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BUSINESS AND INTANGIBLE ASSET ACQUISITIONS AND JOINT VENTURES | 9 Months Ended
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Feb. 29, 2016
Business Combinations [Abstract] |
BUSINESS AND INTANGIBLE ASSET ACQUISITIONS AND JOINT VENTURES | BUSINESS AND INTANGIBLE ASSET ACQUISITIONS AND JOINT VENTURES Fiscal 2016 Heartland On December 15, 2015, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Heartland, pursuant to which we will acquire Heartland in a cash-and-stock transaction. In accordance with the terms and subject to the conditions set forth in the Merger Agreement, as a result of the transaction, each outstanding share of Heartland common stock will be converted into the right to receive $53.28 in cash and 0.6687 shares of our common stock, which at March 22, 2016 represented purchase consideration of $3.6 billion, or $93.15 per share of Heartland common stock. We expect the merger to close in our fiscal 2016 fourth quarter, subject to customary closing conditions, as well as approval by Heartland’s stockholders. As contemplated by the debt commitment letter that we entered into concurrently with the signing of the Merger Agreement, on February 26, 2016, we entered into an amendment to our existing credit facilities to provide for secured financing of up to $4.78 billion, the incremental proceeds of which will be used, among other things, to repay certain portions of Heartland’s existing indebtedness and to finance, in part, the cash consideration and the acquisition-related costs. See "Note 6—Long-Term Debt and Credit Facilities" for further discussion of our credit facility agreements. FIS Gaming Business On September 30, 2014, we entered into an asset purchase agreement with Certegy Check Services, Inc., a wholly owned subsidiary of Fidelity National Information Services, Inc. ("FIS"), to acquire substantially all of the assets of its gaming business related to licensed gaming operators (the "FIS Gaming Business"), which consisted primarily of customer contracts. On June 1, 2015, we completed the acquisition, which included approximately 260 gaming client locations, for $237.5 million funded from borrowings on our revolving credit facility and cash on hand. We acquired the FIS Gaming Business to expand our direct distribution and service offerings in the gaming industry. This transaction was accounted for as a business combination. We recorded the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. Due to the timing of this transaction, we have not finalized the valuation of the intangible assets acquired; however, certain adjustments to estimated fair value were recorded during the nine months ended February 29, 2016 based on new information obtained that existed as of the acquisition date. The adjustments associated with the revised valuation are detailed in the table below. Measurement-period adjustments, which are reflected in the table below, had no material effect on earnings or other comprehensive income for the current or prior periods. Acquisition-related costs associated with this business combination were not material. The revenue and earnings associated with the acquired business for the year ending May 31, 2016 are not expected to be material nor were the historical revenue and earnings of the acquired business material for the purpose of presenting pro forma information for the current or prior-year periods. The provisional estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed as originally determined and as revised for measurement period adjustments, including a reconciliation to the total purchase consideration, are as follows (in thousands):
| As Previously Determined |  | Measurement Period Adjustments |  | Revised
Customer-related intangible assets | $ | 135,200 |  |  | $ | 8,200 |  |  | $ | 143,400 |
Liabilities | (150 | ) |  | — |  |  | (150 | )
Total identifiable net assets | 135,050 |  |  | 8,200 |  |  | 143,250 |
Goodwill | 102,450 |  |  | (8,200 | ) |  | 94,250 |
Total purchase consideration | $ | 237,500 |  |  | $ | — |  |  | $ | 237,500 |
Goodwill arising from the acquisition was included in the North America segment and was attributable to expected growth opportunities, including cross-selling opportunities at existing and acquired gaming client locations, operating synergies in the gaming business and assembled workforce. Goodwill associated with this acquisition is deductible for income tax purposes. The customer-related intangible assets have an estimated amortization period of 15 years. We also entered into a gaming bureau license agreement and an outsourcing agreement with FIS on September 30, 2014. Under the license agreement, we acquired a perpetual software license for a gaming bureau application that we believe enhances our casino clients’ credit decision process. The software license was recorded in property and equipment in our consolidated balance sheet when acquired. Under the outsourcing agreement, which has a term of 10 years, we engaged FIS to provide a variety of services for our gaming clients, including: check and ACH verification services, collection services, claims management services, billing services and other gaming bureau services. The outsourcing agreement became effective on June 1, 2015. Fiscal 2015 Realex Payments On March 25, 2015, we acquired approximately 95% of the outstanding shares of Pay and Shop Limited for €110.2 million in cash ($118.9 million equivalent as of March 25, 2015) funded from borrowings on our revolving credit facility. Pay and Shop Limited, which does business as Realex Payments ("Realex"), is a leading European online payment gateway technology provider based in Dublin, Ireland. This transaction furthers our strategy to provide omnichannel solutions that combine gateway services, payment service provisioning and merchant acquiring across Europe. This transaction was accounted for as a business combination. We recorded the assets acquired, liabilities assumed and noncontrolling interest at their estimated fair values as of the acquisition date. The estimated acquisition date fair values of the assets acquired, liabilities assumed and the noncontrolling interest, including a reconciliation to the total purchase consideration, are as follows (in thousands):
Cash | $ | 4,082 |
Customer-related intangible assets | 16,079 |
Acquired technology | 39,820 |
Trade name | 3,453 |
Other intangible assets | 399 |
Other assets | 6,213 |
Liabilities | (3,479 | )
Deferred income tax liabilities | (7,216 | )
Total identifiable net assets | 59,351 |
Goodwill | 66,809 |
Noncontrolling interest | (7,280 | )
Total purchase consideration | $ | 118,880 |
Goodwill arising from the acquisition was included in the Europe segment and was attributable to expected growth opportunities in Europe, potential synergies from combining our existing business with gateway services and payment service provisioning in certain markets and an assembled workforce to support the newly acquired technology. Goodwill associated with this acquisition is not deductible for income tax purposes. The customer-related intangible assets have an estimated amortization period of 16 years. The acquired technology has an estimated amortization period of 10 years. The trade name has an estimated amortization period of 7 years. On October 5, 2015, we paid €6.7 million ($7.5 million equivalent as of October 5, 2015) to acquire the remaining shares of Realex after which we own 100% of the outstanding shares. Ezidebit On October 10, 2014, we completed the acquisition of 100% of the outstanding stock of Ezi Holdings Pty Ltd ("Ezidebit") for AUD 302.6 million ($266.0 million equivalent as of the acquisition date). This acquisition was funded by a combination of cash on hand and borrowings on our revolving credit facility. Ezidebit is a leading integrated payments company focused on recurring payments verticals in Australia and New Zealand. Ezidebit markets its services through a network of integrated software vendors and direct channels to numerous vertical markets. We acquired Ezidebit to establish a direct distribution channel in Australia and New Zealand and to further enhance our existing integrated solutions offerings. This transaction was accounted for as a business combination. We recorded the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date. Certain adjustments to estimated fair value were recorded during the nine months ended February 29, 2016 based on new information obtained that existed as of the acquisition date. During the measurement period, management determined that deferred income taxes should be reflected for certain nondeductible intangible assets. Measurement-period adjustments, which are reflected in the table below, had no material effect on earnings or other comprehensive income for the current or prior periods. The estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed as originally determined and as revised for measurement period adjustments, including a reconciliation to the total purchase consideration, are as follows (in thousands):
| As Previously Determined |  | Measurement Period Adjustments |  | Revised
Cash | $ | 45,826 |  |  | $ | — |  |  | $ | 45,826 |
Customer-related intangible assets | 42,721 |  |  | — |  |  | 42,721 |
Acquired technology | 27,954 |  |  | — |  |  | 27,954 |
Trade name | 2,901 |  |  | — |  |  | 2,901 |
Other assets | 2,337 |  |  | — |  |  | 2,337 |
Deferred income tax assets (liabilities) | 1,815 |  |  | (11,603 | ) |  | (9,788 | )
Other liabilities | (49,797 | ) |  | — |  |  | (49,797 | )
Total identifiable net assets | 73,757 |  |  | (11,603 | ) |  | 62,154 |
Goodwill | 192,225 |  |  | 11,603 |  |  | 203,828 |
Total purchase consideration | $ | 265,982 |  |  | $ | — |  |  | $ | 265,982 |
Goodwill arising from the acquisition was included in the Asia-Pacific segment and was attributable to expected future growth opportunities in Australia and New Zealand, growth and expansion of integrated payments in the Asia-Pacific region, economies of scale in our existing Asia-Pacific business and an assembled workforce. Neither the goodwill nor the customer-related intangible assets associated with this acquisition is deductible for income tax purposes. The customer-related intangible assets have an estimated amortization period of 15 years. The acquired technology has an estimated amortization period of 15 years. The trade name has an estimated amortization period of 5 years.

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