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Note 3 - Acquisitions | 12 Months Ended
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Jan. 31, 2018
Notes to Financial Statements |
Business Combination Disclosure [Text Block] | Note 3 – Acquisitions Fiscal 2018 Acquisitions On May 18, 2017, we acquired Z-Firm LLC (“ShipRush”), a US-based provider of e-commerce multi-carrier parcel shipping solutions for small-to medium-sized businesses. The ShipRush platform helps customers streamline their supply chain and reduce transportation costs by automatically importing orders, comparing carrier rates, printing shipping labels for all major carriers, and tracking through final delivery. The purchase price for the acquisition was $14.2 million, net of cash acquired, which was funded using cash on hand. Additional contingent consideration of up to $3.0 million in cash is payable if certain revenue performance targets are met by ShipRush in the two years following the acquisition. The fair value of the contingent consideration was valued at $1.2 million at the acquisition date. The gross contractual amount of trade receivables acquired was $0.4 million with a fair value of $0.4 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was nominal. The completion of the initial purchase price allocation is pending the finalization of the fair value for certain taxation-related balances, accrued liability balances as well as potential unrecorded liabilities. We expect to finalize the purchase price allocation on or before May 18, 2018. On June 1, 2017, we acquired substantially all of the assets of PCSTrac, Inc., including certain related assets of Progressive Computer Services Inc., doing business as PCS Technologies (collectively referred to as “PCSTrac”). US-based PCSTrac helps specialty retailers and their logistics service providers collaborate to improve carton-level visibility for shipments from distribution centers to stores. PCSTrac’s solutions provide visibility and insight into the store replenishment supply chain, helping increase sales, enhance loss prevention, and improve inventory control. The total purchase price for the acquisition was $11.5 million, net of cash acquired, which was funded using cash on hand. The gross contractual amount of trade receivables acquired was $0.4 million with a fair value of $0.4 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was nominal. The completion of the initial purchase price allocation is pending the finalization of the fair value for certain taxation-related balances, accrued liability balances as well as potential unrecorded liabilities. We expect to finalize the purchase price allocation on or before June 1, 2018. On August 14, 2017, we acquired MacroPoint LLC (“MacroPoint”), an electronic transportation network providing location-based truck tracking and predictive freight capacity data content. US-based MacroPoint runs a connected network helping transportation brokers, logistics service providers and shippers track the locations of deliveries in trucks as well as predictive freight capacity to help identify early opportunities for additional freight moves. The purchase price for the acquisition was approximately $106.2 million, net of cash acquired, which was funded using $20.0 million of our common shares, $80.0 million from drawing on our credit facility and the balance from cash on hand. The gross contractual amount of trade receivables acquired was $2.0 million with a fair value of $2.0 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was nominal. The completion of the initial purchase price allocation is pending the finalization of the fair value for certain taxation-related balances, accrued liability balances as well as potential unrecorded liabilities. We expect to finalize the purchase price allocation on or before August 14, 2018. For the businesses acquired during fiscal 2018, we incurred acquisition-related costs of $0.9 million. The acquisition-related costs were primarily for advisory services and are included in other charges in our consolidated statements of operations. During 2018, we have recognized aggregate revenues of $12.6 million, respectively, and aggregate net income of $0.6 million, respectively, from ShipRush, PCSTrac and MacroPoint since the date of acquisition in our consolidated statements of operations. The preliminary purchase price allocations for businesses acquired during 2018, which have not been finalized, are as follows:
|  | ShipRush |  |  | PCSTrac |  |  | MacroPoint |  |  | Total |
Purchase price consideration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash, less cash acquired related to ShipRush ($253), PCSTrac (nil) and MacroPoint ($2,098) |  |  | 14,198 |  |  |  | 11,492 |  |  |  | 86,177 |  |  |  | 111,867 |
Common shares issued |  |  | - |  |  |  | - |  |  |  | 20,000 |  |  |  | 20,000 |
Contingent consideration |  |  | 1,233 |  |  |  | - |  |  |  | - |  |  |  | 1,233 |
Net working capital adjustments payable |  |  | 88 |  |  |  | 40 |  |  |  | 163 |  |  |  | 291 |
|  |  | 15,519 |  |  |  | 11,532 |  |  |  | 106,340 |  |  |  | 133,391 |
Allocated to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets, excluding cash acquired |  |  | 461 |  |  |  | 467 |  |  |  | 2,127 |  |  |  | 3,055 |
Current liabilities |  |  | (266 | ) |  |  | (10 | ) |  |  | (1,693 | ) |  |  | (1,969 | )
Deferred revenue |  |  | (609 | ) |  |  | - |  |  |  | (5,787 | ) |  |  | (6,396 | )
Net tangible (liabilities) assets assumed |  |  | (414 | ) |  |  | 457 |  |  |  | (5,353 | ) |  |  | (5,310 | )
Finite life intangible assets acquired: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer agreements and relationships |  |  | 2,400 |  |  |  | 1,850 |  |  |  | 26,030 |  |  |  | 30,280 |
Existing technology |  |  | 4,710 |  |  |  | 3,270 |  |  |  | 17,170 |  |  |  | 25,150 |
In-process research and development |  |  | - |  |  |  | - |  |  |  | 290 |  |  |  | 290 |
Tradenames |  |  | 120 |  |  |  | 60 |  |  |  | 570 |  |  |  | 750 |
Non-compete covenants |  |  | 100 |  |  |  | 80 |  |  |  | 2,420 |  |  |  | 2,600 |
Goodwill |  |  | 8,603 |  |  |  | 5,815 |  |  |  | 65,213 |  |  |  | 79,631 |
|  |  | 15,519 |  |  |  | 11,532 |  |  |  | 106,340 |  |  |  | 133,391 |
The above transactions were accounted for using the acquisition method in accordance with ASC Topic 805, “Business Combinations”. The purchase price allocations in the table above represents our estimates of the allocations of the purchase price and the fair value of net assets acquired. The preliminary purchase price allocations may differ from the final purchase price allocations, and these differences may be material. Revisions to the allocations will occur as additional information about the fair value of assets and liabilities becomes available. The final purchase price allocations will be completed within one year from the acquisition dates. The acquired intangible assets are being amortized over their estimated useful lives as follows:
|  | ShipRush (in years) |  |  | PCSTrac (in years) |  |  | MacroPoint (in years) |
Customer agreements and relationships |  |  | 9 |  |  |  | 13 |  |  |  | 12 |
Existing technology |  |  | 5 |  |  |  | 5 |  |  |  | 5 |
Trade names |  |  | 8 |  |  |  | 4 |  |  |  | 8 |
Non-compete covenants |  |  | 5 |  |  |  | 5 |  |  |  | 5 |
The goodwill on the ShipRush, PCSTrac and MacroPoint acquisitions arose as a result of the combined strategic value to our growth plan. The goodwill arising from the PCSTrac, ShipRush and MacroPoint acquisitions is deductible for tax purposes. Fiscal 2017 Acquisitions On December 23, 2016, we acquired The Datamyne Inc. (“Datamyne”), a provider of cloud-based trade data content solutions for customers to analyze import and export trade activity. Datamyne, primarily operating in the U.S. and South America, collects, cleanses and commercializes logistics trade data from over 50 nations across five continents, including key markets in North America, Latin America, Asia, Africa, and the European Union. Subscribers use Datamyne’s web-based solutions and business intelligence tools to augment, speed up and simplify trade data research, and to shape global marketing, prospecting, and sourcing strategies. The total purchase price for the acquisition was $52.5 million, net of cash acquired, which was funded with cash on hand. The gross contractual amount of trade receivables acquired was $1.5 million with a fair value of $1.4 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was $0.1 million. In the second quarter of fiscal 2018, the working capital for Datamyne was finalized resulting in a $0.4 million decrease in goodwill and a $0.4 million decrease in current liabilities. The purchase price was finalized in the three month period ended January 31, 2018 with no adjustments. On November 11, 2016, we acquired 4Solutions Information Technology Pty Ltd. ( “4Solutions” ), an Australia-based provider of cloud-based business-to-business supply chain integration solutions. 4Solutions operates the Health Supply Network, an electronic document exchange network for the healthcare community, which allows large multi-national, local pharmaceutical manufacturers and wholesalers connect and collaborate to automate a wide array of supply chain processes. The total purchase price for the acquisition was approximately $2.5 million, net of cash acquired, which was funded with cash on hand. The gross contractual amount of trade receivables acquired was $0.2 million with a fair value of $0.2 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was nil. The purchase price was finalized in the three month period ended October 31, 2017 with no adjustments. On October 12, 2016, we acquired Appterra LLC (“Appterra”), a US-based provider of cloud-based business-to-business supply chain integration solutions. Appterra’s solutions help its customers connect electronically, automate supply chain processes, and enhance collaboration and visibility among global trading partners. The total purchase price for the acquisition was $5.7 million, net of cash acquired, which was funded with cash on hand. Additional contingent consideration of up to $1.6 million in cash is payable if certain revenue performance targets are met by Appterra in the two years following the acquisition. The fair value of the contingent consideration was valued at $0.7 million at the acquisition date. The gross contractual amount of trade receivables acquired was $0.1 million with a fair value of $0.1 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was nil. The purchase price was finalized in the three month period ended October 31, 2017 with no adjustments. On April 29, 2016, we acquired pixi* Software GmbH (“Pixi”), a Germany-based provider of technology solutions for e-commerce order fulfilment and warehouse management. Pixi’s solutions help its customers automate e-commerce processes originating from online orders, and Pixi is currently integrated with hundreds of e-commerce sites in Europe. The total purchase price for the acquisition was approximately $10.6 million, net of cash acquired, which was funded by drawing on our credit facility. The draw on the credit facility has subsequently been repaid. The gross contractual amount of trade receivables acquired was $0.6 million with a fair value of $0.4 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was $0.2 million. The purchase price was finalized in the three month period ended April 30, 2017 with no adjustments. The final purchase price allocations for businesses we acquired during 2017 are as follows:
|  | Pixi |  |  | Appterra |  |  | 4Solutions |  |  | Datamyne |  |  | Total |
Purchase price consideration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash, less cash acquired related to Pixi ($688), Appterra ($66), 4Solutions ($281) and Datamyne ($2,637) |  |  | 10,648 |  |  |  | 5,703 |  |  |  | 2,456 |  |  |  | 52,541 |  |  |  | 71,348 |
Contingent consideration |  |  | - |  |  |  | 700 |  |  |  | - |  |  |  | - |  |  |  | 700 |
Net working capital adjustments (receivable) |  |  | (26 | ) |  |  | (118 | ) |  |  | 4 |  |  |  | (567 | ) |  |  | (707 | )
|  |  | 10,622 |  |  |  | 6,285 |  |  |  | 2,460 |  |  |  | 51,974 |  |  |  | 71,341 |
Allocated to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets, excluding cash acquired |  |  | 500 |  |  |  | 391 |  |  |  | 257 |  |  |  | 1,837 |  |  |  | 2,985 |
Property and equipment |  |  | 46 |  |  |  | 21 |  |  |  | 33 |  |  |  | 87 |  |  |  | 187 |
Deferred income tax asset |  |  | - |  |  |  | 18 |  |  |  | - |  |  |  | 3,281 |  |  |  | 3,299 |
Current liabilities |  |  | (523 | ) |  |  | (328 | ) |  |  | (182 | ) |  |  | (1,263 | ) |  |  | (2,296 | )
Deferred revenue |  |  | (78 | ) |  |  | (633 | ) |  |  | (164 | ) |  |  | (2,979 | ) |  |  | (3,854 | )
Deferred income tax liability |  |  | (1,870 | ) |  |  | - |  |  |  | (443 | ) |  |  | (10,955 | ) |  |  | (13,268 | )
Income tax liability |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (694 | ) |  |  | (694 | )
Net tangible liabilities assumed |  |  | (1,925 | ) |  |  | (531 | ) |  |  | (499 | ) |  |  | (10,686 | ) |  |  | (13,641 | )
Finite life intangible assets acquired: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer agreements and relationships |  |  | 1,375 |  |  |  | 1,840 |  |  |  | 910 |  |  |  | 13,300 |  |  |  | 17,425 |
Existing technology |  |  | 4,467 |  |  |  | 1,160 |  |  |  | 607 |  |  |  | 12,500 |  |  |  | 18,734 |
Trade names |  |  | - |  |  |  | - |  |  |  | 91 |  |  |  | 1,790 |  |  |  | 1,881 |
Non-compete covenants |  |  | - |  |  |  | 50 |  |  |  | - |  |  |  | 390 |  |  |  | 440 |
Goodwill |  |  | 6,705 |  |  |  | 3,766 |  |  |  | 1,351 |  |  |  | 34,680 |  |  |  | 46,502 |
|  |  | 10,622 |  |  |  | 6,285 |  |  |  | 2,460 |  |  |  | 51,974 |  |  |  | 71,341 |
No in-process research and development was acquired in these transactions. The acquired intangible assets are being amortized over their estimated useful lives as follows:
|  | Pixi (in years) |  | Appterra (in years) |  | 4Solutions (in years) |  | Datamyne (in years)
Customer agreements and relationships |  |  | 9 |  |  |  | 11 |  |  |  | 8 |  |  |  | 9 |
Existing technology |  |  | 5 |  |  |  | 5 |  |  |  | 2 |  |  |  | 6 |
Trade names |  |  | N/A |  |  |  | N/A |  |  |  | 5 |  |  |  | 9 |
Non-compete covenants |  |  | N/A |  |  |  | 5 years |  |  |  | N/A |  |  |  | 5 |
The goodwill on the Pixi, Appterra, 4Solutions and Datamyne acquisitions arose as a result of the combined strategic value to our growth plan. The goodwill arising from the Pixi, 4Solutions and Datamyne acquisitions are not deductible for tax purposes. The goodwill arising from the Appterra acquisition is deductible for tax purposes. Fiscal 2016 Acquisitions On November 25, 2015, we acquired Oz Development Inc. (“Oz”), a US-based provider of application integration solutions that help small-to-medium sized businesses (“SMBs”) automate a number of logistics and supply chain processes. The solutions help a growing SMB community connect to, and integrate with, leading SMB ERP, CRM and e-commerce platforms. The total purchase price for the acquisition was $29.5 million, net of cash acquired, which was funded with cash on hand. The gross contractual amount of trade receivables acquired was $0.3 million with a fair value of $0.3 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was nil. The purchase price was finalized in the three month period ended January 31, 2016 with no adjustments. On July 22, 2015, we acquired all outstanding shares of privately-held BearWare Inc. (“BearWare”), a US-based provider of mobile solutions designed to improve collaboration between retailers and their logistics service providers. BearWare's system leverages mobile technologies to scan cartons at each point from the distribution centers through to the store front, helping retailers and their logistics service providers collaborate on store shipments. The total purchase price for the acquisition was $11.2 million, net of cash acquired, which was funded with cash on hand. The gross contractual amount of trade receivables acquired was $0.8 million with a fair value of $0.7 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was $0.1 million. The purchase price was finalized in the three month period ended July 31, 2016 with no adjustments. On July 20, 2015, we acquired all outstanding shares of privately-held MK Data Services LLC (“MK Data”), a US-based provider of denied party screening trade data and solutions. MK Data's technology screens shipments against a comprehensive, frequently updated, international database of restricted parties helping businesses comply with denied party screening requirements. The total purchase price for the acquisition was $80.2 million, net of cash acquired, which was funded with cash on hand. The acquisition included an employee retention agreement to provide up to $3.1 million in retention bonuses to employees’ conditional on future services rendered over a specified time period. These amounts were expensed over the service period and paid in fiscal 2018. The gross contractual amount of trade receivables acquired was $1.3 million with a fair value of $1.2 million at the date of acquisition. Our acquisition date estimate of contractual cash flows not expected to be collected was $0.1 million. The purchase price was finalized in the three month period ended July 31, 2016 with no adjustments. The final purchase price allocations for businesses we acquired during 2016 are as follows:
|  |  | MK Data |  |  |  | BearWare |  |  |  | Oz |  |  |  | Total |
Purchase price consideration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash, net of cash acquired related to MK Data ($345), BearWare ($243) and Oz ($870) |  |  | 80,151 |  |  |  | 11,243 |  |  |  | 29,459 |  |  |  | 120,853 |
Net working capital adjustments (receivable) |  |  | (84 | ) |  |  | (19 | ) |  |  | (24 | ) |  |  | (127 | )
|  |  | 80,067 |  |  |  | 11,224 |  |  |  | 29,435 |  |  |  | 120,726 |
Allocated to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets, excluding cash acquired |  |  | 2,083 |  |  |  | 759 |  |  |  | 466 |  |  |  | 3,308 |
Property and equipment |  |  | - |  |  |  | - |  |  |  | 29 |  |  |  | 29 |
Current liabilities |  |  | (204 | ) |  |  | (112 | ) |  |  | (293 | ) |  |  | (609 | )
Deferred revenue |  |  | (2,610 | ) |  |  | (451 | ) |  |  | (1,634 | ) |  |  | (4,695 | )
Net tangible assets (liabilities) assumed |  |  | (731 | ) |  |  | 196 |  |  |  | (1,432 | ) |  |  | (1,967 | )
Finite life intangible assets acquired: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer agreements and relationships |  |  | 7,500 |  |  |  | 2,600 |  |  |  | 5,400 |  |  |  | 15,500 |
Existing technology |  |  | 22,000 |  |  |  | 3,400 |  |  |  | 7,500 |  |  |  | 32,900 |
Tradenames |  |  | 190 |  |  |  | 70 |  |  |  | 90 |  |  |  | 350 |
Non-compete covenants |  |  | - |  |  |  | - |  |  |  | 240 |  |  |  | 240 |
Goodwill |  |  | 51,108 |  |  |  | 4,958 |  |  |  | 17,637 |  |  |  | 73,703 |
|  |  | 80,067 |  |  |  | 11,224 |  |  |  | 29,435 |  |  |  | 120,726 |
No in-process research and development was acquired in these transactions. The acquired intangible assets are being amortized over their estimated useful lives as follows:
|  |  | MK Data |  |  |  | BearWare |  |  |  | Oz |
Customer agreements and relationships (in years) |  |  | 13 |  |  |  | 11 |  |  |  | 9 |
Existing technology (in years) |  |  | 7 |  |  |  | 5 |  |  |  | 5 |
Tradenames (in years) |  |  | 5 |  |  |  | 5 |  |  |  | 3 |
Non-compete covenants (in years) |  |  | N/A |  |  |  | N/A |  |  |  | 5 |
The goodwill on the MK Data, BearWare and Oz acquisitions arose as a result of the combined strategic value to our growth plan. The goodwill arising from the MK Data, BearWare and Oz acquisitions is deductible for tax purposes. Pro Forma Results of Operations (Unaudited) The financial information in the table below summarizes selected results of operations on a pro forma basis as if we had acquired MacroPoint, PCSTrac, ShipRush, Datamyne, 4Solutions, Appterra, Pixi, Oz, BearWare and MK Data as of the beginning of each of the periods presented. This pro forma information is for information purposes only and does not purport to represent what our results of operations for the periods presented would have been had the acquisitions of MacroPoint, PCSTrac, ShipRush, Datamyne, 4Solutions, Appterra, Pixi, Oz, BearWare and MK Data occurred at the beginning of the period indicated, or to project our results of operations for any future period.
|  |  | January 31, 2018 |  |  |  | January 31, 2017 |  |  |  | January 31, 2016 |
Revenues |  |  | 247,093 |  |  |  | 236,972 |  |  |  | 228,665 |
Net income |  |  | 26,673 |  |  |  | 22,414 |  |  |  | 17,381 |
Earnings per share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 0.35 |  |  |  | 0.30 |  |  |  | 0.23 |
Diluted |  |  | 0.35 |  |  |  | 0.29 |  |  |  | 0.23 |

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- 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
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