Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

On October 16, 2012, the Company completed the sale of its subsidiary, Pedrena. Pedrena is the parent company of Interdata, which is in turn, the parent company of J3TEL. The sale was completed pursuant to a Share Purchase Agreement, dated as of August 1, 2012 (the "Interdata Purchase Agreement") with IJ Next, a French "société par actions simplifiée," as purchaser. The purchaser was a wholly-owned subsidiary of the French company Holding Baelen Gaillard ("HBG").

The purchase price was 14.6 million euros ($19.0 million) and was paid in cash at closing by HBG to the Company. Cash proceeds to the Company were subject to closing costs of approximately $0.8 million. In addition to the Interdata Purchase Agreement, the Company and purchaser entered into a Representations and Warranties Agreement on August 1, 2012 (the "Representation and Warranties Agreement") related to the transaction which included customary representations, warranties, covenants and indemnification obligations. The Interdata Purchase Agreement, Representations and Warranties Agreement and sale of Interdata were approved by the Company's stockholders at the Company's annual meeting of stockholders held on October 11, 2012.

The statements of operations for the year ended December 31, 2012 that would have been included if Pedrena had not been sold consisted of (in thousands):

Year ended December 31:	2012
Revenue	$	27,602
Income (loss) before income taxes	(3,175		)
Provision for income taxes	(244		)
Income (loss) from operations of discontinued operations	(2,931		)
Gain on sale of Interdata, net of income taxes of $623	5,542
Net income from discontinued operations, net of income taxes	$	2,611

In connection with the sale of Interdata, the Company entered into a channel partner agreement with the buyer whereby the Company will continue to sell its products to Interdata. The amount of intercompany revenues that were previously eliminated from the Company's financial statements in consolidation consisted of (in thousands):

Year ended December 31:	2012
Revenues attributed to intercompany activities	$	4,249

On October 12, 2012, the Company completed the sale of all of the shares of its wholly-owned subsidiary Alcadon pursuant to a Stock Purchase Agreement, dated as of September 11, 2012 (the "Alcadon Purchase Agreement") with Deltaco Aktiebolag, a public corporation organized under the laws of Sweden (“Deltaco”). The Alcadon Purchase Agreement and sale of Alcadon were approved by the Company's stockholders at the Company's annual meeting of stockholders held on October 11, 2012.

The purchase price paid at closing to the Company by Deltaco was $6.5 million plus estimated net cash as of September 30, 2012 of $1.2 million for an aggregate of $7.7 million. The cash proceeds received were subject to an escrow amount of $0.8 million and approximately $0.3 million in closing costs. The escrow fund was released on December 28, 2012, subject to a 'true-up' adjustment of $0.7 million. Prior to the closing, Alcadon paid a cash dividend to MRV in the amount of $3.7 million. Total net cash proceeds to the Company were $10.6 million inclusive of the $3.7 million dividend and net of the true-up and other closing costs.

The statements of operations for the year ended December 31, 2012 that would have been included if Alcadon had not been sold consisted of (in thousands):

Year ended December 31:	2012
Revenue	$	24,320
Loss before income taxes	(1,088		)
Provision for income taxes	643
Loss from operations of discontinued operations	(1,731		)
Gain on sale of Alcadon, net of income taxes of $1,341	6,182
Net income from discontinued operations, net of income taxes	$	4,451

In connection with the sale of Interdata the Company entered into a channel partner agreement with the buyer whereby the Company will continue to sell its products to Alcadon. The amount of intercompany revenues that were previously eliminated from the Company's financial statements in consolidation consisted of (in thousands):

Year ended December 31:	2012
Revenues attributed to intercompany activities	$	3,931

On March 29, 2012, the Company completed the sale of all of the issued and outstanding capital stock of its wholly-owned subsidiary CES. The sale was completed pursuant to a Stock Purchase Agreement (the "CES Purchase Agreement"), dated as of December 2, 2011, with CES Holding SA, as purchaser, represented for purpose of the Agreement by Vinci Capital Switzerland SA. The CES Purchase Agreement and sale of CES were approved by the Company's stockholders at the Company's annual meeting of stockholders held on January 9, 2012. The purchase price for CES paid on closing to the Company was CHF 25.8 million, or U.S. $28.4 million, with CHF 2.6 million, or U.S. $2.8 million of the proceeds going into an indemnification escrow account to be released in one year to the Company (subject to any indemnification claims that may be brought by the purchaser), which was released to the Company in March 2013. Cash proceeds to the Company were $24.2 million upon closing net of the escrowed funds and $1.2 million in other closing costs.

The historical financial results of CES prior to its sale have been reclassified as discontinued operations for all periods presented. The Company recorded net income of $5.8 million from discontinued operations, net of income tax expense, for the year ended December 31,2012. The net income from discontinued operations for the year ended December 31,2012 includes an $6.5 million gain partially offset by a $0.1 million operating loss and $0.4 million in withholding tax expense.

The statements of operations for the year ended December 31, 2012 that would have been included if CES had not been sold consisted of (in thousands):

Year ended December 31:	2012
Revenue	$	6,829
Income (loss) before income taxes	(135		)
Provision for income taxes	556
Income (loss) from operations of discontinued operations	(691		)
Gain on sale of CES, net of income taxes of $1,668	6,470
Net income from discontinued operations, net of income taxes	$	5,779