Quarterly report pursuant to Section 13 or 15(d)

Business Acquisitions

v3.7.0.1
Business Acquisitions
 6 Months Ended
Jun. 30, 2017
Business Acquisitions  
Business Acquisitions

3.Business Acquisitions

 

Wheelhouse Analytics LLC 

   

On October 3, 2016, the Company acquired all of the issued and outstanding membership interests of Wheelhouse Analytics LLC (“Wheelhouse”). Wheelhouse is a technology company that provides data analytics, mobile sales solutions, and online education tools to financial advisors, asset managers and enterprises. Wheelhouse is included in the Envestnet | Yodlee segment.

   

The Company acquired Wheelhouse to be integrated with Yodlee’s industry-leading data and analytics solutions to strengthen Envestnet’s data-driven insights to financial advisors, asset managers and enterprises enabling them to better manage their businesses and client relationships and deliver better outcomes to their clients. Envestnet expects to deeply integrate Wheelhouse’s tools, delivering robust online dashboards and reporting that provides actionable intelligence.

   

In connection with the acquisition of Wheelhouse, the Company paid cash consideration of $13,299 and is required to pay contingent consideration with the aggregate amount not to exceed $4,000 and certain holdbacks upon release. Changes to the estimated fair value of the contingent consideration are recognized in earnings of the Company.

   

The preliminary estimated consideration transferred in the acquisition was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Measurement

 

 

 

 

 

Preliminary

 

Period

 

Estimate as of

 

 

Estimate

 

Adjustments

 

June 30, 2017

Cash consideration

 

$

13,299

 

$

 —

 

$

13,299

Contingent consideration liability

 

 

2,582

 

 

(218)

 

 

2,364

Purchase consideration liability

 

 

887

 

 

 —

 

 

887

Working capital adjustment

 

 

110

 

 

 —

 

 

110

Cash acquired

 

 

(80)

 

 

 —

 

 

(80)

Total

 

$

16,798

 

$

(218)

 

$

16,580

The estimated fair values of certain working capital balances, contingent consideration, deferred revenue, identifiable intangible assets and goodwill are provisional and are based on the information that was available as of the acquisition date. The estimated fair values of these provisional items are based on certain valuation and other studies and are in progress and not yet at the point where there is sufficient information for a definitive measurement. The Company believes the preliminary information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair values reflected are subject to change and such changes could be significant. The Company expects to finalize the valuation of working capital balances, contingent consideration, deferred revenue, identifiable intangible assets and goodwill, and complete the acquisition accounting as soon as practicable but no later than October 3, 2017.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Measurement

 

 

 

 

Preliminary

 

Period

 

Estimate as of

 

 

Estimate

 

Adjustments

 

June 30, 2017

Total tangible assets acquired

 

$

399

 

$

(14)

 

$

385

Total liabilities assumed

 

 

(1,459)

 

 

39

 

 

(1,420)

Identifiable intangible assets

 

 

7,300

 

 

(700)

 

 

6,600

Goodwill

 

 

10,558

 

 

457

 

 

11,015

Total net assets acquired

 

$

16,798

 

$

(218)

 

$

16,580

A summary of preliminary estimated identifiable intangible assets acquired, estimated useful lives and amortization method is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Measurement

 

 

 

 

 

 

 

 

 

Preliminary

 

Period

    

Estimate as of

    

Estimated

    

Amortization

 

 

Estimate

 

Adjustments

 

June 30, 2017

    

Useful Life in Years

 

Method

Customer list

 

$

4,100

 

$

(100)

 

$

4,000

    

15

 

Accelerated

Proprietary technology

 

 

3,000

 

 

(500)

 

 

2,500

 

 6

 

Straight-line

Trade names and domains

 

 

200

 

 

(100)

 

 

100

 

 2

 

Straight-line

Total

 

$

7,300

 

$

(700)

 

$

6,600

 

 

 

 

The results of Wheelhouse’s operations are included in the condensed consolidated statements of operations beginning October 3, 2016, and are not considered material to the Company’s results of operations. As such, no pro forma information is presented for the three and six months ended June 30, 2016.