ACQUISITION:

On August 1, 2016, the Company acquired 100% of the Minacs group of companies (“Minacs”), which provide integrated business process outsourcing services, for a preliminary purchase price of $435,635, subject to certain post-closing adjustments. As of August 31, 2016, the Company had paid $425,903 and was obligated to pay an amount of $9,732 in cash. This remaining amount may be adjusted based upon the final value of the net tangible assets acquired.

The acquisition has been included in the Concentrix segment. Minacs provides greater scale and strengthens the Company’s position as a top global provider of customer engagement services, enhances domain expertise in Concentrix’s automotive industry vertical and accelerates Marketing Optimization and Internet of Things solutions with Minacs’ proprietary technology.

The acquisition has been accounted for as a business combination. The preliminary purchase price for the acquisition was allocated to the net tangible and intangible assets based on their preliminary fair values as of the acquisition date. The excess of the purchase price over the preliminary net tangible assets and preliminary intangible assets was recorded as goodwill. The goodwill balance is attributed to the assembled workforce and expanded market opportunities due to domain expertise in the automotive industry vertical and enhanced technology platforms resulting from the acquisition. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, fair value of operating leases assumed, income and non-income based taxes and residual goodwill. The Company expects to continue to obtain information for the purpose of determining the fair value of the net assets acquired at the closing date during the measurement period and the amount of goodwill that will be deductible for tax purposes.

The total preliminary purchase price allocation is as follows:



Preliminary purchase price allocation:	Fair Value
Cash and cash equivalents	$	21,419
Restricted cash	2,199
Accounts receivable	92,875
Other current assets	23,868
Property and equipment	21,495
Goodwill	221,377
Intangible assets	147,050
Other assets	2,819
Borrowings, current	(7,974		)
Accounts payable	(1,985		)
Accrued compensation and benefits	(22,726		)
Other accrued liabilities	(16,473		)
Other long-term liabilities	(146		)
Deferred tax liabilities, non-current	(48,163		)
	$	435,635

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



	Preliminary Fair Value		Weighted Average Useful Life
Customer relationships	$	130,000	10 years
Technology	15,300		5 years
Trade names	1,750		1 year
Total intangibles acquired	$	147,050

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.”

During the three and nine months ended August 31, 2016, the Minacs business contributed approximately $36,163 of revenue and $917 of net income to the Company's total consolidated results of operations. The operating results of Minacs are not material for pro forma disclosure. Acquisition and integration expenses were $2,722 during the three and nine months ended August 31, 2016, and consist of costs incurred to complete the acquisition and related integration charges. These charges were recorded in “Selling, general and administrative expenses.”