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Acquisitions | 12 Months Ended
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Dec. 31, 2016
Business Combinations [Abstract] |
Acquisitions | 2. Acquisitions Fiscal 2015 Acquisitions PAY.ON On November 4, 2015, the Company completed the acquisition of PAY.ON for $186.1 million in cash and stock. PAY.ON is a leader in eCommerce payments gateway solutions to payment service providers globally. Their advanced platform-based solution complements and strengthens the Company’s Merchant Retail Omni-Channel Universal Payments offerings. The combined entities provides customers the ability to deliver a seamless omni-channel customer payment experience in store, mobile, and online. Under the terms of the agreement, the Company acquired 100% of the equity of PAY.ON in a combination of cash and stock. The Company used approximately $181.0 million from its Revolving Credit Facility. See Note 5, Debt, for terms of the Credit Facility. The purchase price of PAY.ON was comprised of (in thousands):
|  | Amount |
Cash payments to PAY.ON shareholders |  | $ | 180,994 |
Issuance of ACI common stock |  |  | 5,379 |
Working capital adjustment |  |  | (232 | )
Total purchase price |  | $ | 186,141 |
The aggregate purchase price of PAY.ON was $186.1 million, after working capital adjustments in accordance with the terms of the acquisition agreement. The consideration paid by the Company has been allocated to specific assets and liabilities based on the relative fair value of all assets and liabilities. The Company incurred approximately $0.9 million in transaction related expenses during the year ended December 31, 2015, including fees to the investment bank, legal and other professional fees, which are included in general and administrative expenses in the accompanying consolidated financial statements. Under the terms of the PAY.ON acquisition agreement, the Company issued 476,750 shares of ACI common stock to two key PAY.ON employees (“PAY.ON RSAs”) with a fair value of $11.3 million on the date of grant. The awards have requisite service periods of two years and vest in increments of 25% every six months from the date of the acquisition. The PAY.ON RSA grants provide for the payment of dividends on the Company’s common stock, if any, to the participant during the requisite service period (vesting period) and the participant has voting rights for each share of common stock. The Company recognizes compensation expense for the PAY.ON RSAs on a straight-line basis over the requisite service period. PAY.ON contributed approximately $16.5 million and $2.9 million in revenue and an operating loss of $17.1 million and $2.1 million for the years ended December 31, 2016 and 2015, respectively. In connection with the acquisition, the Company recorded the following amounts based upon its purchase price allocation as of December 31, 2016.
(in thousands, except weighted average useful lives) |  | Weighted-Average Useful Lives |  |  | PAY.ON |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  | $ | 1,627 |
Receivables |  |  |  |  |  |  | 2,649 |
Other current assets |  |  |  |  |  |  | 502 |
Total current assets acquired |  |  |  |  |  |  | 4,778 |
Noncurrent assets: |  |  |  |  |  |  |  |
Property and equipment |  |  |  |  |  |  | 332 |
Goodwill |  |  |  |  |  |  | 140,526 |
Software |  |  | 5 years |  |  |  | 34,150 |
Customer relationships |  |  | 15 years |  |  |  | 21,718 |
Trademarks |  |  | 5 years |  |  |  | 2,300 |
Other noncurrent assets |  |  |  |  |  |  | 28 |
Total assets acquired |  |  |  |  |  |  | 203,832 |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  |  |  |  |  |  | 1,058 |
Employee compensation |  |  |  |  |  |  | 681 |
Other current liabilities |  |  |  |  |  |  | 866 |
Total current liabilities acquired |  |  |  |  |  |  | 2,605 |
Noncurrent liabilities: |  |  |  |  |  |  |  |
Deferred income taxes |  |  |  |  |  |  | 15,086 |
Total liabilities acquired |  |  |  |  |  |  | 17,691 |
Net assets acquired |  |  |  |  |  | $ | 186,141 |
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 product capabilities, complementary products and customers. Pro forma results for PAY.ON are not presented because they are not material. Fiscal 2014 Acquisitions Retail Decisions On August 12, 2014, the Company completed the acquisition of ReD for $205.1 million in cash. As a leader in fraud prevention solutions, the acquisition of ReD enhanced the Company’s Universal Payments strategy and further strengthened the Company’s leadership position in the fast-growing payments risk management space. To fund this acquisition and related transaction fees, the Company drew an additional $60.5 million on the Revolving Credit Facility and increased the Term portion of the Credit Agreement by an additional $150.0 million. See Note 5, Debt, for terms of the financing arrangement. The Company incurred approximately $2.7 million in transaction related expenses during the year ended December 31, 2014, including fees to the investment bank, legal and other professional fees, which are included in general and administrative expenses in the accompanying consolidated financial statements. ReD contributed approximately $42.7 million and $17.9 million in revenue and $6.8 million and $1.9 million of operating income for the years ended December 31, 2015 and 2014, respectively, which includes severance expense related to the integration activities. 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. In connection with the acquisition, the Company recorded the following amounts based upon its purchase price allocation as of December 31, 2015.
(in thousands, except weighted average useful lives) |  | Weighted-Average Useful Lives |  |  | Retail Decisions |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  | $ | 795 |
Receivables |  |  |  |  |  |  | 10,106 |
Other current assets |  |  |  |  |  |  | 10,282 |
Total current assets acquired |  |  |  |  |  |  | 21,183 |
Noncurrent assets: |  |  |  |  |  |  |  |
Property and equipment |  |  |  |  |  |  | 3,354 |
Goodwill |  |  |  |  |  |  | 137,915 |
Software |  |  | 5-7 years |  |  |  | 33,136 |
Customer relationships |  |  | 18 years |  |  |  | 50,480 |
Trademarks |  |  | 5 years |  |  |  | 3,980 |
Deferred income taxes |  |  |  |  |  |  | 565 |
Other noncurrent assets |  |  |  |  |  |  | 416 |
Total assets acquired |  |  |  |  |  |  | 251,029 |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  |  |  |  |  |  | 4,624 |
Employee compensation |  |  |  |  |  |  | 6,046 |
Other current liabilities |  |  |  |  |  |  | 11,683 |
Total current liabilities acquired |  |  |  |  |  |  | 22,353 |
Noncurrent liabilities: |  |  |  |  |  |  |  |
Deferred income taxes |  |  |  |  |  |  | 23,427 |
Other noncurrent liabilities |  |  |  |  |  |  | 164 |
Total liabilities acquired |  |  |  |  |  |  | 45,944 |
Net assets acquired |  |  |  |  |  | $ | 205,085 |
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 product capabilities, complementary products and customers. Pro forma results for ReD are not presented because they are not material.

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