XML 19 R9.htm IDEA: XBRL DOCUMENT
v3.19.2

Acquisitions | 6 Months Ended
--- | ---
Jun. 30, 2019
Business Combinations [Abstract] |
Acquisitions | Acquisitions On February 28, 2019, we acquired all of the capital stock of MP Holdings Parent, Inc. dba MicroPact ("MicroPact"), a leading provider of commercial off-the-shelf (COTS) solutions, including entellitrak®, a low-code application development platform for case management and business process management used extensively in the public sector. The total purchase price, net of cash acquired of $2.0 million, was approximately $204.2 million consisting of $197.5 million paid in cash, accrued contingent consideration of $7.0 million contingent upon the achievement of certain financial performance objectives, and $1.7 million accrued for certain holdbacks, subject to certain post-closing adjustments. We have performed a preliminary valuation analysis of the fair market value of MicroPact’s assets and liabilities. The following table summarizes the preliminary allocation of the purchase price as of the acquisition date:
(In thousands) |  |
Cash |  | $ | 1,983 |
Accounts receivable |  | 11,852 |
Other current assets |  | 8,979 |
Other noncurrent assets |  | 10,417 |
Identifiable intangible assets |  | 118,843 |
Goodwill |  | 83,065 |
Accounts payable |  | (602 | )
Accrued expenses |  | (2,432 | )
Other noncurrent liabilities |  | (8,879 | )
Deferred revenue |  | (11,312 | )
Deferred tax liabilities, net |  | (5,766 | )
Total consideration |  | $ | 206,148 |
In connection with this transaction, we acquired total tangible assets of $33.2 million and assumed liabilities of approximately $23.2 million. We recorded goodwill of $83.1 million, none of which is expected to be deductible for tax purposes, and other identifiable intangible assets of approximately $118.8 million. The $118.8 million of intangible assets are attributable to customer relationships, acquired software, trade name and favorable fair value of an operating lease and will be amortized over a weighted average period of approximately 10 years. We recorded deferred tax liabilities of $5.8 million related to estimated fair value allocations. The acquisition of MicroPact augments our product solutions, positions us in new practice areas such as health and human services, and presents opportunities to expand our business across new and complementary markets. We intend to expand our total addressable market through MicroPact's strong presence in the federal market. Therefore, the goodwill of $83.1 million arising from this acquisition is primarily attributed to our ability to generate increased revenues, earnings and cash flow by expanding our addressable market and client base. In the six months ended June 30, 2019, we recorded adjustments to the preliminary opening balance sheet attributed to an increase in deferred revenue and related deferred taxes resulting in a net increase to goodwill of approximately $1.0 million. The following unaudited pro forma consolidated operating results information has been prepared as if the MicroPact acquisition had occurred at January 1, 2018, after giving effect to certain adjustments, including amortization of intangibles, interest, transaction costs and tax effects.
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Revenues |  | $ | 275,124 |  |  | $ | 254,471 |  |  | $ | 533,988 |  |  | $ | 493,004 |
Net income |  | 31,999 |  |  | 39,720 |  |  | 59,166 |  |  | 76,792 |
Basic earnings per share |  | 0.83 |  |  | 1.03 |  |  | 1.54 |  |  | 2.00 |
Diluted earnings per share |  | $ | 0.80 |  |  | $ | 0.99 |  |  | $ | 1.49 |  |  | $ | 1.91 |
The pro forma information above does not include acquisitions that are not considered material to our results of operations. The pro forma information does not purport to represent what our results of operations actually would have been had such transaction occurred on the date specified or to project our results of operations for any future period. On February 1, 2019, we acquired all the assets of Civic, LLC ("MyCivic"), a company that provides software solutions to connect communities. The total purchase price was $3.7 million in cash. As of June 30, 2019, the purchase price allocations for MicroPact and MyCivic are not yet complete. The preliminary estimates of fair value assumed at the acquisition date for intangible assets, deferred revenue, accrued contingent consideration, accrued holdbacks and related deferred taxes are subject to change as valuations are finalized. The operating results of MicroPact and MyCivic are included in the operating results of the Enterprise Software segment since their respective dates of acquisition. Revenues from MicroPact included in Tyler's results of operations were approximately $14.6 million and $20.1 million for the three and six months ended June 30, 2019, respectively, and net loss was $3.2 million and $3.6 million for the three and six months ended June 30, 2019, respectively. Revenues and operating results from MyCivic included in 2019 results were not significant. As of June 30, 2019, we incurred fees of approximately $0.9 million for financial advisory, legal, accounting, due diligence, valuation and other various services necessary to complete these acquisitions. These fees were expensed in 2019 and are included in Selling, general and administrative expenses on the condensed consolidated statement of income. Our balance sheet as of June 30, 2019, reflects the allocation of the purchase price to the assets acquired based on their fair value at the date of each acquisition. The fair value of the assets and liabilities acquired are based on valuations using Level III, unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration