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Acquisitions | 12 Months Ended
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Dec. 31, 2021
Business Combinations [Abstract] |
Acquisitions | 3. Acquisitions Redflex Acquisition On June 17, 2021, the Company completed the acquisition of Redflex, a public company limited by shares, incorporated in Australia and formerly listed on the Australian Securities Exchange. Redflex is a provider of intelligent traffic management products and services that are sold and managed in the Asia Pacific, North America, Europe, and Middle East regions. Redflex designs, manufactures, and operates a wide range of platform-based solutions, utilizing advanced sensor and image capture technologies that enable active management of state and local motorways. The Company has included the financial results of Redflex in the consolidated financial statements from the date of acquisition. Pursuant to the Scheme Implementation Agreement (the “Agreement”) entered into by the Company and Redflex on January 21, 2021, as amended by the Deed of Amendment and Consent, dated April 30, 2021, VM Consolidated, Inc., an indirect wholly owned subsidiary of the Company, purchased one hundred percent of the outstanding equity of Redflex at A$0.96 per share at consideration of A$152.5 million, or approximately US$117.9 million. Transaction costs for Redflex were $9.7 million which primarily related to professional fees and other expenses related to the acquisition, and were included within the selling, general and administrative expenses in the consolidated statements of operations. The allocation of the preliminary purchase consideration is summarized as follows:
($ in thousands) |  | Reported At June 30, 2021 |  |  | Measurement Period Adjustments |  |  | At December 31, 2021 |
Assets acquired |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 8,760 |  |  | $ | — |  |  | $ | 8,760 |
Restricted cash |  |  | 2,163 |  |  |  | — |  |  |  | 2,163 |
Accounts receivable |  |  | 6,870 |  |  |  | — |  |  |  | 6,870 |
Unbilled receivables |  |  | 7,744 |  |  |  | (2,461 | ) |  |  | 5,283 |
Property and equipment |  |  | 27,541 |  |  |  | 2,268 |  |  |  | 29,809 |
Deferred tax assets |  |  | 9,192 |  |  |  | 1,123 |  |  |  | 10,315 |
Other assets |  |  | 13,729 |  |  |  | 5,518 |  |  |  | 19,247 |
Trademark |  |  | 900 |  |  |  | — |  |  |  | 900 |
Customer relationships |  |  | 23,500 |  |  |  | 2,400 |  |  |  | 25,900 |
Developed technology |  |  | 18,200 |  |  |  | — |  |  |  | 18,200 |
Total assets acquired |  |  | 118,599 |  |  |  | 8,848 |  |  |  | 127,447 |
Liabilities assumed |  |  |  |  |  |  |  |  |
Accounts payable and accrued liabilities |  |  | 30,137 |  |  |  | 1,799 |  |  |  | 31,936 |
Deferred revenue |  |  | 1,772 |  |  |  | 6,276 |  |  |  | 8,048 |
Long-term debt |  |  | 14,014 |  |  |  | — |  |  |  | 14,014 |
Other long-term liabilities |  |  | 9,948 |  |  |  | 1,788 |  |  |  | 11,736 |
Total liabilities assumed |  |  | 55,871 |  |  |  | 9,863 |  |  |  | 65,734 |
Goodwill |  |  | 55,199 |  |  |  | 1,015 |  |  |  | 56,214 |
Total purchase consideration |  | $ | 117,927 |  |  | $ | — |  |  | $ | 117,927 |
The Company recorded measurement period adjustments from the initial purchase price allocation presented as of June 30, 2021, to reflect new information obtained about facts and circumstances that existed as of the Redflex acquisition date. There was no material impact to the statement of operations as a result of these adjustments. As of December 31, 2021, the evaluation of historical Redflex tax positions and the impact on assumed uncertain tax positions and other tax attributes is preliminary and the Company expects to finalize it as soon as practicable, but not later than one year from the acquisition date. Goodwill consists largely of the expected cash flows and future growth anticipated for the Company and was assigned to the Company’s Government Solutions segment. Management has determined that the Redflex international operations represent a new reporting unit for the purposes of assessing potential impairment of goodwill, and as a result of the acquisition, the Government Solutions segment has two reporting units. The goodwill is not expected to be deductible for tax purposes. The customer relationships value was based on the multi-period excess earnings methodology utilizing projected cash flows. The significant assumptions used to value customer relationships included, among others, customer churn rates, forecasted revenue growth rates attributable to existing customers, forecasted EBITDA margins and the discount rate. The values for the trademark and the developed technology related assets were based on a relief-from-royalty method. The significant assumptions used to value these intangible assets included, among others, forecasted revenue growth rates, royalty rates and the expected obsolescence curve. The trademark, customer relationships and the developed technology related assets were assigned useful lives of 5.0 years, 10.0 years, and 8.7 years, respectively. T2 Systems Acquisition On December 7, 2021, the Company acquired all of the outstanding shares of T2 Systems Parent Corporation (“T2 Systems”), which offers an integrated suite of parking software and hardware solutions to its customers. This acquisition supports our strategy to expand and diversify into new markets within the mobility sector. The Company has included the financial results of T2 Systems in the consolidated financial statements from the date of acquisition, and reported within the newly created Parking Solutions segment. The Company paid a purchase price of $353.2 million. Transaction costs for T2 System s were $2.7 million which primarily related to professional fees and other expenses related to the acquisition, and were included within the selling, general and administrative expenses in the consolidated statements of operations. The allocation of the preliminary purchase consideration is summarized as follows:
($ in thousands) |  |  |
Assets acquired |  |  |
Cash and cash equivalents |  | $ | 13,866 |
Restricted cash |  |  | 228 |
Accounts receivable |  |  | 9,673 |
Unbilled receivables |  |  | 2,153 |
Inventory |  |  | 7,467 |
Property and equipment |  |  | 3,336 |
Prepaid and other assets |  |  | 7,477 |
Trademark |  |  | 3,200 |
Customer relationships |  |  | 164,300 |
Developed technology |  |  | 19,300 |
Total assets acquired |  |  | 231,000 |
Liabilities assumed |  |  |
Accounts payable and accrued liabilities |  |  | 10,379 |
Deferred revenue |  |  | 21,253 |
Deferred tax liability |  |  | 37,129 |
Other liabilities |  |  | 4,228 |
Total liabilities assumed |  |  | 72,989 |
Goodwill |  |  | 195,226 |
Total assets acquired and liabilities assumed |  | $ | 353,237 |
Goodwill consists largely of the expected cash flows and future growth anticipated for the Company and was assigned to the Company’s Parking Solutions segment. The goodwill is not expected to be deductible for tax purposes. The preliminary customer relationships value was based on the multi-period excess earnings methodology utilizing projected cash flows. The significant assumptions used to value customer relationships included, among others, customer upsell and churn rates, forecasted revenue growth rates attributable to existing customers, forecasted EBITDA margins and the discount rate. The preliminary values for the trademark and the developed technology related assets were based on a relief-from-royalty method. The significant assumptions used to value these intangible assets included, among others, forecasted revenue growth rates, royalty rates and the expected obsolescence curve. The trademark, customer relationships and the developed technology related assets were assigned preliminary useful lives of 10.0 years, 10.0 years, and 6.1 years, respectively. As of December 31, 2021, the valuation of assets acquired and liabilities assumed is preliminary. The primary areas that remain preliminary relate to the fair values of unbilled receivables, intangible assets acquired, deferred revenue, legal and other contingencies as of the acquisition date, income and non-income based taxes and residual goodwill. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. NuPark Acquisition On December 13, 2021, the Company completed the acquisition of NuPark (“NuPark”), a provider of parking services and permit management which expanded the Company's presence in the United States in the Parking Solutions segment. The acquisition date fair value of the consideration transferred to NuPark was approximately $7.0 million, which consisted primarily of $5.0 million of cash paid at closing and $1.5 million of contingent consideration payable. The Company recorded $0.3 m illion of tangible assets, $4.9 million of customer relationships intangible assets valued using a multi-period excess earnings methodology, with a prelimina ry estimated useful life of 10.0 years, and $1.3 million of assumed liabilities which was primarily deferred revenue. Goodwill recorded was $3.2 million for future growth anticipated for the Company and is expected to be deductible for tax purposes. The fair values assigned to tangible and intangible assets acquired and liabilities assumed were preliminary estimates and the Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The Company has included the financial results of NuPark in the consolidated financial statements from the date of acquisition, which were not material. The transaction costs for the acquisition were not material. Pro Forma Financial Information (Unaudited) The pro forma information below gives effect to the Redflex and T2 systems acquisitions as if they had been completed on the first day of each period presented. Pro forma information for NuPark was not provided as it was not material. The pro forma results of operations are presented for information purposes only. As such, they are not necessarily indicative of the Company’s results had the Redflex and T2 systems acquisitions been completed on the first day of each period presented, nor do they intend to represent the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisitions and does not reflect additional revenue opportunities following the acquisition of Redflex and T2 Systems. The pro forma information includes adjustments to record the assets and liabilities associated with the Redflex and T2 Systems acquisitions at their respective preliminary fair values and to give effect to the financing of the acquisitions.
|  | For the Year Ended December 31, |
($ in thousands) |  | 2021 |  |  | 2020 |
Revenue |  | $ | 650,567 |  |  | $ | 530,807 |
Net income (loss) |  |  | 30,099 |  |  |  | (58,695 | )
The pro forma results primarily include adjustments related to amortization of intangibles, depreciation expense, interest expense and related debt extinguishment costs from the debt refinancing transactions and exclusion of acquisition-related costs and certain capitalized costs related to operating leases and developed technology.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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