XML 31 R14.htm IDEA: XBRL DOCUMENT
v3.24.0.1

ACQUISITION AND DIVESTITURES | 12 Months Ended
--- | ---
Dec. 31, 2023
Business Combinations [Abstract] |
ACQUISITION AND DIVESTITURES | Acquisition On June 1, 2021, we acquired all of the equity of First American Payment Systems, L.P. ("First American") in a cash transaction for $958,514, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired. First American is a large-scale payments technology company that provides partners and merchants with comprehensive in-store, online and mobile payment solutions. The transaction was funded by our revolving credit facility and additional debt we issued in June 2021 (Note 13). The acquisition resulted in goodwill, which is non-deductible for tax purposes, as First American provides an end-to-end payments technology platform that provides significant leverage to accelerate organic growth. Transaction costs related to the acquisition totaled $18,913 in 2021. The goodwill and results of operations of First American from the date of acquisition are included in the Payments segment. Information regarding goodwill by reportable business segment and the useful lives of acquired intangibles can be found in Note 3. Information regarding the calculation of the estimated fair values of the acquired intangibles can be found in Note 8. Operating results for First American for the years ended December 31 were as follows:
(in thousands) |  |  | 2023 |  | 2022 |  | 2021
Revenue |  |  | $ | 364,232 |  |  | $ | 347,709 |  |  | $ | 194,976 |
Net income attributable to Deluxe |  |  | 14,266 |  |  | 5,794 |  |  | 1,806 |
The above results for the year ended December 31, 2022 include restructuring and integration expense of $5,452. Pro forma financial information (unaudited) – The following unaudited pro forma financial information summarizes our consolidated results of operations for the year ended December 31, 2021 as though the acquisition occurred on January 1, 2020:
(in thousands) |  | 2021
Revenue |  | $ | 2,156,313 |
Net income attributable to Deluxe |  | 74,843 |
The unaudited pro forma financial information was prepared in accordance with the accounting policies described in Note 1. The pro forma information includes adjustments to reflect the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from January 1, 2020. The pro forma information also includes adjustments to reflect the additional interest expense on the debt we issued to fund the acquisition (Note 13), and the acquisition transaction costs we incurred during 2021 are excluded. This pro forma financial information is for informational purposes only. It does not reflect the integration of the businesses or any synergies that resulted from the acquisition. As such, it is not indicative of the results of operations that would have been achieved had the acquisition been consummated on January 1, 2020. In addition, the pro forma amounts are not indicative of future operating results. Divestitures / Business Exits During the past 2 years, we have exited certain of our businesses and facilities, allowing us to focus our resources on the key growth areas of payments and data, while allowing us to optimize our operations. 2023 divestiture / business exits – In June 2023, we completed the sale of our North American web hosting and logo design businesses for net cash proceeds of $31,230, and we recognized a pretax gain of $17,486. These businesses generated annual revenue of approximately $66,000 during 2022, primarily in our Data Solutions segment. The assets and liabilities sold were not material to our consolidated balance sheet. In September and December 2023, we executed agreements allowing for the conversion of our U.S. and Canadian payroll and human resources services customers to other service providers. During 2023, we received initial cash consideration of $15,669 under these agreements, which is included in proceeds from sale of businesses and long-lived assets on the consolidated statement of cash flows. We recognized related income of $10,700 during the fourth quarter of 2023, which is included in gain on sale of businesses and long-lived assets on the consolidated statement of income. Recognition of the remaining income will be based on actual customer conversion and retention activity, which we expect will be completed during 2024. These businesses generated annual revenue of approximately $27,000 in the Payments segment during 2023. Our U.S. and Canadian payroll and human resources businesses comprise a reporting unit that had a goodwill balance of $7,743 as of December 31, 2023. We evaluated this goodwill for impairment as of December 31, 2023, and, based on our quantitative analysis, we concluded that it was not impaired as of that date. In conjunction with our phased transition out of these businesses, we expect that this goodwill will be fully impaired in 2024, at the point when the remaining cash flows generated by these businesses in 2024 no longer support the carrying value of the reporting unit. 2023 facility sales – During the fourth quarter of 2023, we sold 2 facilities for net cash proceeds of $8,094, and we recognized a pretax gain of $3,792. 2022 divestitures – In May 2022, we completed the sale of our Australian web hosting business for net cash proceeds of $17,620, and we recognized a pretax gain of $15,166.This business generated annual revenue in our Data Solutions segment of $23,766 during 2021. The assets and liabilities sold were not material to our consolidated balance sheet. During 2022, we also sold the assets of our Promotional Solutions strategic sourcing and retail packaging businesses. These businesses generated annual revenue of approximately $29,000 during 2021. Neither the gain on these sales nor the assets and liabilities sold were material to our consolidated financial statements. 2022 facility sale – In May 2022, we sold a facility for net cash proceeds of $6,929, and we recognized a pretax gain of $2,361.

X
- 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
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration