Business Acquisitions

9 Months Ended

Sep. 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 nine months ended September 30, 2024, the Company recorded $20.7 million and $40.0 million, respectively, of incremental revenue from the businesses acquired during the nine months ended September 30, 2024. 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 nine months ended September 30, 2024, paying the purchase price in cash in each transaction: (a) a purchase of 100% of the equity interest in TDS Gift Cards (“TDS”), acquired on February 5, 2024, a digital gifting and branded payments platform, which is reported within our Digital Media segment; (b) a purchase of 100% of the equity interest in CNET Media, Inc. and certain related entities (“CNET”), acquired on September 12, 2024, a digital media publication platform, which is reported within our Digital Media segment; and (c) one other immaterial Digital Media acquisition. The acquisition of TDS 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 acquisition of CNET is expected to allow us to reach a wider audience that is attractive to advertisers in the technology space. Total consideration for all businesses acquired in 2024 was $358.2 million, or $212.3 million, net of cash acquired.

The following table summarizes the allocation of the preliminary purchase consideration for the acquisition of TDS and CNET as of September 30, 2024 (in thousands):


	Valuation
Assets and Liabilities	TDS (1)		CNET
Cash	$	142,957	$	—
Accounts receivable and other current assets (2)	171,290		21,930
Intangible assets	108,924		111,650
Goodwill (2)	80,835		24,930
Deferred tax asset, noncurrent (3)	—		7,355
Other assets	289		655
Accounts payable and other current liabilities	(290,266)		(3,841)
Deferred tax liability, noncurrent	(25,580)		—
Deferred revenue, noncurrent	—		(7,958)
Other noncurrent liabilities	(861)		—
Total	$	187,588	$	154,721

(1)During the three months ended September 30, 2024, we recorded a measurement period adjustment increasing goodwill by $0.3 million with a corresponding adjustment to current assets.

(2)The fair value of the assets acquired includes accounts receivable of $170.7 million for TDS and $21.2 million related to CNET, of which none is expected to be uncollectible. None of the goodwill recognized is expected to be deductible for income tax purposes.

(3)Deferred tax asset balance for CNET is presented within ‘Deferred income taxes’ on the Condensed Consolidated Balance Sheets.

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


	Gross Carrying Value		Weighted Average Estimated Life
Customer relationships	$	152,595	10 years
Trade names and trademarks	27,027		9 years
Other purchased intangibles	46,703		5 years
Total gross carrying value	$	226,325

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 September 30, 2024.

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

Unaudited Pro Forma Financial Information for the 2024 Acquisitions

The following unaudited pro forma information reflects the combined results from these acquisitions had they occurred on January 1, 2023. This 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, 2023. 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.


	Three months ended September 30,				Nine months ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues	$	370,719	$	378,343	$	1,050,666	$	1,075,400
Net loss	$	(51,585)	$	(34,772)	$	(15,451)	$	(46,950)
Loss per common share - Basic	$	(1.17)	$	(0.75)	$	(0.34)	$	(1.01)
Loss per common share - Diluted	$	(1.17)	$	(0.75)	$	(0.34)	$	(1.01)

2023 Acquisitions

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

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

Goodwill recognized associated with these acquisitions during the nine months ended September 30, 2023 was $6.3 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 nine months ended September 30, 2023.