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Business Acquisitions | 12 Months Ended
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Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Business Acquisitions | Business Acquisitions The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, and acquire skilled personnel. 2023 Acquisitions The Company completed two immaterial acquisitions during the year ended December 31, 2023, paying the purchase price in cash in each transaction. The Consolidated Statement of Operations since the date of each acquisition and the balance sheet as of December 31, 2023, reflect the results of operations of all 2023 acquisitions. Goodwill recognized associated with these acquisitions during the year ended December 31, 2023 was $6.5 million, all of which is expected to be deductible for income tax purposes. Approximately $7.2 million of definite-lived intangibles were recorded in connection with the acquisitions during the year ended December 31, 2023. During the year ended December 31, 2023, the Company recorded adjustments to the initial working capital and to the purchase accounting of certain prior period acquisitions due to the finalization of prior period acquisitions in the Digital Media business which resulted in a net decrease in goodwill of $0.1 million. 2022 Acquisitions The Company completed the following acquisitions during the year ended December 31, 2022, paying the purchase price in cash in each transaction: (a) a purchase of 100% of equity interests of Lifecycle Marketing Group Limited, acquired on January 21, 2022, a United Kingdom-based portfolio of pregnancy and parenting brands, including Emma’s Diary and Health Professional Academy, reported within our Digital Media segment; (b) a purchase of 100% of equity interests of FitNow, Inc., acquired on June 2, 2022, a Massachusetts-based provider of weight loss products and support, reported within our Digital Media segment; and (c) four other immaterial Digital Media acquisitions. The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2022, reflect the results of operations of all 2022 acquisitions. For the year ended December 31, 2022, these acquisitions contributed $33.0 million to the Company’s revenues. Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide. Total consideration for these transactions was $121.7 million, net of cash acquired and assumed liabilities. The following table summarizes the allocation of the preliminary purchase consideration for all 2022 acquisitions as of December 31, 2022 (in thousands):
Assets and Liabilities | Valuation
Accounts receivable | $ | 7,433 |
Prepaid expenses and other current assets | 4,915 |
Property and equipment | 369 |
Operating lease right-of-use assets, noncurrent | 545 |
Trade names | 12,839 |
Customer relationships | 20,040 |
Goodwill | 95,737 |
Other intangibles | 18,166 |
Other long-term assets | 11 |
Accounts payable and accrued expenses | (6,221) |
Deferred revenue | (21,474) |
Deferred tax liability | (10,140) |
Other long-term liabilities | (516) |
Total | $ | 121,704 |
The fair value of the assets acquired includes accounts receivable of $7.4 million, all of which was expected to be collectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill recognized associated with these acquisitions during the year ended December 31, 2022 is $95.7 million, of which $1.2 million is expected to be deductible for income tax purposes. During the year ended December 31, 2022, the purchase price accounting was finalized for the following 2021 acquisitions: DailyOM, SEOmoz, Solutelia, LLC, Arthur L. Davis Publishing and four other immaterial Digital Media and Cybersecurity and Martech acquired business. During the year ended December 31, 2022, the Company recorded adjustments to the initial working capital and to the purchase accounting of prior period acquisitions due to the finalization of certain prior period acquisitions in the Digital Media business. These measurement period adjustments resulted in a net increase in goodwill of $4.5 million, which included a $3.2 million increase in connection with the unfavorable contract liability for an acquired contract. The unfavorable contract liability was expected to be accreted over 3 years as of December 31, 2022. In addition, the Company recorded adjustments to the initial working capital and to the purchase accounting of certain prior period acquisitions in the Cybersecurity and Martech businesses which resulted in a net decrease in goodwill of $0.1 million. Such adjustments had an immaterial impact on the amortization expense within the Consolidated Statements of Operations for the year ended December 31, 2022. Refer to Note 9 — Goodwill and Intangible Assets for additional information. Unaudited Pro Forma Financial Information for All 2022 Acquisitions The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2021. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2022 acquisitions as if each acquisition had occurred on January 1, 2021 (in thousands, except per share amounts):
| Year ended December 31,
| 2022 |  | 2021
| (unaudited)
Revenues | $ | 1,407,300 |  |  | $ | 1,461,178 |
Net income from continuing operations | $ | 64,877 |  |  | $ | 398,201 |
Income per common share from continuing operations - Basic | $ | 1.38 |  |  | $ | 8.67 |
Income per common share from continuing operations - Diluted | $ | 1.38 |  |  | $ | 8.31 |
2021 Acquisitions The Company completed the following acquisitions during the year ended December 31, 2021, paying the purchase price in cash in each transaction: (a) an asset purchase of DailyOM, acquired on April 30, 2021, a California-based provider of health and wellness digital media, content, and learning business; (b) a share purchase of SEOmoz, acquired on June 4, 2021, a Seattle-based provider of search engine optimization (“SEO”) solutions; (c) an asset purchase of Solutelia, LLC, acquired on July 15, 2021, a Colorado-based on-demand wireless telecommunications network monitoring and analysis, testing and optimization software business and related wireless telecommunications engineering services business; (d) a stock purchase of Arthur L. Davis Publishing, acquired on September 23, 2021, an Iowa-based digital nursing publication; (e) a stock purchase of Root Wireless, Inc. acquired on December 13, 2021, a Washington-based mobile analytics firm; and (f) four other immaterial Digital Media acquisitions. The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2021, reflect the results of operations of all 2021 acquisitions. For the year ended December 31, 2021, these acquisitions contributed $39.9 million to the Company’s revenues. Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide. Total consideration for these transactions was $160.4 million, net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid. The following table summarizes the allocation of the purchase consideration for all 2021 acquisitions as of December 31, 2021, including individually material acquisitions noted separately (in thousands):
Assets and Liabilities | Valuation
Accounts receivable | $ | 9,513 |
Prepaid expenses and other current assets | 1,655 |
Property and equipment | 2,188 |
Operating lease right-of-use assets, noncurrent | 5,888 |
Trade names | 16,349 |
Customer relationships | 21,945 |
Goodwill | 97,032
Other intangibles | 38,894 |
Other long-term assets | 62 |
Deferred tax asset | 230 |
Accounts payable and accrued expenses | (5,863) |
Deferred revenue | (9,491) |
Operating lease liabilities, current | (7,191) |
Other current liabilities | (14) |
Deferred tax liability | (9,237) |
Other long-term liabilities | (1,511) |
Total | $ | 160,449 |
The fair value of the assets acquired includes accounts receivable of $9.5 million. The gross amount due under contracts is $9.9 million, of which $0.4 million was expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill recognized associated with these acquisitions during the year ended December 31, 2021 is $97.0 million, of which $42.1 million is expected to be deductible for income tax purposes. Unaudited Pro Forma Financial Information for All 2021 Acquisitions The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2020. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2021 acquisitions as if each acquisition had occurred on January 1, 2021 (in thousands, except per share amounts):
| Year ended
| December 31, 2021 |  |
| (unaudited)
Revenues | $ | 1,482,323 |  |  |
Net income from continuing operations | $ | 416,348 |  |  |
Income per common share from continuing operations - Basic | $ | 9.06 |  |  |
Income per common share from continuing operations - Diluted | $ | 8.69 |  |  |
SEOmoz Acquisition On June 4, 2021, the Company acquired all the outstanding issued capital of SEOmoz at a purchase consideration of $67.0 million, net of cash acquired and assumed liabilities. SEOmoz is a provider of search engine optimization (“SEO”) solutions. The Consolidated Statement of Operations since the date of acquisition and balance sheet as of December 31, 2021, reflect the results of operations of SEOmoz. For the year ended December 31, 2021, SEOmoz contributed $25.6 million to the Company’s revenues. Net income from continuing operations contributed by SEOmoz since the acquisition date was not separately identifiable due to the Company’s integration activities and is impracticable to provide. The following table summarizes the allocation of the purchase consideration for the SEOmoz acquisition (in thousands):
Assets and Liabilities | Valuation
Accounts receivable | $ | 3,278 |
Prepaid expenses and other current assets | 1,547 |
Property and equipment | 1,845 |
Operating lease right of use asset | 5,888 |
Trade names | 7,406 |
Customer relationships | 5,000 |
Goodwill | 41,329 |
Other intangibles | 22,777 |
Other long-term assets | 62 |
Accounts payables and accrued expenses | (2,655) |
Other current liabilities | (14) |
Deferred revenue | (6,398) |
Operating lease liabilities, current | (7,191) |
Deferred tax liability | (5,327) |
Other long-term liabilities | (550) |
Total | $ | 66,997 |
The fair value of the assets acquired includes accounts receivable of $3.3 million. The gross amount due under contracts is $3.6 million, of which $0.3 million was expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill recognized in connection with this acquisition during the year ended December 31, 2021 is $41.3 million of which zero is expected to be deductible for income tax purposes. Unaudited Pro Forma Financial Information for SEOmoz Acquisition The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired business been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from this business acquisition had it occurred on January 1, 2021. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the SEOmoz acquisition, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and SEOmoz as if the acquisition had occurred on January 1, 2021 (in thousands, except per share amounts):
| Year ended
| December 31, 2021 |  |
| (unaudited)
Revenues | $ | 1,438,099 |  |  |
Net income from continuing operations | $ | 406,281 |  |  |
Income per common share from continuing operations - Basic | $ | 8.84 |  |  |
Income per common share from continuing operations - Diluted | $ | 8.48 |  |  |
Deferred Acquisition Payments As of December 31, 2023, future payments associated with contractual obligations for holdback payments in connection with all business acquisitions are as follows (in thousands):
Fiscal Year: |
2024 | $ | 12,483 |
2025 | 212 |
| $ | 12,695 |

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