(4) Acquisitions

CDCBrasil, S.A.

On April 15, 2011, the Company completed its acquisition of 100% of the shares of CDC, Brazil's leading distributor of AIDC and POS solutions. This acquisition gives the Company an established presence in Latin America's largest specialty technology market and allows the Company to more easily scale its Latin American operations.

Under the Share Purchase and Sale Agreement, the Company structured the purchase transaction as an all cash share purchase with an initial payment of $36.2 million, net of cash acquired, and assumed working capital payables and debt at closing. The remaining purchase price will be paid in annual cash installments based upon the financial performance of CDC for the twelve month periods ended on June 30, from 2011 through 2015.

In the current quarter, the Company finalized the purchase accounting for the CDC acquisition. The Company has elected to record all purchase accounting adjustments in the current quarter as opposed to retrospective application set forth in ASC 805. We have determined that retrospective application is immaterial to the users of the Company's financial statements. The adjustments made during the quarter pertain to the finalization of the purchase price allocation to the fair value of customer relationships, pre-acquisition contingency liabilities and corresponding indemnification assets and deferred income taxes. These adjustments are summarized in the following table:


	As of April 15, 2011
	Preliminary Purchase Allocation			Purchase Accounting Adjustments			Revised Purchase Allocation
	*(in thousands)*
Consideration
Initial cash payment, net of cash acquired	$	36,228		$	—		$	36,228
Fair value of earnout obligation		23,952			—			23,952

Total consideration	$	60,180		$	—		$	60,180

Recognized amounts of identifiable assets acquired and liabilities assumed
Accounts receivable, net of allowance	$	21,378		$	—		$	21,378
Inventories		30,560			—			30,560
Prepaid expenses and other assets		3,575						3,575
Current deferred income taxes, net		1,409			(3,225	)		(1,816	)
Property and equipment, net		1,741			—			1,741
Intangible assets		18,327			4,278			22,605
Escrowed pre-acquisition contingencies receivable		16,013			7,977			23,990
Short-term borrowings		(1,277	)		—			(1,277	)
Accounts payable		(34,006	)		—			(34,006	)
Accrued expenses and other liabilities		(3,896	)		—			(3,896	)
Income taxes payable		(2,097	)		1,174			(923	)
Escrowed pre-acquisition contingencies payable		(16,013	)		(7,977	)		(23,990	)
Long-term deferred income taxes, net		—			(3,141	)		(3,141	)
Other long-term liabilities		(177	)		—			(177	)

Total identifiable net assets		35,537			(914	)		34,623

Goodwill	$	24,643		$	914		$	25,557

All adjustments above are as of the acquisition date.

In the current quarter, we recorded incremental amortization expense to catch up accumulated amortization for the additional purchase price allocated to customer relationships as of March 31, 2012. The impact of the incremental amortization and related tax effect are summarized below:


	Quarter ended March 31, 2012
	*(in thousands)*
Condensed consolidated income statement
Amortization expense	$	441
Provision for income taxes	$	(150	)

As of the March 31, 2012 condensed consolidated balance sheet, the Company reflected pre-acquisition contingencies related to the purchase of CDC at $4.3 million and $7.1 million in other current liabilities and other long-term liabilities, respectively. These recorded contingencies pertain to Brazilian tax exposures prior to the acquisition date. The Company also had indemnification assets in the same amounts recorded in prepaid expenses and other assets (current) and other assets (noncurrent), respectively. The amounts recorded for pre-acquisition contingencies have decreased from the prior quarter as the statute of limitations on a portion of the contingencies have lapsed. The amount of reasonably possible undiscounted pre-acquisition contingencies as of March 31, 2012, is estimated to range as high as $15.0 million at this time, of which all exposures identified are indemnifiable under the Share Purchase and Sale Agreement.