Business Acquisitions

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expanding and diversifying its service offerings, enhancing its technology, and acquiring skilled personnel.

For the three and six months ended June 30, 2024, the Company recorded $12.3 million and $19.3 million of incremental revenue from the businesses acquired during the six months ended June 30, 2024 and 2023. Net income contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide.

2024 Acquisitions

The Company completed the following acquisitions during the six months ended June 30, 2024, paying the purchase price in cash in each transaction: (a) a purchase of 100% of the equity interest in TDS Gift Cards, acquired on February 5, 2024, a California-based digital gifting and branded payments platform, which is reported within our Digital Media segment; and (b) one other Digital Media acquisition.

The acquisition of TDS Gift Cards is expected to expand our ability to offer innovative shopping solutions to our merchant partners and broaden our capabilities to help facilitate commerce between consumers and some of the most highly visible brands. The other acquisition was completed in the second quarter of 2024 and is expected to provide access to new markets and expand the Company’s product lineup within the gaming and entertainment business. Total consideration for these transactions was $203.4 million, or $57.4 million, net of cash acquired.

The following table summarizes the allocation of the preliminary purchase consideration for the acquisition of TDS Gift Cards as of June 30, 2024 (in thousands):


Assets and Liabilities	Valuation (1)
Cash	$	142,957
Accounts receivable and other current assets (2)	171,440
Intangible assets	108,924
Goodwill (2)	80,577
Other assets	289
Accounts payable and other current liabilities	(290,266)
Deferred tax liability, noncurrent	(25,580)
Other noncurrent liabilities	(861)
Total	$	187,480

(1)During the three months ended June 30, 2024, we recorded a measurement period adjustment of $7.2 million primarily reducing goodwill and increasing customer relationships asset and other purchased intangibles.

(2)The fair value of the assets acquired includes accounts receivable of $170.8 million, of which none is expected to be uncollectible. None of the goodwill recognized is expected to be deductible for income tax purposes.

The preliminary amounts assigned to intangible assets by type for the acquisitions during the six months ended June 30, 2024 are summarized in the table below (in thousands):


	Gross Carrying Value		Weighted Average Estimated Life
Customer relationships	$	88,695	10 years
Trade names and trademarks	3,727		6 years
Other purchased intangibles	22,253		8 years
Total gross carrying value	$	114,675

The initial accounting for the 2024 acquisitions is incomplete due to the timing of available information and is subject to change. The Company has recorded provisional amounts for certain intangible assets as of June 30, 2024.

The Condensed Consolidated Statements of Operations since the date of each acquisition reflect the results of operations of the 2024 acquisitions since the date of the acquisition.

2023 Acquisitions

The Company completed two immaterial Digital Media acquisitions during the six months ended June 30, 2023, paying the purchase price in cash in each transaction.

The Condensed Consolidated Statements of Operations since the date of each acquisition reflect the results of operations of the 2023 acquisitions.

Goodwill recognized associated with these acquisitions during the six months ended June 30, 2023 was $6.6 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 these acquisitions during the six months ended June 30, 2023.