Acquisitions

EDI Business

On January 29, 2010, we closed our acquisition (the “Acquisition”) of shares of Nielsen EDI Limited, a private limited liability company incorporated and registered under the laws of England and Wales, and certain assets of The Nielsen Company (United States), LLC, a Delaware limited liability company (the “Seller”), in the United States, Australia, Germany, France, Mexico, Argentina and Spain relating exclusively to the portion of the Seller’s business that provides information management and business intelligence services by gathering and tracking theatrical gross receipt ticket sales and related information at movie theaters in certain countries for films at such facilities (the “EDI Business”).

This Acquisition provides us with a global platform, furthering our ability to deliver box office results from more than 80,000 movie screens in 24 countries throughout the world. Additionally, it provides us with a platform from which we can pursue new business opportunities.

The purchase price for the EDI Business consisted of $15.0 million cash plus working capital adjustments of $1.8 million cash and an additional liability of $0.1 million. We also entered into a Data License Agreement that provides the Seller continued access to certain box office sales information for certain of Seller’s existing products and services that currently use or feature such data and a Transition Services Agreement that provided certain services to us on a transitional basis.

The purchase consideration was allocated based on the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed. The excess of the purchase price over the estimated fair value of tangible and identifiable intangible assets acquired and liabilities assumed was allocated to goodwill.

In performing our purchase price allocation, we considered, among other factors, our intention for future use of acquired assets, analysis of historical financial performance and estimates of future performance of the EDI Business. The fair values of intangible assets were calculated primarily using an income approach with estimates and assumptions provided by management. The rates utilized to discount net cash flows to their present values were based on a range of discount rates of 10.5% to 29.0% and vary based on the amount paid for each of the intangible assets located in the foreign locations listed above. These discount rates were applied to the intangible assets to reflect the varying profitability levels in the foreign territories and our evaluation of the global strategic value of each territory rather than their cash flow generating abilities on a stand-alone basis.

The allocation of the purchase price was as follows (dollars in thousands):



				Useful Life
Cash and cash equivalents	$	300		—
Accounts and notes receivable	2,507			—
Other current assets	87			—
Property and equipment	154			3 years
Goodwill	3,395			Indefinite
Other intangible assets:
Global relationships	7,400			Indefinite
Local relationships – U.K., Germany and Spain	3,630			8 years
Local relationships – United States	340			10 years
EDI trade name	50			3 years
	11,420
	17,863

Accounts payable	(381		)	—
Deferred revenue	(225		)	—
Other long-term liabilities	(298		)	—
	(904		)
	$	16,959

The overall weighted average amortization period for the above intangible assets, other than goodwill and global relationships, as of the date of acquisition was 8.0 years. Goodwill of $3.4 million was recorded as a result of consideration paid in excess of the fair value of the net tangible and intangible assets acquired and liabilities assumed, which resulted from expected future strategic position and the workforce acquired. Goodwill and other indefinite-lived intangible assets are not amortized, but are evaluated annually for potential impairment based on current and future expected financial results of our Box Office Essentials™ line of business, which is part of our AMI Division. In the United States, goodwill is deductible for income tax purposes. In the foreign jurisdictions in which we operate, the deductibility of goodwill varies by jurisdiction, but we do not anticipate that this will materially impact our financial results.

For Fiscal 2012, 2011 and 2010, we included $13.4 million, $11.5 million and $1.8 million, respectively, in revenue and $1.7 million, $1.5 million and $0.6 million, respectively, in earnings related to the EDI Business since the acquisition date. We incurred $0.8 million and $1.7 million of acquisition and transition costs, which were included in selling and administrative expenses in Fiscal 2011 and 2010, respectively.

Unaudited pro forma results of operations as if the EDI Business had been acquired as of April 1, 2009, were as follows (in thousands, except per share amounts):



	Year Ended March 31,
	2010⁽¹⁾
Total revenue	$	101,261
Net income	2,002
Basic earnings per share	0.19
Diluted earnings per share	0.18


(1)	Includes Rentrak’s results for the fiscal year ended March 31, 2010, and the EDI Business’s results for the year ended December 31, 2009, as filed on Form 8-K/A on April 16, 2010. Rentrak’s results have been adjusted to exclude the revenue, earnings, transition and acquisition costs relating to the EDI Business subsequent to the acquisition date.

Pro forma historical results of operations are not necessarily indicative of actual future results of operations.

Ciné Chiffres

In the third quarter of Fiscal 2011, we acquired Ciné Chiffres, a provider of French box office data in Paris, France and its suburbs, for $1.7 million. Ciné Chiffres is reported as a component of Box Office Essentials™ in our AMI Division.

The purchase price was allocated as follows (dollars in thousands):



				Useful Life
Property and equipment	$	7		3 years
Goodwill	1,116			Indefinite
Other intangible assets:
Local relationships	761			7 years
Trade name	1			1 year
	1,885
Accrued payroll liabilities	(43		)	—
Deferred revenue	(116		)	—
	(159		)
	$	1,726

The overall weighted average amortization period for the above intangible assets, other than goodwill, as of the date of the acquisition was 6.95 years. Goodwill of $1.1 million was recorded as a result of consideration paid in excess of the fair value of the net tangible and intangible assets acquired and liabilities assumed. This acquisition expands our coverage of the French market, which is expected to improve our strategic position. Goodwill is not amortized, but is evaluated annually for potential impairment based on current and future financial and economic results of our Box Office Essentials™ line of business, which is part of our AMI Division.

For Fiscal 2012 and 2011, we included $0.2 million and $0.1 million, respectively, in revenue and $0.4 million and $0.6 million, respectively, in net losses related to Ciné Chiffres since the acquisition date. We incurred $0.6 million of acquisition and transition costs, which were included in selling and administrative expenses in Fiscal 2011. Pro forma results of operations are not provided because they are not material.

Media Salvation

On January 3, 2011, we acquired the outstanding stock of Media Salvation, Inc., for an initial cash payment of $250,000. The stock purchase agreement contains provisions relating to additional contingent cash payments in the amount of $750,000 and contingent stock distributions valued at $2.0 million, which may be paid based on achieving certain performance requirements. On January 31, 2012, we issued 33,417 shares of our common stock with an acquisition date fair value of $1.0 million and made a cash payment of $250,000 in satisfaction of the first year contingent payout provisions. Both amounts had been previously accrued and, accordingly, there was no net effect on our Consolidated Balance Sheets and no effect on our Consolidated Statements of Operations. Provisions for contingent payouts related to the second year of operations remain outstanding with potential for an additional $500,000 cash payment which is included in Accrued liabilities on the Consolidated Balance Sheet and 33,417 shares of our common stock to be issued which is included in Stockholder' Equity. The contingent amounts are expected to be paid out in the fourth quarter of Fiscal 2013.

Media Salvation provides sales and financial reporting systems and services to a major studio and independent film companies active in the electronic, mobile and physical distribution channels and is reported as a component of both AMI and HE Divisions.

The purchase price was allocated as follows (dollars in thousands):



				Useful Life
Cash	$	47		—
Accounts receivable	84			—
Goodwill	531			Indefinite
Other intangible assets:
Sony relationship	2,320			10 years
Existing technology	66			6 months
	3,048
Other accrued liabilities	(41		)	—
	(41		)
	$	3,007

The overall weighted average amortization period for the above intangible assets, other than goodwill, as of the date of the acquisition was 9.74 years. Goodwill of $0.5 million was recorded as a result of consideration paid in excess of the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized, but is evaluated annually for potential impairment based on current and future financial and economic results.

For Fiscal 2012 and 2011, we included $1.0 million and $0.3 million, respectively, in revenue related to Media Salvation and in Fiscal 2012 included $0.1 million in earnings. Earnings for Fiscal 2011 were not material. We incurred $0.1 million of acquisition and transition costs, which were included in selling and administrative expenses in Fiscal 2011. Pro forma results of operations are not provided because they are not material.