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ACQUISITIONS | 9 Months Ended
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Sep. 30, 2023
ACQUISITIONS |
ACQUISITIONS | (3) ACQUISITIONS In accordance with ASC 805, the Company allocates the purchase price of its acquisitions to the tangible assets, liabilities and intangible assets acquired based on fair values. Any excess purchase price over those fair values is recorded as goodwill. The fair value assigned to intangible assets acquired is supported by valuations using estimates and assumptions provided by management. For certain large acquisitions, management engages an appraiser to assist in the valuation process. On March 15, 2022, the Company completed the acquisition of the Merchant Acquiring Business of Piraeus Bank ("PBMA"). The acquisition includes 205,000 POS terminals at 170,000 merchants throughout Greece, as well as Piraeus Bank’s online merchant acquiring business and expands Euronet’s omnichannel payments strategy where the Company uses its proprietary technology to provide cash, card-based acquiring solutions, alternative payment acquiring, online acquiring, tokenized payment services and other payment products. Additionally, the acquisition includes a long-term commercial framework agreement between Piraeus Bank and Euronet which includes collaborative product distribution, processing and customer referrals. The purchase price was €317.8 million, or approximately $350.6 million, which includes $331.0 million cash paid at closing, $4.4 million cash paid for surplus working capital and $15.2 million of estimated contingent consideration for a ten-year earn out contingent on performance targets outlined in the commercial framework agreement. The contingent consideration is related to a percentage of the net fee income received during the ten-year period of the commercial framework agreement and there is no contractual maximum amount of consideration under this agreement. The acquisition has been accounted for as a business combination in accordance with U.S. GAAP and the results of operations have been included from the date of acquisition in the EFT Processing Segment. The following table presents the final fair value that was allocated to PBMA's Euronet Merchant Services' (EMS) assets and liabilities based upon fair values as determined by the Company. The valuation process to determine the fair values is complete. For the year ended December 31, 2022, the Company made measurement period adjustments to reflect facts and circumstances in existence as of the effective time of the acquisition. These adjustments primarily included an adjustment to the accrued expenses and other current liabilities related to the surplus working capital of $4.4 million and some other immaterial adjustments.
(in millions) |  | As of March 15, 2022 |
Other current assets |  | $ | 1.8 |
Settlement assets |  |  | 77.6 |
Property and equipment |  |  | 5.7 |
Intangible assets |  |  | 122.5 |
Total assets acquired |  | $ | 207.6 |
Trade accounts payable |  | $ | (2.1 | )
Settlement liabilities |  |  | (65.9 | )
Accrued expenses and other current liabilities |  |  | (1.3 | )
Deferred revenue |  |  | (0.3 | )
Other long-term liabilities |  |  | (0.1 | )
Total liabilities assumed |  | $ | 69.7 |
Goodwill |  |  | 212.7 |
Net assets acquired |  | $ | 350.6 |
The fair value measurements of intangible assets were based on significant inputs not observable in the market and represent Level 3 measurements within the fair value hierarchy. Level 3 inputs include discount rates that would be used by a market participant in valuing these assets, projections of revenues and cash flows, and customer attrition rates, among others. The Company acquired a customer relationship intangible asset with a fair value of $112.2 million that is being amortized on a straight-line basis over 15 years and a contract related intangible asset of $10.3 million that is being amortized on a straight-line basis over 10 years. Goodwill, with a value of $212.7 million, arising from the acquisition was included in the EFT Processing Segment. The factors that make up goodwill include synergies from combining PBMA operations and intangible assets that do not qualify for separate recognition. Goodwill and intangible assets associated with this acquisition are deductible for tax purposes. The results of PBMA operations are included in the Company's consolidated results of operation, as part of the EFT Processing business segment, beginning on March 16, 2022. For the period beginning on the acquisition date through September 30, 2022, PBMA had $63.8 million in revenue. PBMA had $42.3 million and $98.5 million in revenue for the three and nine months ended September 30, 2023. The PBMA business is impacted by higher transaction volumes during the tourism season in the second and third quarters.

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