XML 103 R10.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Acquisitions | 12 Months Ended
--- | ---
Dec. 31, 2012
Acquisitions | 2. Acquisitions Fiscal 2013 Acquisitions Online Resources Corporation On January 30, 2013, the Company and Online Resources Corporation (“ORCC”) entered into a Transaction Agreement (the “Transaction Agreement”) providing for the acquisition of ORCC by the Company. The boards of directors of both ORCC and the Company have approved the Transaction Agreement. Pursuant to the terms of the Transaction Agreement, the Company has commenced a tender offer (the “Offer”) for all of ORCC’s outstanding shares of common stock at a purchase price of $3.85 per ORCC share in cash for approximately $127 million. The Offer is subject to the conditions that there be validly tendered and not withdrawn prior to the expiration date of the Offer, a majority of all of the ORCC shares outstanding and entitled to vote. The Company and Special Value Opportunities Fund, LLC (“SVOF”) entered into a Shareholder Agreement for the Company to acquire the Series A-1 Convertible Preferred Stock of ORCC (“Preferred Stock”) held by SVOF. Purchase price for the Preferred Stock is expected to be approximately $130.5 million The Offer is also subject to the satisfaction of other customary conditions in accordance with the terms of the Transaction Agreement and the absence of a material adverse effect. The Offer is not subject to any financing condition. Profesionales en Transacciones Electronicas S.A During the first quarter of 2013, the Company acquired 100% of Profesionales en Transacciones Electronicas S.A. – Venezuela (“PTESA-V”), 100% of Profesionales en Transacciones Electronicas S.A. – Ecuador (“PTESA-E”), and the ACI related assets of Profesionales en Transacciones Electronicas S.A. – Colombia (“PTESA-C”), collectively “PTESA”. PTESA has been a long-term partner of the Company, serving customers in South America in sales, service and support functions. The addition of the PTESA team to the Company reinforces its commitment to serve the Latin American market. PTESA-E and PTESA-V were acquired for $2.8 million. The assets of PTESA-C were acquired for $11.4 million. The acquisition will be accounted for using the acquisition method of accounting with the Company identified as the acquirer. Factors contributing to the purchase price that resulted in goodwill (a portion of which is not tax deductible) include the acquisition of management, sales, and services personnel with the skills to market and support products of the Company in the Latin America region. Fiscal 2012 Acquisition Distra Pty Ltd On September 18, 2012, the Company closed the acquisition of 100% of Distra Pty Ltd. The Distra Universal Payments Platform delivers a fault-tolerant, Service-Oriented Architecture (SOA)-based payments platform that helps to significantly reduce the risk and cost of payments transformation without compromising security, performance, scalability and reliability. The integration of the Company’s and Distra’s technologies will enable financial institutions, processors and retailers to enhance the flexibility and performance of their existing payments infrastructure to address market needs, such as mobile, social channels and payment service hubs. In addition, this acquisition will enable the Company’s payment products to integrate more tightly with customers’ enterprise architectures, reducing their total cost of ownership. The aggregate purchase price of Distra of $49.8 million, which was paid with existing cash balances. In addition, the company paid $0.5 million in transaction fees in relation to the acquisition of Distra, which are included in general and administrative expense in the accompanying condensed consolidated statement of operations. The consideration paid by the Company to complete the acquisition has been allocated preliminarily to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. The allocation of purchase price is based upon certain external valuations and other analyses that have not been completed as of the date of this filing including but not limited to certain tax accounts. Accordingly, the purchase price allocations are preliminary and are subject to future adjustments during the maximum one-year allocation period. In connection with the acquisition, the Company recorded the following amounts based upon its preliminary purchase price allocation as of the date of the acquisition, which are subject to completion of the valuation and other analyses (in thousands, except weighted-average useful lives):
|  | Amount |  |  | Weighted-Average Useful Lives |
Total current assets acquired: |  | $ | 1,857 |  |  |  |  |
Noncurrent assets: |  |  |  |  |  |  |  |
Goodwill |  |  | 22,139 |  |  |  |  |
Software |  |  | 18,802 |  |  |  | 7 years |
Customer relationships |  |  | 6,200 |  |  |  | 10 years |
Deferred income taxes |  |  | 4,075 |  |  |  |  |
Other noncurrent assets |  |  | 96 |  |  |  |  |
Total assets acquired |  |  | 53,169 |  |  |  |  |
Current liabilities acquired |  |  | 3,419 |  |  |  |  |
Net assets acquired |  | $ | 49,750 |  |  |  |  |
During the three months ended December 31, 2012, the Company made adjustments to the preliminary purchase price allocation as additional information became available to software, customer relationships, deferred revenue, and deferred income taxes. These adjustments and any resulting adjustments to the statements of income were not material to the Company’s previously reported operating results or financial position. Factors contributing to the purchase price that resulted in the goodwill (which is not tax deductible) include the acquisition of management, technical, and services personnel with the skills to support products of the Company in addition to the enhanced focus on product innovation and enabling cross-selling opportunities when coupled with the Company’s suite of payments products. Pro forma results are not presented because they are not material. North Data Uruguay S.A. On May 24, 2012, the Company closed the acquisition of North Data Uruguay S.A. North Data had been a long-term partner of the Company, serving customers in South America in sales, service and support functions. The addition of the North Data team to the Company reinforces its commitment to serve the Latin American market. The aggregate purchase price of North Data was $4.6 million, which included cash acquired of $0.1 million. The consideration paid by the Company to complete the acquisition has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition, including $3.5 million of goodwill and $2.2 million of customer relationships with a weighted-average useful life of 12.6 years. Factors contributing to the purchase price that resulted in the goodwill (which is not tax deductible) include the acquisition of management, sales, and services personnel with the skills to market and support products of the Company in the Latin America region. Pro forma results are not presented because they are not material. S1 Corporation On February 10, 2012, the Company completed the exchange offer for S1 Corporation and all its subsidiaries. The acquisition was effectively closed on February 13, 2012 for approximately $368.7 million in cash and 5.9 million shares of the Company’s stock, including 95,500 shares reissued from Treasury stock, resulting in a total purchase price of $587.3 million (the “Merger”). The combination of the Company and S1 has created a leader in the global enterprise payments industry. The combined company has enhanced scale, breadth, and additional capabilities, as well as a complementary suite of products that will better serve the entire spectrum of financial institutions, processors and retailers. Under the terms of the transaction, S1 stockholders could elect to receive $10.00 in cash or 0.3148 shares of the Company’s stock for each S1 share they owned, subject to proration, such that in the aggregate 33.8% of S1 shares were exchanged for the Company’s shares and 66.2% were exchanged for cash. No S1 shareholders received fractional shares of the Company’s stock. Instead, the total number of shares that each holder of S1 common stock received was rounded down to the nearest whole number, and the Company paid cash for any resulting fractional share determined by multiplying the fraction by $34.14. Each outstanding option to acquire S1 common stock was canceled and terminated at the effective time of the Merger and converted into the right to receive the merger consideration with respect to the number of shares of S1 common stock that would have been issuable upon a net exercise of such option, assuming the market value of the S1 common stock at the time of such exercise was equal to the value of the merger consideration as of the close of trading on the day immediately prior to the effective date of the Merger. Any outstanding option with a per share exercise price that was greater than or equal to such amount was cancelled and terminated and no payment was made with respect thereto. In addition, each S1 restricted stock unit award outstanding immediately prior to the effective time of the Merger was fully vested and cancelled, and each holder of such awards became entitled to receive the Merger Consideration for each share of S1 common stock into which the vested portion of the awards would otherwise have been converted. Each S1 restricted stock award was vested immediately prior to the effective time of the Merger and was entitled to receive the Merger Consideration. Additionally, the Company had previously purchased 1,107,000 shares of S1 stock that were held as available-for-sale securities prior to the acquisition date. The fair value of those shares as of February 13, 2012, has been included in the total purchase price with the previously unrealized gain of approximately $1.6 million being recognized as a gain and included in other income (expense) in the statements of operations for the year ended December 31, 2012. The Company used $73.7 million of its cash balance for the acquisition in addition to $295.0 million of senior bank financing arranged through Wells Fargo Securities, LLC. See Note 6, Debt, for terms of the financing arrangement. The consideration paid by the Company to complete the acquisition has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. The purchase price of S1 Corporation’s common stock as of the date of acquisition was comprised of (in thousands):
|  | Amount |
Cash payments to S1 shareholders |  | $ | 365,918 |
Issuance of ACI common stock |  |  | 204,857 |
Reissuance of treasury stock |  |  | 2,174 |
Cash payments for noncompete agreements |  |  | 2,778 |
S1 shares previously held as available-for-sale securities |  |  | 11,557 |
Total Purchase Price |  | $ | 587,284 |
The Company incurred approximately $6.1 million in transaction related expenses during the year ended December 31, 2012, including fees to the investment bank, legal and other professional fees, which are included in general and administrative expenses in the accompanying condensed consolidated statement of operations. The Company has included the financial results of S1 in its consolidated financial statements from the date of acquisition. S1 contributed an estimated $161.9 million in revenue during the year ended December 31, 2012. S1 had an estimated $6.9 million in operating losses for the year ended December 31, 2012, which includes non-recurring severance and accelerated share-based compensation expense related to the integration activities. Certain revenue and expenses have been estimated that are no longer separately identifiable due to integration activities. In connection with the acquisition, the Company recorded the following amounts based upon its purchase price allocation during the year ended December 31, 2012 (in thousands, except weighted-average useful lives):
|  | Amount |  |  | Weighted-Average Useful Lives |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 97,748 |  |  |  |  |
Billed and accrued receivables, net |  |  | 65,329 |  |  |  |  |
Other current assets |  |  | 16,791 |  |  |  |  |
Total current assets acquired |  |  | 179,868 |  |  |  |  |
Noncurrent assets: |  |  |  |  |  |  |  |
Property and equipment |  |  | 18,440 |  |  |  |  |
Goodwill |  |  | 256,244 |  |  |  |  |
Software |  |  | 87,517 |  |  |  | 5 - 10 years |
Customer relationships |  |  | 108,690 |  |  |  | 10 - 20 years |
Trademarks |  |  | 4,500 |  |  |  | 3 years |
Covenant not to compete |  |  | 360 |  |  |  | 3 years |
Deferred income tax |  |  | 40,634 |  |  |  |  |
Other noncurrent assets |  |  | 11,004 |  |  |  |  |
Total assets acquired |  |  | 707,257 |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Deferred revenue |  |  | 34,671 |  |  |  |  |
Accrued employee compensation |  |  | 34,689 |  |  |  |  |
Other current liabilities |  |  | 28,387 |  |  |  |  |
Total current liabilities acquired |  |  | 97,747 |  |  |  |  |
Noncurrent liabilities: |  |  |  |  |  |  |  |
Deferred income tax |  |  | 15,795 |  |  |  |  |
Other noncurrent liabilities acquired |  |  | 6,431 |  |  |  |  |
Total liabilities acquired |  |  | 119,973 |  |  |  |  |
Net assets acquired |  | $ | 587,284 |  |  |  |  |
During the three months ended December 31, 2012, the Company made adjustments to the preliminary purchase price allocation as additional information became available to various income tax accounts. These adjustments and any resulting adjustments to the statements of income were not material to the Company’s previously reported operating results or financial position. Factors contributing to the purchase price that resulted in the goodwill (which is not tax deductible) include the acquisition of management, sales, and technology personnel with the skills to market new and existing products of the Company, enhanced global product capabilities, and complementary products and customers. The pro forma financial information in the table below presents the combined historical results of the combined Company as if the acquisition had occurred January 1, 2011 (in thousands, except per share data). The pro forma information is shown for illustrative purposes only and is not necessarily indicative of future results of operations of the Company or results of operations of the Company that would have actually occurred had the transactions been in effect for the periods presented. This pro forma information is not intended to represent or be indicative of actual results had the acquisition occurred as of the beginning of each period, nor is it necessarily indicative of future results and does not reflect potential synergies, integration costs, or other such costs or savings. Certain pro forma adjustments have been made to net income for the years ended December 31, 2012 and 2011 to give effect to estimated adjustments to expenses to remove the amortization on eliminated S1 historical identifiable intangible assets and added amortization expense for the value of identified intangibles acquired in the acquisition (primarily acquired software, customer relationships, trade names, and covenants not to compete), adjustments to interest expense to reflect the elimination of preexisting S1 debt and added estimated interest expense on the Company’s Term Credit Facility and additional borrowings on the Revolving Credit Facility and to eliminate share-based compensation expense for eliminated positions. Additionally, certain one-time transaction expenses that are a direct result of the acquisition have been excluded from the year ended December 31, 2012 and 2011.
|  | Pro Forma Results of Operations for the Year Ended December 31, |
|  | 2012 |  |  | 2011 |
Total Revenues |  | $ | 717,505 |  |  | $ | 722,210 |
Net Income |  |  | 72,810 |  |  |  | 46,221 |
Income per share |  |  |  |  |  |  |  |
Basic |  | $ | 1.88 |  |  | $ | 1.18 |
Diluted |  | $ | 1.82 |  |  | $ | 1.15 |
Fiscal 2011 Acquisition ISD Corporation On March 18, 2011, the Company closed the acquisition of ISD Holdings, Inc. and its 100% owned subsidiary ISD Corporation (collectively “ISD”). ISD’s suite of products enables retailers to consolidate, manage, secure and route all electronic transactions from their point-of-sale systems to third-party processors for authorization and settlement. The aggregate purchase price of ISD was $19.2 million, after working capital adjustments in accordance with the terms of the purchase agreement, which included cash acquired of $2.4 million. The allocation of the purchase price to specific assets and liabilities was based on the relative fair value of all assets and liabilities. In connection with the acquisition, the Company recorded the following amounts based upon its purchase price allocation during the year ended December 31, 2011 (in thousands, except weighted-average useful lives):
|  | Amount |  |  | Weighted-Average Useful Lives |
Cash |  | $ | 2,375 |  |  |  |  |
Accounts Receivable |  |  | 2,030 |  |  |  |  |
Other current assets |  |  | 958 |  |  |  |  |
Total current assets acquired |  |  | 5,363 |  |  |  |  |
Noncurrent assets: |  |  |  |  |  |  |  |
Property and equipment |  |  | 519 |  |  |  |  |
Goodwill |  |  | 11,380 |  |  |  |  |
Software |  |  | 2,338 |  |  |  | 5 years |
Customer relationships |  |  | 4,059 |  |  |  | 9 years |
Trade name |  |  | 247 |  |  |  | 5 years |
Total assets acquired |  |  | 23,906 |  |  |  |  |
Current liabilities acquired |  |  | (4,681 | ) |  |  |  |
Net assets acquired |  | $ | 19,225 |  |  |  |  |
Factors contributing to the purchase price that resulted in the goodwill (which is not tax deductible) include the acquisition of management, sales, and technology personnel with the skills to market new and existing products of the Company. Pro forma results are not presented because they are not material.

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 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1392-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1490-128463 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1524-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1383-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1486-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1500-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph 67-73 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141R -Paragraph F4 -Subparagraph e -Appendix F Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1497-128463 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 88-16 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 141 -Paragraph 51, 52 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration