XML 22 R10.htm IDEA: XBRL DOCUMENT
v3.22.1

ACQUISITIONS | 3 Months Ended
--- | ---
Mar. 31, 2022
ACQUISITIONS [ABSTRACT] |
ACQUISITIONS | (2)ACQUISITIONS AND DIVESTITURES Avtex On April 8, 2021, the Company acquired, through its subsidiary TTEC Digital, LLC, 100% of the outstanding stock of Avtex Solutions Holdings, LLC (“Avtex”). Avtex is an end-to-end customer experience and CXaaS solutions provider with offerings in Genesys and Microsoft cloud solutions. The business is operated as part of the TTEC Digital segment and is being fully consolidated into the financial statements of TTEC. Total cash paid at acquisition was $499.946 million ($490.0 million base purchase price plus cash, less debt and working capital estimate). The Avtex transaction is subject to customary representations and warranties, holdbacks, and a net working capital adjustment. The Company used cash from operations and drew down on its Credit Facility to fund the acquisition. The Company finalized the net working capital adjustment for $0.1 million during the third quarter of 2021 which was paid by Avtex to the Company in the third quarter of 2021. During the fourth quarter of 2021, TTEC implemented ASU 2021-08 which required an accounting modification to the deferred revenue balance as of the acquisition date (see discussion above in Note 1). The deferred revenue balance was evaluated as if TTEC had been the company securing the initial contract and accounted for these contracts in accordance with ASC 606. Based on this re-assessment, the $4.9 million reduction initially recorded to deferred revenue in connection with the purchase price accounting was eliminated and an offsetting increase to Goodwill was recorded as of the acquisition date. In connection with this modification, revenue of $3.4 million was recorded in the fourth quarter of 2021 related to deferred revenue from the second and third quarters of 2021. A multi-period excess earnings method under the income approach was used to estimate the fair value of the customer relationships intangible asset. The significant assumptions utilized in calculating the fair value of the customer relationships intangible asset were the customer attrition rate, revenue growth rates, forecasted EBITDA, contributory asset charge, and the discount rate. The following summarizes the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):
​ | ​ | ​ | ​ | ​
​ | ​ | Acquisition Date |
​ | ​ | Fair Value |
Cash | ​ | $ | 18,638 | ​
Accounts receivable, net | ​ |  | 22,214 | ​
Prepaid expenses | ​ |  | 26,389 | ​
Current income tax receivables | ​ |  | 93 | ​
Net fixed assets | ​ | ​ | 3,162 | ​
Right of use assets | ​ | ​ | 3,614 | ​
Other Assets | ​ | ​ | 480 | ​
Tradename | ​ | ​ | 5,300 | ​
Intellectual property intangible | ​ | ​ | 770 | ​
Customer relationships | ​ |  | 128,200 | ​
Goodwill | ​ | ​ | 378,882 | ​
​ | ​ | $ | 587,742 | ​
​ | ​ | ​ | ​ | ​
Accounts payable | ​ | $ | 20,580 | ​
Accrued employee compensation | ​ |  | 4,325 | ​
Accrued expenses | ​ |  | 250 | ​
Right of use liability - current | ​ | ​ | 678 | ​
Deferred revenue | ​ | ​ | 56,765 | ​
Accrued income taxes | ​ | ​ | 332 | ​
Deferred tax liability | ​ | ​ | 1,930 | ​
Right of use liability - noncurrent | ​ |  | 2,936 | ​
​ | ​ | $ | 87,796 | ​
​ | ​ | ​ | ​ | ​
Total purchase price | ​ | $ | 499,946 | ​
​ In the first quarter of 2022, the Company finalized the valuation of Avtex for the acquisition date assets acquired and liabilities assumed and determined that no material adjustments to any of the balances were required. The Avtex customer relationships, intellectual property intangible, and tradename are being amortized over useful lives of 9, 3, and 1 years, respectively. The goodwill recognized from the Avtex acquisition is attributable, but not limited to, the acquired workforce and expected synergies with the TTEC Digital segment. The tax basis of the acquired intangibles and goodwill will be materially deductible for income tax purposes. The acquired goodwill and intangibles and operating results of Avtex are reported within the TTEC Digital segment from the date of acquisition. Financial Impact of Acquired Businesses The acquired business purchased in 2021 noted above contributed revenues of $53.4 million and net income $2.8 million, to the Company for the quarter ended March 31, 2022. The unaudited proforma financial results for the three months ended March 31, 2021, combines the consolidated results of the Company and Avtex assuming the acquisition had been completed on January 1, 2020. The reported revenue and net income of $539.2 million and $50.4 million would have been $586.2 million and $53.6 million for the three months ended March 31, 2021, respectively, on an unaudited proforma basis. The Company did not have any material, nonrecurring proforma adjustments directly attributable to the business combination included in the reported proforma revenue earnings. These proforma amounts have been calculated after applying the Company’s accounting policies and adjusting the respective acquired businesses’ results to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied from the date indicated, with the consequential tax effects. The unaudited proforma consolidated results are not to be considered indicative of the results if this acquisition occurred in the periods mentioned above, or indicative of future operations or results. Additionally, the proforma consolidated results do not reflect any anticipated synergies expected as a result of the acquisition. Subsequent Event Certain Assets of Faneuil On April 1, 2022, the Company completed an asset acquisition through its subsidiary TTEC Government Solutions LLC, of certain public sector citizen experience contracts in the transportation infrastructure and healthcare exchange industries from Faneuil, Inc., a subsidiary of ALJ Regional Holdings, Inc. The business will operate as part of the TTEC Engage segment and will be fully consolidated into the financial statements of TTEC. The Faneuil acquisition will be recorded as a business combination under ASC 805, Business Combinations, with identifiable assets acquired and liabilities assumed recorded at their estimated fair values as of the acquisition date. Total cash paid at acquisition was $142.3 million less customary hold-backs related to representations and warranties, plus certain future contingent payments and customary adjustments. In addition, Faneuil agreed to grant to TTEC Government Solutions LLC a three-year call right and right of first offer to purchase certain other assets of Faneuil in its utilities and commercial healthcare verticals, and certain proprietary technology. The initial accounting for the business combination is incomplete at the time of this filing due to the limited amount of time since the acquisition date and the ongoing status of the valuation. Therefore, it is impracticable for the Company to provide the major classes of assets acquired and liabilities assumed or proforma revenue and earnings.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + 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