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Business Combination
 6 Months Ended
Jun. 30, 2015
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
Business Combinations

PROS France SAS (formerly Cameleon Software SA)

In October 2013, the Company entered into a tender offer agreement with Cameleon Software SA (now PROS France, and referred to in this subsection 3 as "Cameleon"), indicating the Company's intent to acquire that company through the tender offer for all of its outstanding share capital in an all-cash tender offer. In January 2014, the Company announced that the initial tender offer for Cameleon was successful and upon completion of the initial tender offer, the Company controlled 81.7% of Cameleon's common stock and 94.0% of Cameleon's outstanding warrants, inclusive of the commitments from Cameleon's management regarding their free shares. As a result of shares purchased by the Company in the market following the completion of the initial tender, the exercise of warrants in July 2014, and the completion of a second tender in November 2014, the Company now controls 100.0% of Cameleon's common stock. The Company acquired Cameleon for total cash consideration of approximately $32 million, net of cash acquired.
    
During the three and six months ended June 30, 2015, the Company incurred no acquisition-related costs. During the three and six months ended June 30, 2014, the Company incurred $0.3 million and $1.0 million , respectively, consisting primarily of the cost for the retention of key employees, advisory and legal fees.

All of the assets acquired and the liabilities assumed in the transaction have been recognized at their acquisition date fair values at January 8, 2014.
    
The final allocation of the purchase price for Cameleon is as follows (in thousands):
Cash and cash equivalents
$
7,086

Accounts receivables
10,395

Prepaid and other assets
1,418

Intangible assets
18,653

Goodwill
15,717

Accounts payable and accrued liabilities
(12,539
)
Deferred revenue
(5,392
)
Non-controlling interest
(6,204
)
Net assets acquired
$
29,134



The following are the identifiable intangible assets acquired (in thousands) and their respective useful lives:
 

 
Useful Life
 
Amount
 
(years)
Trade Name
$
1,020

 
8
Customer Relationships
1,455

 
2-5
Maintenance Relationships
3,808

 
8
Developed Technology
11,147

 
7
Other
1,223

 
2
Total
$
18,653

 
 


In performing the purchase price allocation, the Company considered, among other factors, its anticipated future use of the acquired assets, analysis of historical financial performance, and estimates of future cash flows from Cameleon's products and services. The allocation resulted in acquired intangible assets of $18.7 million. The acquired intangible assets consisted of developed technology, customer and maintenance relationships, a trade name and other intangible assets and were valued using the income approach in which the after-tax cash flows are discounted to present value. The cash flows are based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model as well as the weighted average cost of capital. Additionally, the Company assumed certain liabilities in the acquisition, including deferred revenue to which a fair value of $5.4 million was ascribed using a cost-plus profit approach.

Liabilities assumed include $2.7 million related to the Company's offer to pay an additional €0.15 per share cash premium to the Cameleon stock and warrant holders tendering their shares and warrants in the initial tender offer if the Company acquired at least 95% of the share capital and voting rights of Cameleon on a fully diluted basis on or before December 31, 2014. The Company recorded this liability at fair value as the Company expected to meet this threshold prior to December 31, 2014 and ultimately settled the contingent liability related to the share premium in December 2014 for $2.2 million. In addition, the net assets acquired include contingent consideration of $1.4 million related to the committed purchase of free shares owned by Cameleon management.

Goodwill of $15.7 million represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets, and represents the expected synergistic benefits of the transaction, the knowledge and experience of Cameleon's workforce in place, and the expectation that the combined company's complementary products will significantly broaden the Company's CPQ solution offering. The Company believes the combined company will benefit from a broader global presence and, with the Company's direct sales force and larger channel coverage, significant cross selling opportunities. Goodwill of $5.8 million is expected to be currently deductible for tax purposes. In accordance with GAAP, goodwill will not be amortized but instead is tested for impairment at least annually, or, more frequently if certain indicators are present. In the event that the management of the combined company determines that the value of goodwill has become impaired, the combined company will incur an accounting charge for the amount of the impairment during the fiscal quarter in which the determination is made.
    
SignalDemand, Inc.

In December 2013, the Company acquired SignalDemand, Inc. ("SignalDemand") for total cash consideration of $13.5 million. All of the assets acquired and the liabilities assumed in the transaction were recognized at their acquisition date fair values at December 16, 2013, which included $7.2 million of goodwill.
    
Pro Forma Financial Information

The unaudited financial information in the table below summarizes the combined results of operations of the Company and Cameleon, on a pro forma basis, as though the Company had acquired Cameleon on January 1, 2013. The pro forma information for all periods presented also includes the effect of business combination accounting resulting from the acquisition, including amortization charges from acquired intangible assets.
 
Three months ended June 30,
 
Six months ended June 30,
(in thousands, except earnings per share)
2014
 
2014
Total revenue
$
44,368

 
$
85,533

Net loss attributable to PROS Holdings, Inc.
(6,996
)
 
(15,583
)
Earnings per share - basic and diluted
$
(0.24
)
 
$
(0.54
)