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Acquisitions
9 Months Ended
Sep. 30, 2016
Business Combinations [Abstract]  
Acquisitions

3. Acquisitions

 

Systemax

 

On December 1, 2015, we completed the acquisition of certain Business to Business (B2B) assets of Systemax’s North American Technology Group (NATG) for $14 million in cash. As of September 30, 2016, there has been no change from December 31, 2015 on the preliminary accounting for the Systemax asset acquisition and the related purchase price allocation. We continue to obtain information relative to the fair values of certain assets acquired and certain liabilities assumed in the transaction. We expect to finalize the final fair value determination and purchase price allocation for the Systemax asset acquisition as soon as practicable but within a year of the closing of the acquisition.

 

In January 2016, we exercised an option in our purchase agreement and paid $0.4 million related to our purchase of additional customer list information, which was recorded as an increase to goodwill associated with the Systemax assets acquisition.

 

Acrodex

 

On October 26, 2015, PCM Sales Canada, Inc., a wholly-owned subsidiary of PCM, Inc., completed the acquisition of all the outstanding common stock of Acrodex, Inc. (“Acrodex”) for a total purchase price of approximately C$16.7 million (or $13.6 million, net of cash acquired). In March 2016 and June 2016, we paid an additional $0.2 million and $0.1 million, respectively, related to adjustments to the net asset value as defined in the agreement, which was recorded as an increase to goodwill resulting from the Acrodex acquisition. As of September 30, 2016, we have finalized the final fair value determination and purchase price allocation for the Acrodex acquisition, and there has been no other change from December 31, 2015 on the preliminary accounting for the Acrodex acquisition and the related purchase price allocation.

 

En Pointe

 

As part of our acquisition of certain assets of En Pointe in April 2015, we agreed to pay certain contingent earn-out consideration, including 22.5% of the future adjusted gross profit of the business and 10% of certain service revenues over the three years following the closing of the acquisition. As of September 30, 2016 and December 31, 2015, we have estimated that the fair value of contingent consideration to be paid throughout the earn-out period ending March 31, 2018 to be approximately $38.6 million, reflecting no change to the fair value of this contingent consideration during the nine months ended September 30, 2016.

 

During the three and nine months ended September 30, 2016, we made $3.9 and $9.8 million, respectively, of earn-out payments to the sellers of En Pointe. As of September 30, 2016, we had $13.2 million and $6.6 million of accrued earn-out liability included in “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, on our Condensed Consolidated Balance Sheets. As of December 31, 2015, we had $13.2 million and $16.5 million of accrued earn-out liability included in “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, on our Condensed Consolidated Balance Sheets.

Following the completion of the acquisition on April 1, 2015, we fully integrated the operations of En Pointe into various areas of our business by the end of the second quarter of 2015 and it became impracticable to compute En Pointe’s operating profit included in our results of operations for periods thereafter.

 

The following table sets forth our results of operations on a pro forma basis as though the En Pointe acquisition had been completed as of the beginning of the period presented (in thousands, except per share amounts):

 

   

Nine Months Ended

September 30, 2015

 
Net sales   $ 1,297,790  
Operating loss     (2,450 )
Loss from continuing operations     (3,281 )
Net loss     (3,540 )
Basic and Diluted Loss Per Common Share        
Basic   $ (0.29 )
Diluted     (0.29 )
Weighted average number of common shares outstanding:        
Basic     12,101  
Diluted     12,101