Business Combinations

6 Months Ended

Jun. 30, 2018

Acquisition of Acquisio, Inc.

On November 1, 2017, the Company acquired certain assets and liabilities of Acquisio, Inc., a provider of online advertising management. The Company paid approximately $8.7 million from acquisition at closing and an additional $0.6 million through June 30, 2018. Transaction costs associated with the acquisition were not significant.

The following table summarizes the Company's purchase price allocation based on the fair values of the assets acquired and the liabilities assumed (in thousands):



	December 31, 2017			Adjustments to Opening Balance Sheet			June 30, 2018
Tangible current assets	$	130		$	—		$	130
Property plant and equipment	376			—			376
Domain/Trade names	401			—			401
Developed Technology	2,698			—			2,698
Customer relationships	1,908			—			1,908
Other intangible assets	—			635			635
Goodwill	4,264			—			4,264
Current liabilities	(274		)	—			(274		)
Deferred revenue	(93		)	—			(93		)
Other long term liabilities	(129		)	(635		)	(764		)
Purchase price consideration	$	9,281		$	—		$	9,281

The customer relationships and developed technology are amortized over four years and ten years, respectively. The domain and trade names are indefinite-lived intangible assets and are not amortized.

Acquisition of DonWeb

On January 31, 2017, the Company acquired 100% of the outstanding shares of DonWeb, a hosting and domain registration company catering to the Spanish-speaking market, located in Rosario, Argentina. The Company paid approximately $8.6 million at closing. The Company may pay the seller additional consideration of up to $2.0 million on January 31, 2021, present valued to $1.7 million as of the acquisition date subject to certain indemnification provisions, for total consideration of $10.3 million In addition, the agreement includes a four-year earnout provision that entitles the seller up to $3.0 million of consideration contingent upon the post-acquisition business performance and employment. Earnout amounts are recorded as compensation expense. Transaction costs associated with the acquisition were not significant.

The Company accounted for the acquisition using the acquisition method as required by ASC 805, Business Combinations. As such, fair values have been assigned to the assets acquired and liabilities assumed and the excess of the total purchase price over the fair value of the net assets acquired is recorded as goodwill. The Company, with the assistance of independent valuation professionals, has also performed valuations of the fair value of certain intangible assets. The goodwill recorded from this acquisition represents business benefits the Company anticipates realizing from acquiring an entity in the Spanish-speaking market, and is not deductible for income tax purposes. In connection with the acquisition, the Company recorded approximately $4.0 million of liabilities arising from pre-acquisition matters that are more likely than not to be sustained upon examination, inclusive of interest and penalties for which the Company is indemnified. The following table summarizes the Company's purchase price allocation based on the fair values of the assets acquired and the liabilities assumed (in thousands):



	As of June 30, 2018
Tangible current assets	$	1,071
Property plant and equipment	2,344
Domain/Trade names	990
Non-competes	236
Customer relationships	1,720
Other non current assets	2,811
Goodwill	10,568
Current liabilities	(1,738		)
Deferred revenue	(1,584		)
Other long term liabilities	(6,070		)
Purchase price consideration	$	10,348

The non-competes and customer relationships are amortized over four years and three years, respectively. The domain and trade names are indefinite-lived intangible assets and are not amortized.

WEB.COM GROUP, INC. 10-Q