XML 25 R10.htm IDEA: XBRL DOCUMENT
v3.8.0.1

ACQUISITIONS | 3 Months Ended
--- | ---
Mar. 31, 2018
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS ACTIVE Network We acquired the communities and sports divisions of Athlaction Topco, LLC ("ACTIVE Network") on September 1, 2017, for total purchase consideration of $1.2 billion. ACTIVE Network delivers cloud-based enterprise software, including payment technology solutions, to event organizers in the communities and health and fitness markets. This acquisition aligns with our technology-enabled, software driven strategy and adds an enterprise software business operating in two additional vertical markets that we believe offer attractive growth fundamentals. The following table summarizes the cash and non-cash components of the consideration transferred on September 1, 2017 (in thousands):
Cash consideration paid to ACTIVE Network stockholders | $ | 599,497 |
Fair value of Global Payments common stock issued to ACTIVE Network stockholders | 572,079 |
| $ | 1,171,576 |
We funded the cash consideration primarily by drawing on our Revolving Credit Facility (described in "Note 6—Long-Term Debt and Lines of Credit"). The acquisition-date fair value of 6,357,509 shares of our common stock issued to the sellers was determined based on the share price of our common stock as of the acquisition date and the effect of certain transfer restrictions. This transaction was accounted for as a business combination, which requires that we record the assets acquired and liabilities assumed at fair value as of the acquisition date. The accounting for this acquisition was not complete as of March 31, 2018. The fair values of the assets acquired and the liabilities assumed have been determined provisionally and are subject to adjustment as we obtain additional information. In particular, additional time is needed to refine and review the results of the valuation of assets and liabilities and to evaluate the basis differences for assets and liabilities for financial reporting and tax purposes. The provisional estimated acquisition-date fair values of major classes of assets acquired and liabilities assumed, including a reconciliation to the total purchase consideration, are as follows (in thousands):
| December 31, 2017 |  | Measurement- Period Adjustments |  | March 31, 2018
| (in thousands)
Cash and cash equivalents | $ | 42,913 |  |  | $ | — |  |  | $ | 42,913 |
Property and equipment | 21,985 |  |  | (133 | ) |  | 21,852 |
Identified intangible assets | 410,545 |  |  | — |  |  | 410,545 |
Other assets | 87,240 |  |  | (142 | ) |  | 87,098 |
Deferred income taxes | (31,643 | ) |  | — |  |  | (31,643 | )
Other liabilities | (144,132 | ) |  | (387 | ) |  | (144,519 | )
Total identifiable net assets | 386,908 |  |  | (662 | ) |  | 386,246 |
Goodwill | 784,668 |  |  | 662 |  |  | 785,330 |
Total purchase consideration | $ | 1,171,576 |  |  | $ | — |  |  | $ | 1,171,576 |
The measurement-period adjustments were the result of continued refinement of certain estimates regarding the valuation of property and equipment, other assets and other liabilities. As of March 31, 2018, we still considered these balances to be provisional because we were still in the process of gathering and reviewing information to support the valuation of identified intangible assets, certain tax positions and deferred income taxes. Goodwill of $785.3 million arising from the acquisition, included in the North America operating segment, was attributable to expected growth opportunities, potential synergies from combining our existing businesses and an assembled workforce. We expect that approximately 80% of the goodwill will be deductible for income tax purposes. The following reflects the provisional estimated fair values of the identified intangible assets and the respective weighted-average estimated amortization periods:
| Estimated Fair Values |  | Weighted-Average Estimated Amortization Periods
| (in thousands) |  | (years)
Customer-related intangible assets | $ | 189,000 |  |  | 17
Acquired technology | 153,300 |  |  | 9
Trademarks and trade names | 59,400 |  |  | 15
Covenants-not-to-compete | 8,845 |  |  | 3
Total estimated acquired intangible assets | $ | 410,545 |  |  | 13
The estimated fair value of customer-related intangible assets was determined using the income approach, which is based on projected cash flows discounted to their present value using discount rates that consider the timing and risk of the forecasted cash flows. The discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics. Acquired technology was valued using the replacement cost method, which required us to estimate the cost to construct an asset of equivalent utility at prices available at the time of the valuation analysis, with adjustments in value for physical deterioration and functional and economic obsolescence. Trademarks and trade names were valued using the relief-from-royalty approach. This method assumes that trademarks and trade names have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. This method required us to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted-average cost of capital. The discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics.

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://www.xbrl.org/2003/role/presentationRef -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