ACQUISITIONS:

Fiscal year 2014 acquisition

In fiscal year 2014, the Company acquired the assets of the customer relationship management business of International Business Machines Corporation, a New York corporation (“IBM”). The transaction was completed in phases with the initial closing completed on January 31, 2014, the second phase closing completed on April 30, 2014 and the final closing completed on September 30, 2014 for an aggregate purchase price of $425,690 after adjustments for working capital and other post-closing adjustments. During fiscal year 2015, the Company collected amounts towards working capital and other post-closing adjustments from IBM. These amounts are reflected in the Consolidated Statements of Cash Flows under investing activities.

The acquisition has been integrated into the Concentrix segment. It expands the Company's service portfolio, delivery capabilities and geographic reach, and brings deep process expertise and managerial talent. As part of the transaction, the Company entered into a multi-year agreement with IBM whereby Concentrix has become an IBM strategic business partner for customer relationship management services.

The acquisition has been accounted for as a business combination. Assets acquired and liabilities assumed were recorded at their fair values as of the respective closing dates. The total purchase price consideration is as follows:



Purchase consideration:	Fair Value
Cash	$	352,858
Common stock issued	71,106
Fair value of equity awards assumed	2,335
Receivable from IBM⁽¹⁾	(609		)
	$	425,690

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(1)	The receivable from IBM was related to working capital and other post-closing adjustments. The amount has been collected in December 2015.

The Company issued 1,266 shares of its common stock, at a fair value of $71,106 based on the closing price of the Company’s common stock on the New York Stock Exchange Composite Transactions Tape as of the date of issuance. Additionally, the Company assumed unvested restricted IBM stock-based awards with an estimated fair value of $11,125 on the respective closing dates. The Company exchanged the acquisition date fair value of the unvested restricted IBM stock awards of employees with the Company's equity-based awards or cash settled with deferred payouts. The fair value of the replaced IBM awards was based on the market value of the Company’s common stock on the respective closing dates. The fair value of the cash settled awards was based on IBM’s stock price on the acquisition date, adjusted for the exclusion of dividend equivalents. Of the equity awards issued, a portion relating to the pre-combination service period was allocated to the purchase consideration and the remainder of the estimated fair value will be expensed over the remaining service periods on a straight-line basis.

The total purchase price has been allocated between the acquisition of the IBM CRM business and a separate element representing IBM-initiated prepaid compensation plans. Of the total $16,326 prepaid amount, $13,236 was recorded in "Other current assets" and $3,090 in "Other assets" and is being expensed to "Selling, general and administrative expenses" over the service period.

The portion of the purchase price for the acquisition was allocated to the net tangible and intangible assets based on their fair values as of the respective closing dates. The excess of the purchase price over the net tangible and intangible assets was recorded as goodwill. The goodwill balance is attributed to the assembled workforce and expanded market opportunities due to the comprehensive service portfolio delivery capabilities and geographic reach resulting from the acquisition. Goodwill of $37,919 is deductible for U.S. and foreign income tax purposes.

The total purchase price allocation is as follows:



Purchase price allocation:	Fair Value
Cash	$	5,320
Accounts receivable	22,683
Other current assets	24,678
Property and equipment	44,245
Goodwill	134,191
Intangible assets	269,001
Other assets	17,028
Accounts payable	(29,349		)
Accrued liabilities	(35,635		)
Other long-term liabilities	(12,680		)
Deferred tax liabilities, noncurrent	(13,792		)
	$	425,690

The identifiable intangible assets acquired and their estimated useful lives are summarized as follows:



	Fair Value		Weighted Average Useful Life
Customer relationships	$	259,001	10 years
Technology	7,500		5-10 years
Trade names	2,500		5 years
Total intangibles acquired	$	269,001

Amortization of customer relationships and trade names is recorded in selling, general and administrative expenses. Amortization of technology is recorded in cost of revenue for services.

Acquisition and integration expenses were $10,109, $43,170 and $8,394 during the years ended November 30, 2015, 2014 and 2013, respectively, and consist of costs incurred to complete the acquisition and retention payments to integrate the business. Substantially all of the acquisition and integration expenses were recorded in "Selling, general and administrative expenses."

Fiscal year 2013 acquisitions

In April 2013, the Company acquired substantially all of the assets of Supercom Canada Limited ("Supercom Canada"), a distributor of IT and consumer electronics products and services in Canada. The purchase price was approximately $36,665 (CAD37,593), in cash, including $4,340, in deferred payments, subject to certain post-closing conditions, payable within 18 months. The Company has paid the entire deferred payment amount. Subsequent to the acquisition, the Company repaid debt and working capital lines in the amount of $53,721. Based on the purchase price allocation, the Company recorded net tangible assets of $26,912, goodwill of $5,384 and intangible assets of $4,369 in relation to this acquisition. This acquisition did not meet the conditions of a material business combination and was not subject to the disclosure requirements of accounting guidance for business combinations utilizing the purchase method of accounting. The acquisition is integrated into the Technology Solutions segment and has expanded the Company's existing product and service offerings in Canada.