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Acquisitions | 12 Months Ended
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Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | ACQUISITIONS During the years ended September 30, 2023, 2022 and 2021 the Company acquired the following intangible assets and businesses: Residual Buyouts From time to time, the Company acquires future commission streams from sales agents in exchange for an upfront cash payment. This results in an increase in overall gross processing volume to the Company. The residual buyouts are treated as asset acquisitions, resulting in recording a residual buyout intangible asset at cost on the date of acquisition. These assets are amortized using a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are expected to be utilized over their estimated useful lives. During the years ended September 30, 2023, 2022 and 2021, the Company purchased $8,051, $52 and $1,819, respectively, in residual buyouts using a combination of cash on hand, loan forgiveness and borrowings on the Company's revolving credit facility. The acquired residual buyout intangible assets weighted average estimated amortization period of eight years. Referral Agreements From time to time, the Company enters into referral agreements with agent banks or other organizations (“referral partner”). Under these agreements, the referral partner refers its customers to the Company for credit card processing services. Total consideration paid for these agreements in the year ended September 30, 2023, was $420, all of which was settled with cash on hand. Because the Company pays an up-front fee to compensate the referral partner, the amount is treated as an asset acquisition in which the Company has acquired an intangible stream of referrals. This asset is amortized over a straight-line period of five years. 2023 Business Combinations Purchase of Celtic Cross Holdings, Inc. and Celtic Systems Pvt. Ltd. During the year ended September 30, 2023, the Company completed the acquisition of Celtic Cross Holdings, Inc., in Scottsdale, Arizona and Celtic Systems Pvt. Ltd. in Vadodara, India (collectively "Celtic") to expand the Company’s software offerings in the Public Sector vertical. Celtic is within the Software and Services segment. Total purchase consideration consisted of $85,000 in cash consideration, funded by proceeds from the Company's revolving credit facility. The goodwill associated with the Celtic acquisition is deductible for tax purposes. The acquired customer relationships intangible assets has an estimated amortization period of eighteen years. The trade name and non-compete agreements associated with the acquisition have amortization periods of five and three years, respectively. The weighted-average amortization period for all intangibles acquired is eighteen years. The acquired capitalized software has a weighted-average amortization period of ten years. Acquisition-related costs for this acquisition amounted to approximately $1,741 and were expensed as incurred. Summary of Celtic Cross Holdings, Inc. and Celtic Systems Pvt. Ltd. The fair values assigned to certain assets and liabilities assumed, as of the acquisition date, were as follows:
Accounts receivable | $ | 7,660 |
Prepaid expenses and other current assets | 103 |
Property and equipment | 5,437 |
Capitalized software | 12,600 |
Customer relationships | 33,800 |
Non-compete agreements | 200 |
Trade name | 600 |
Goodwill | 43,695 |
Total assets acquired | 104,095 |
Accounts payable | 9 |
Accrued expenses and other current liabilities | 3,182 |
Deferred revenue, current | 2,741 |
Other long-term liabilities | 13,162 |
Net assets acquired | $ | 85,001 |
Other Business Combinations during the year ended September 30, 2023 The Company completed the acquisition of two other businesses to expand the Company's software offerings. The total purchase consideration was $19,757, including $16,997 in cash consideration, funded by proceeds from the Company's revolving credit facility, $2,000 of the Company's Class A Common Stock, and $760 contingent consideration. In connection with these acquisitions, the Company allocated approximately $159 of the consideration to net working capital, approximately $374 to property and equipment, approximately $670 to capitalized software, approximately $8,400 to customer relationships, approximately $100 to trade names, and the remainder, approximately $12,229, to goodwill, of which $2,864 is deductible for tax purposes, and approximately $2,178 to other long-term liabilities. Certain of the purchase price allocations assigned for these acquisitions is considered preliminary as of September 30, 2023. The acquired capital software and customer relationships intangible assets have estimated amortization periods of seven to eight years and ten to fifteen years, respectively. Acquisition-related costs for these businesses amounted to approximately $317 and were expensed as incurred. Pro Forma Results of Operations for 2023 Business Combinations The following unaudited supplemental pro forma results of operations have been prepared as though each of the acquired businesses in the year ended September 30, 2023 had occurred on October 1, 2021. Pro forma adjustments were made to reflect the impact of depreciation and amortization, changes to executive compensation and the revised debt load, all in accordance with ASC 805. This supplemental pro forma information does not purport to be indicative of the results of operations that would have been attained had the acquisitions been made on these dates, or of results of operations that may occur in the future.
| Year ended September 30,
| 2023 |  | 2022
Revenue | $ | 371,613 |  |  | $ | 340,051 |
Net loss | $ | (2,696) |  |  | $ | (22,565) |
2022 Business Combinations During the year ended September 30, 2022, the Company completed the acquisitions of three businesses to expand the Company’s software offerings in the Public Sector and Healthcare vertical markets. Total purchase consideration was $107,681, including $101,400 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $6,281 of contingent consideration. The goodwill associated with two of the three acquisitions is deductible for tax purposes. The acquired customer relationships intangible assets have estimated amortization periods of between ten and nineteen years. The trade names have estimated weighted-average amortization periods of four years. The weighted-average amortization period for all intangibles acquired is fifteen years. The acquired capitalized software have amortization periods of seven years. Acquisition-related costs for these businesses amounted to approximately $773 and were expensed as incurred. Certain provisions in the purchase agreements provide for additional consideration of up to $23,000, in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreements, through no later than September 2024. The Company determined the acquisition date fair values of the liabilities for the contingent consideration based on probability forecasts and discounted cash flow analyses. In each subsequent reporting period, the Company will reassess its current estimates of performance relative to the targets and adjust the contingent liabilities to their fair values through earnings. See additional disclosures in Note 13. Summary of 2022 Business Combinations The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2022 were as follows:
Accounts receivable | $ | 651 |
Settlement assets | 685 |
Prepaid expenses and other current assets | 83 |
Property and equipment | 190 |
Capitalized software | 9,790 |
Acquired customer relationships | 41,090 |
Trade name | 1,550 |
Goodwill | 61,347 |
Operating lease right-of-use assets | 263 |
Other assets | 22 |
Total assets acquired | 115,671 |
Accrued expenses and other current liabilities | 287 |
Settlement obligations | 685 |
Deferred revenue, current | 30 |
Current portion of operating lease liabilities | 82 |
Operating lease liabilities, less current portion | 181 |
Other long-term liabilities | 6,725 |
Net assets acquired | $ | 107,681 |
2021 Business Combinations During the year ended September 30, 2021, the Company completed the acquisitions of eight unrelated businesses, including Business Information Systems, Inc., ImageSoft Inc., and six other collectively material businesses. Purchase of Business Information Systems, Inc. On February 1, 2021, the Company completed the acquisition of substantially all of the assets of Business Information Systems, GP, a Tennessee general partnership and Business Information Systems, Inc., a Tennessee corporation (collectively “BIS”) to expand its software offerings, primarily in the Public Sector vertical. BIS is within the Software and Services segment. Total purchase consideration was $95,495, including $52,500 in cash on hand and proceeds from the Company's revolving credit facility, 1,202,914 shares of the Company's Class A Common Stock (valued at $35,245), and $7,750 in contingent consideration. The goodwill associated with the acquisition is deductible for tax purposes. The acquired customer relationships intangible asset has an estimated amortization period of nineteen years. The non-compete agreement and trade name have estimated amortization periods of three and five years, respectively. The weighted-average estimated amortization period of all intangibles acquired is nineteen years. The acquired capitalized software has an estimated amortization period of ten years. Acquisition-related costs for BIS amounted to approximately $374 and were expensed as incurred. Certain provisions in the purchase agreement provide for additional consideration of up to $16,000 in the aggregate, to be paid based upon achievement of specified financial performance targets, as defined in the purchase agreement, in the 24 months from February 1, 2021 through January 31, 2023. The Company determined the acquisition date fair value of the liability for the contingent consideration based on a probability forecast and discounted cash flow analysis. In each subsequent reporting period, the Company will reassess the current estimates of performance relative to the targets and adjust the contingent liability to its fair value through earnings. See additional disclosures in Note 13. Purchase of ImageSoft, Inc. On November 17, 2020, the Company completed the acquisition of substantially all of the assets of ImageSoft, Inc. (“ImageSoft”) to expand its software offerings, primarily in the Public Sector vertical. ImageSoft, is within the Software and Services segment. Total purchase consideration was $46,300, including $40,000 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $6,300 in contingent consideration. The goodwill associated with the acquisition is deductible for tax purposes. The acquired customer relationships intangible asset has an estimated amortization period of twenty years. The non-compete agreement and trade name have estimated amortization periods of three and five years, respectively. The weighted-average estimated amortization period of all intangibles acquired is nineteen years. The acquired capitalized software has an estimated amortization period of seven years. Acquisition-related costs for ImageSoft amounted to approximately $403 and were expensed as incurred. Certain provisions in the purchase agreement provide for additional consideration of up to $20,000 in the aggregate, to be paid based upon achievement of specified financial performance targets, as defined in the purchase agreement, in the 24 months from May 1, 2021 through April 30, 2023. The Company determined the acquisition date fair value of the liability for the contingent consideration based on a probability forecast and discounted cash flow analysis. In each subsequent reporting period, the Company will reassess the current estimates of performance relative to the targets and adjust the contingent liability to its fair value through earnings. See additional disclosures in Note 13. Other Business Combinations From October 1, 2020 to September 30, 2021, the Company completed the acquisitions of six other businesses to expand the Company’s software offerings in the Public Sector and Healthcare vertical markets and to add proprietary technology that will augment the Company’s existing platform across several verticals. Five of these businesses are within the Software and Services segment and one is within the Merchant Services segment. Total purchase consideration was $65,527, including $57,000 in cash consideration, funded by proceeds from the Company's revolving credit facility, and $8,527 of contingent consideration. For each of these businesses acquired, the goodwill associated with the acquisition is deductible for tax purposes. The acquired customer relationships intangible assets have estimated amortization periods of between ten and twenty-five years. The non-compete agreement and trade names have weighted average estimated amortization periods of four years. The weighted-average amortization period for all intangibles acquired is sixteen years. The acquired capitalized software has a weighted-average amortization period of seven years. Acquisition-related costs for these businesses amounted to approximately $1,110 and were expensed as incurred. Certain provisions in the purchase agreements provide for additional consideration of up to $50,200, in the aggregate, to be paid based upon the achievement of specified financial performance targets, as defined in the purchase agreements, through no later than June 2023. The Company determined the acquisition date fair values of the liabilities for the contingent consideration based on probability forecasts and discounted cash flow analyses. In each subsequent reporting period, the Company will reassess its current estimates of performance relative to the targets and adjust the contingent liabilities to their fair values through earnings. See additional disclosures in Note 13. Summary of 2021 Business Combinations The fair values assigned to certain assets and liabilities assumed, as of the acquisition dates, during the year ended September 30, 2021 were as follows:
| BIS |  | ImageSoft, Inc. |  | Other |  | Total
Accounts receivable | $ | 1,567 |  |  | $ | 4,997 |  |  | $ | 3,141 |  |  | $ | 9,705 |
Settlement assets | 6,889 |  |  | 120 |  |  | — |  |  | 7,009 |
Inventories | 458 |  |  | — |  |  | 161 |  |  | 619 |
Prepaid expenses and other current assets | 10 |  |  | 2,897 |  |  | 2,043 |  |  | 4,950 |
Property and equipment | 206 |  |  | 433 |  |  | 312 |  |  | 951 |
Capitalized software | 15,200 |  |  | 5,200 |  |  | 4,100 |  |  | 24,500 |
Acquired customer relationships | 32,300 |  |  | 16,300 |  |  | 24,040 |  |  | 72,640 |
Non-compete agreements | 100 |  |  | 610 |  |  | 390 |  |  | 1,100 |
Trade name | 700 |  |  | 1,100 |  |  | 840 |  |  | 2,640 |
Goodwill | 46,660 |  |  | 22,408 |  |  | 35,955 |  |  | 105,023 |
Operating lease right-of-use assets | — |  |  | 332 |  |  | 484 |  |  | 816 |
Other assets | — |  |  | 6 |  |  | 32 |  |  | 38 |
Total assets acquired | 104,090 |  |  | 54,403 |  |  | 71,498 |  |  | 229,991 |
Accrued expenses and other current liabilities | 138 |  |  | 910 |  |  | 1 |  |  | 1,049 |
Settlement obligations | 6,889 |  |  | 120 |  |  | — |  |  | 7,009 |
Deferred revenue, current | 1,568 |  |  | 6,748 |  |  | 5,498 |  |  | 13,814 |
Current portion of operating lease liabilities | — |  |  | 75 |  |  | 221 |  |  | 296 |
Operating lease liabilities, less current portion | — |  |  | 250 |  |  | 251 |  |  | 501 |
Net assets acquired | $ | 95,495 |  |  | $ | 46,300 |  |  | $ | 65,527 |  |  | $ | 207,322 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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