company entered into a forward currency contract to hedge its net exposure to the British pound. As of June 30, 2017, the notional amount of this forward currency contract approximated $69 million, with a fair value of approximately $1 million recorded to earnings in the consolidated statements of income and prepaid expenses and other current assets in the consolidated balance sheet.
Disposition
On May 11, 2017, the Company sold its Australian item processing business, which was reported within the Financial segment, for approximately $17 million, consisting of $19 million in cash received at closing less an estimated closing adjustment of $2 million anticipated to be finalized in the third quarter of 2017. The Company recognized a gain on the sale of $10 million, with the related tax expense of $5 million recorded through the income tax provision, in the consolidated statements of income for the three and six months ended June 30, 2017.