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Acquisitions | 12 Months Ended
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Dec. 31, 2015
Business Combinations [Abstract] |
Acquisitions | Acquisitions DigiCore Holdings Limited (DBA Ctrack) On June 18, 2015, the Company entered into a transaction implementation agreement (the “TIA”) with DigiCore, who specializes in the research, development, manufacturing, sales and marketing of telematics tools used for fleet and mobile asset management solutions and user-based insurance applications. Ctrack’s products and services provide enterprise fleets, international businesses and consumers with solutions for maximizing the security and efficient operation of their global assets. Pursuant to the terms of the TIA, the Company agreed to acquire 100% of the issued and outstanding ordinary shares of DigiCore (with the exception of certain excluded shares, including treasury shares) for 4.40 South African Rand per ordinary share outstanding; provided that, the total cash consideration could not exceed 1,094,223,363.20 South African Rand (the “Maximum Consideration Amount”). The total cash purchase price was guaranteed, on behalf of the Company, by a registered South African bank. To obtain such guarantee, the Company placed the Maximum Consideration Amount, in South African Rand, into escrow with the South African bank. On October 5, 2015 the transaction closed. Upon consummation of the acquisition, Ctrack became an indirect wholly-owned subsidiary of the Company. From the date of execution of the TIA through the date the transaction closed, the Maximum Consideration Amount placed into escrow experienced a non-cash loss of $8.3 million due to the weakening of the South African Rand against the U.S. Dollar. This amount is included in non-cash change in acquisition-related escrow in the consolidated statement of operations. Upon the closing of the transaction, holders of unvested in-the-money DigiCore stock options received stock options to purchase shares of the Company’s common stock as replacement awards. During the year ended December 31, 2015, the Company incurred $1.7 million in costs and expenses related to the Company’s acquisition of Ctrack that are included in general and administrative expenses in the consolidated statements of operations. Purchase Price The total preliminary purchase price was approximately $80.0 million and included a cash payment for all of the outstanding ordinary shares of DigiCore and the purchase of in-the-money vested stock options held by Ctrack employees on the closing date of the transaction and the portion of the fair value of replacement equity awards issued to Ctrack employees that related to services performed prior to the date the transaction closed. Set forth below is supplemental purchase consideration information related to the Ctrack acquisition (in thousands):
|  | Year Ended December 31, 2015
Cash payments |  | $ | 79,365 |
Fair value of replacement equity awards issued to Ctrack employees for precombination services |  | 623 |
Total preliminary purchase price |  | $ | 79,988 |
Allocation of Fair Value The Company accounted for the transaction using the acquisition method and, accordingly, the consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date. Goodwill resulting from this acquisition is largely attributable to the experienced workforce of Ctrack and synergies expected to arise after the integration of Ctrack’s products and operations into those of the Company. Goodwill resulting from this acquisition is not deductible for tax purposes. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangible assets for developed technologies, customer relationships and trade names, which are being amortized using the straight-line method over their estimated useful lives, as well as indefinite-lived intangible assets. Liabilities assumed from DigiCore included a mortgage bond and capital lease obligations. The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands):
|  | October 5, 2015
Cash |  | $ | 2,437 |
Accounts receivable |  | 15,052 |
Inventory |  | 11,361 |
Property, plant and equipment |  | 5,924 |
Rental assets |  | 6,603 |
Intangible assets |  | 28,270 |
Goodwill |  | 29,273 |
Other assets |  | 5,695 |
Bank facilities |  | (2,124 | )
Accounts payable |  | (7,446 | )
Accrued and other liabilities |  | (15,018 | )
Noncontrolling interests |  | (39 | )
Net assets acquired |  | $ | 79,988 |
The above fair value allocation is considered preliminary and is subject to revision during the measurement period. Management is in the process of completing its evaluation of acquired intangible assets. Additionally, the Company is in the process of validating the fair values of inventory, accounts receivable and other assets, and obligations related to income tax and other liabilities. Valuation of Intangible Assets Acquired The following table sets forth the components of intangible assets acquired in connection with the Ctrack acquisition (dollars in thousands):
|  | Amount Assigned |  | Amortization Period (in years)
Definite-lived intangible assets: |  |  |  |
Developed technologies |  | $ | 10,170 |  |  | 6.0
Trade name |  | 14,030 |  |  | 10.0
Customer relationships |  | 4,070 |  |  | 5.0
Total intangible assets acquired |  | $ | 28,270 |  |  |
Actual Results of Ctrack Acquisition Ctrack’s net revenues and net loss following the October 5, 2015 date of acquisition are included in the Company’s operating results for the year ended December 31, 2015 and were $16.6 million and $2.3 million, respectively. R.E.R. Enterprises, Inc. (DBA Feeney Wireless) On March 27, 2015, the Company acquired all of the issued and outstanding shares of RER and its wholly-owned subsidiary and principal operating asset, FW, an Oregon limited liability company, which develops and sells solutions for the Internet of Things that integrate wireless communications into business processes. This strategic acquisition expanded the Company’s product and solutions offerings to include private labeled cellular routers, in-house designed and assembled cellular routers, high-end wireless surveillance systems, modems, computers and software, along with associated hardware, purchased from major industry suppliers. Additionally, FW’s services portfolio includes consulting, systems integration and device management services. During the year ended December 31, 2015, the Company incurred $0.9 million in costs and expenses related to the Company’s acquisition of FW that are included in general and administrative expenses in the unaudited condensed consolidated statement of operations. Purchase Price The total purchase price was approximately $24.8 million and included a cash payment at closing of approximately $9.3 million, $1.5 million of which was placed into an escrow fund to serve as partial security for the indemnification obligations of RER and its former shareholders, the Company’s assumption of $0.5 million in certain transaction-related expenses incurred by FW, and the future issuance of shares of the Company’s common stock valued at $15.0 million, payable no later than the tenth business day after the Company files this Annual Report on Form 10-K for the year ended December 31, 2015 with the SEC. The total purchase price of $24.8 million does not include amounts, if any, payable under an earn-out arrangement under which the Company may be required to pay up to an additional $25.0 million to the former shareholders of RER contingent upon FW’s achievement of certain financial targets for the years ending December 31, 2015, 2016 and 2017, which are payable in either cash or stock at the discretion of the Company over the next four years. Consideration due to the former shareholders of RER under the earn-out arrangement will be recorded as compensation expense during the service period earned. As of December 31, 2015, the amount earned under the earn-out arrangement was approximately $6.1 million, which is included in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheet. Set forth below is supplemental purchase consideration information related to the FW acquisition (in thousands):
|  | Year Ended December 31, 2015
Cash payments |  | $ | 9,268 |
Future issuance of common stock |  | 15,000 |
Other assumed liabilities |  | 509 |
Total purchase price |  | $ | 24,777 |
On January 5, 2016, the Company and RER amended certain payment terms related to the Company’s acquisition of RER. Under the amended agreement, the $1.5 million placed into escrow on the date of acquisition was released to RER and its former shareholders on January 8, 2016 and the $15.0 million in shares of the Company’s common stock that was payable in March 2016 will now be paid in five cash installments over a four-year period, beginning in March 2016. In addition, the earn-out arrangement that may have required the Company to pay up to an additional $25.0 million to the former shareholders of RER if FW achieved certain financial targets for the years ended December 31, 2015, 2016 and 2017 has been amended as follows: (a) any such earn-out amount earned for the achievement of certain financial targets for the year ended December 31, 2015 will now be paid in five cash installments over a four-year period, beginning in March 2016 and (b) in replacement of the potential earn-out contingent upon FW’s achievement of certain financial targets for the years ended December 31, 2016 and 2017 the Company will issue to the former shareholders of RER approximately 2.9 million shares of the Company’s common stock in three equal installments over a three-year period, beginning in March 2016, contingent upon the retainment of certain key personnel. Allocation of Fair Value The Company accounted for the transaction using the acquisition method and, accordingly, the consideration has been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date as set forth below. Goodwill resulting from this acquisition is largely attributable to the experienced workforce of FW and synergies expected to arise after the integration of FW’s products and operations into those of the Company. Goodwill resulting from this acquisition is deductible for tax purposes. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangible assets for developed technologies, customer relationships, and trademarks, which are being amortized using the straight-line method over their estimated useful lives, as well as indefinite-lived intangible assets, including in-process research and development. Liabilities assumed from FW included a term loan and capital lease obligations. The term loan and certain capital lease obligations were paid in full by the Company immediately following the closing of the acquisition on March 27, 2015. The fair value has been allocated based on the estimated fair values of assets acquired and liabilities assumed as follows (in thousands):
|  | March 27, 2015
Cash |  | $ | 205 |
Accounts receivable |  | 3,331 |
Inventory |  | 10,008 |
Property, plant and equipment |  | 535 |
Intangible assets |  | 18,880 |
Goodwill |  | 3,754 |
Other assets |  | 544 |
Accounts payable |  | (7,494 | )
Accrued and other liabilities |  | (1,721 | )
Deferred revenues |  | (270 | )
Note payable |  | (2,575 | )
Capital lease obligations |  | (420 | )
Net assets acquired |  | $ | 24,777 |
The above fair value allocation is considered preliminary and is subject to revision during the measurement period. Management is in the process of completing its evaluation of certain state tax liabilities. Valuation of Intangible Assets Acquired The following table sets forth the components of intangible assets acquired in connection with the FW acquisition (dollars in thousands):
|  | Amount Assigned |  | Amortization Period (in years)
Definite-lived intangible assets: |  |  |  |
Developed technologies |  | $ | 3,660 |  |  | 6.0
Trademarks |  | 4,700 |  |  | 10.0
Customer relationships |  | 8,500 |  |  | 10.0
Indefinite-lived intangible assets: |  |  |  |
In-process research and development |  | 2,020 |  |  |
Total intangible assets acquired |  | $ | 18,880 |  |  |
Actual Results of FW Acquisition FW’s net revenues and net loss following the March 27, 2015 date of acquisition are included in the Company’s operating results for the year ended December 31, 2015 and were $20.2 million and $8.3 million, respectively. Pro Forma Summary The unaudited consolidated pro forma results for the years ended December 31, 2015 and 2014 are set forth in the table below (in thousands). These pro forma consolidated results combine the results of operations of the Company, Ctrack and FW as though Ctrack and FW had been acquired as of January 1, 2014 and include amortization charges for the acquired intangibles for both acquisitions and interest expense related to the Company’s borrowings to finance the Ctrack acquisition. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2014.
| Year Ended December 31,
| 2015 |  | 2014
Net revenues | $ | 276,115 |  |  | $ | 291,247 |
Net loss | $ | (48,105 | ) |  | $ | (61,343 | )

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1497-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1490-128463 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1392-128463 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1486-128463 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4845-128472 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1500-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1524-128463 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4922-128472 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4934-128472 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=56956791&loc=d3e4926-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1383-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 + Details
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