v2.3.0.11
Prior Year Acquisition
 6 Months Ended
Jun. 30, 2011
Prior Year Acquisition  
Prior Year Acquisition

3. PRIOR YEAR ACQUISITION

On November 30, 2010, we acquired U.K.-based Intec Telecom Systems PLC ("Intec") for $364.1 million, or $255.2 million net of $108.9 million of cash and cash equivalents Intec had on hand at the close of the transaction.

The application of the acquisition method of accounting for business combinations requires the use of significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for Intec (in thousands):

 

Trade accounts receivable

    $ 63,899   

Other current assets

      6,179   

Property and equipment

      9,968   

Acquired software

      19,184   

Acquired client contracts

     77,979   

Acquired other intangible assets

      6,395   

Goodwill

      91,400   

Net deferred income tax assets

      44,452   

Other non-current assets

      2,552   
  

 

 

  

Total assets acquired

      322,008   
  

 

 

  

Trade accounts payable

      3,611   

Accrued employee compensation

      17,517   

Deferred revenue

      26,311   

Other current liabilities

      9,620   

Non-current liabilities

      9,711   
  

 

 

  

Total liabilities assumed

      66,770   
  

 

 

  

Net assets acquired (excluding acquired cash)

    $ 255,238   
  

 

 

  

The $255.2 million of net assets acquired reflected above has not changed since March 31, 2011. However, we have made certain adjustments to our estimates of the fair value of various assets acquired and liabilities assumed, none of which required the revision of comparative information for periods presented in the accompanying Condensed Consolidated Financial Statements since the effects are not material. In addition, we have made certain adjustments to our estimates of deferred income taxes. As a result of these changes, during the second quarter of 2011, the amount allocated to goodwill increased by $1.7 million.

The above estimated fair values of assets acquired and liabilities assumed are still considered provisional, as we are waiting for additional information, primarily related to certain items within trade accounts receivable and deferred revenue, necessary to finalize those fair values, and to estimate the valuation allowances necessary for certain deferred income tax assets. Thus the provisional measurements of fair value set forth above are subject to change. Such changes could be significant. We expect to finalize the fair values and valuation allowances and complete the purchase price allocation as soon as practicable, but not later than one-year from the acquisition date.