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Acquisitions
 9 Months Ended
Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
Acquisitions
2. Acquisitions
The Company performs quantitative and qualitative analyses to determine the significance of each acquisition to the financial statements the Company. Based on these analyses the below acquisitions were deemed to be insignificant on an individual and cumulative basis.
2022 Acquisitions
Acquisitions completed during the nine months ended September 30, 2022 include the following:
•BA Insight - On February 22, 2022, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of BA Insight Inc., (“BA Insight”), a cloud-based enterprise knowledge management solution. Revenues recorded since the acquisition date through September 30, 2022 were approximately $5.2 million. Revenues recorded for BA Insight for the quarter ended September 30, 2022 were approximately $2.4 million.
•Objectif Lune - On January 07, 2022, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Objectif Lune Inc., a Quebec proprietary company (“Objectif Lune”), cloud-based document workflow product. Revenues recorded since the acquisition date through September 30, 2022 were approximately $15.5 million. Revenues recorded for Objectif Lune for the quarter ended September 30, 2022 were approximately $5.1 million.
2021 Acquisition
The acquisition completed during the year ended December 31, 2021 were:
•Panviva - On June 24, 2021, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Panviva Pty Ltd, an Australian proprietary company (“Panviva”), a cloud-based enterprise knowledge management solution.
•BlueVenn - On February 28, 2021 the Company entered into an agreement to purchase the shares comprising the entire issued share capital of BlueVenn Group Limited, a company limited by shares organized and existing under the laws of England and Wales (“BlueVenn”), a cloud-based customer data platform.
•Second Street - On January 19, 2021, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Second Street Media, Inc., a Missouri corporation (“Second Street”), an audience engagement platform.
Consideration
The following table summarizes the consideration transferred for the acquisitions described above (in thousands):
BA InsightObjectif LunePanvivaBlueVennSecond Street
Cash$33,355 $29,750 $19,931 $53,535 $25,436 
Holdback (1)
645 5,250 3,517 2,429 5,000 
Contingent consideration (2)
— — — 2,535 1,650 
Working capital and other adjustments1,587 338 379 (537)(1,365)
Total consideration$35,587 $35,338 $23,827 $57,962 $30,721 
(1)Represents the cash holdbacks subject to indemnification claims that are payable 12 months following closing for Objectif Lune, Panviva and Second Street, 15 months following closing for BA Insight and 18 months following closing for BlueVenn.
(2)Represents the acquisition date fair value of anticipated earnout payments, which are based on the estimated probability of attainment of the underlying future performance-based conditions at the time of acquisition. The maximum potential payout for the BlueVenn and Second Street earn-outs were $21.7 million and $3.0 million, respectively. As of March 31, 2022, the earnout payments for BlueVenn and Second Street were finalized resulting in no payments made.
Fair Value of Assets Acquired and Liabilities Assumed
The Company recorded the purchase of the acquisitions described above using the acquisition method of accounting, and has recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The purchase accounting for the 2022 acquisitions of BA Insight and Objectif Lune are preliminary as the Company has not finalized the overall impact of these acquisitions. Management has recorded the purchase price allocations based upon acquired company information that is currently available. Management expects to complete the purchase accounting for BA Insight and Objectif Lune no later than the first quarter of 2023.
The following condensed table presents the preliminary and finalized acquisition-date fair value of the assets acquired and liabilities assumed for the acquisitions during the year ended December 31, 2021 and through the nine months ended September 30, 2022, (in thousands):
PreliminaryFinal
BA InsightObjectif LunePanvivaBlueVennSecond Street
Year Acquired20222022202120212021
Cash$4 $745 $132 $1,115 $— 
Accounts receivable2,466 5,251 2,122 1,289 1,105 
Other current assets4,080 7,197 4,985 2,002 89 
Operating lease right-of-use asset110 1,905 197 1,357 489 
Property and equipment3 248 26 611 156 
Customer relationships10,500 17,717 9,757 18,888 14,600 
Trade name150 362 76 238 200 
Technology2,000 5,512 2,194 4,337 3,400 
Favorable Leases— 291 — — — 
Goodwill25,993 23,283 16,604 44,892 16,586 
Other assets25 744 33 24 13 
Total assets acquired45,331 63,255 36,126 74,753 36,638 
Accounts payable(236)(2,001)(1,257)(2,772)(230)
Accrued expense and other(4,193)(9,437)(5,053)(2,429)(378)
Deferred tax liabilities(388)(5,726)(2,395)(3,640)(4,320)
Deferred revenue(4,817)(8,848)(3,397)(6,593)(500)
Operating lease liabilities(110)(1,905)(197)(1,357)(489)
Total liabilities assumed(9,744)(27,917)(12,299)(16,791)(5,917)
Total consideration$35,587 $35,338 $23,827 $57,962 $30,721 
The Company uses third party valuation consultants to determine the fair values of assets acquired and liabilities assumed. Tangible assets are valued at their respective carrying amounts, which approximates their estimated fair value. The valuation of identifiable intangible assets reflects management’s estimates based on, among other factors, the use of established valuation methods. Customer relationships are valued using the multi-period excess earnings method. Developed technology and trade names are valued using the relief-from-royalty method.
The following table summarizes the weighted-average useful lives, by major finite-lived intangible asset class, for intangibles acquired during the nine months ended September 30, 2022 and the year ended December 31, 2021 (in years):
Useful Life
September 30, 2022December 31, 2021
Customer relationships7.07.0
Trade name2.02.0
Developed technology6.25.0
Favorable Leases6.30
Total weighted-average useful life6.86.6
During the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill based on changes to management's estimates and assumptions.
The goodwill of $127.4 million for the above acquisitions is primarily attributable to the synergies expected to arise after the acquisition and the value of the acquired workforce. Goodwill that is deductible for tax purposes at the time of the acquisitions was $2.0 million.
Total transaction related expenses incurred with respect to acquisition activity during the three months ended September 30, 2022 and September 30, 2021 was a gain of $0.3 million and an expense of $0.1 million, respectively. During the nine months ended September 30, 2022 and September 30, 2021, total transaction related expenses were $4.6 million and $6.2 million,
respectively. Transaction related expenses, excluding transformation costs, include expenses such as banker fees, legal and professional fees, insurance costs, and deal bonuses. Transaction costs are included in acquisition-related expenses in our condensed consolidated statement of operations.
Other Acquisitions and Divestitures
From time to time we may purchase or sell customer relationships that meet certain criteria. We had no purchase or sale of customer relationships during the three and nine months ended September 30, 2022 and September 30, 2021