Business Combination

9 Months Ended

Dec. 31, 2025

12. Business Combination

On August 20, 2024 (the "Acquisition Date"), we acquired all the issued and outstanding shares of Book4Time Parent, Inc. (“Book4Time”), a hospitality software company based in Canada. Book4Time is now a wholly-owned subsidiary of Agilysys, Inc. The consolidated financial statements include the results of Book4Time’s operations since the Acquisition Date. The acquisition expands the opportunity to increase our solutions-per-customer globally.

The purchase price consisted of $147.2 million of cash paid at closing, funded from cash on hand and the proceeds of the Initial Revolving Loan, and $1.1 million of cash paid in March 2025 for settlement of certain post-closing adjustments partially offset by $2.5 million of Book4Time’s cash received in the acquisition, resulting in net cash consideration of $145.8 million. We allocated the purchase price for Book4Time to the intangible and certain tangible assets acquired and certain liabilities assumed based on their estimated fair values on the Acquisition Date, with the remaining unallocated purchase price recorded as goodwill. We determined the fair values assigned to identifiable intangible assets acquired primarily by using the income approach, which discounts the expected future cash flows to present value using estimates and assumptions determined by management.

The following table sets forth the components and the allocation of the purchase price for our acquisition of Book4Time:


(In thousands)	Total
Components of Purchase Price:
Cash	$	148,280
Total purchase price	$	148,280
Allocation of Purchase Price:
Net tangible assets (liabilities):
Accounts receivable, net	$	1,623
Other current assets, including cash acquired		3,705
Other assets		623
Current and other liabilities		(1,973	)
Deferred tax liabilities		(11,351	)
Contract liabilities		(9,324	)
Net tangible assets (liabilities)		(16,697	)
Identifiable intangible assets:
Customer relationships		35,800
Non-competition agreements		5,500
Developed technology		2,600
Trade names		17,100
Total identifiable intangible assets		61,000
Goodwill		103,977
Total purchase price allocation	$	148,280

We assigned the acquired customer relationships, non-competition agreements, developed technology, and trade name estimated useful lives of 20 years, three years, five years, and 15 years, respectively, with a weighted average useful life of approximately 15.8 years. The identifiable intangible assets acquired amortize on a straight-line basis, which we believe approximates the pattern in which the assets are utilized, over their estimated useful lives.

The goodwill recognized in the Book4Time purchase price allocation is attributable to synergies in products and technologies to serve a broader customer base, and the addition of a skilled, assembled workforce, which is not separable from goodwill under FASB Accounting Standards Codification 805. As part of the acquisition, the Company acquired fully trained personnel thereby avoiding the expenditure that would have been required to hire and train equivalent personnel. We considered the replacement cost method as most appropriate for the assembled workforce valuation. We valued the assembled workforce included in goodwill at $1.5 million. The total goodwill recognized in the acquisition amounted to $104.0 million, which is not deductible for income tax purposes.

The Company recognized acquisition costs of $0.4 million related to the acquisition of Book4Time, consisting primarily of professional fees, during the nine months ended December 31, 2025. The consolidated statement of operations includes these costs in other (gains) charges, net.

Revenue attributable to Book4Time included in our condensed consolidated statement of operations, which we define as revenue on Book4Time customer contracts in place as of the Acquisition Date, was $4.6 million for the three months ended December 31, 2024, and $6.9 million and $6.8 million for the nine months ended December 31, 2025 and 2024, respectively. Net income was not material.

Unaudited Pro-Forma Information

The financial information in the table below summarizes the combined results of operations of Agilysys and Book4Time, on a pro-forma basis, as though the companies had been combined as of the beginning of the periods presented. The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on April 1, 2024 or of results that may occur in the future.

The following unaudited pro-forma financial information for the three and nine months ended December 31, 2025 and 2024, respectively, combines the historical results of Agilysys and of Book4Time, as converted to U.S. GAAP, for the respective periods:


	Three Months Ended December 31,				Nine Months Ended December 31,
	2025		2024		2025		2024
(In thousands)	Pro-Forma		Pro-Forma		Pro-Forma		Pro-Forma
Revenue	$	80,390	$	69,561	$	236,366	$	208,298
Net income	$	9,954	$	4,159	$	27,347	$	13,608

We based the foregoing pro-forma results on estimates and assumptions that we believe are reasonable. The pro-forma results include adjustments primarily related to purchase accounting. We included acquisition costs and other non-recurring charges incurred in the earliest period presented.

- Definition

The entire disclosure for business combination.

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+ Details

AGILYSYS INC 10-Q