10-K
TTEC HOLDINGS, INC. filed this Form 10-K on 03/06/2019
Entire Document
 

Table of Contents

TTEC HOLDINGS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Connextions

On April 3, 2017, the Company acquired all of the outstanding shares of Connextions, Inc., a health care customer service provider company, from OptumHealth Holdings, LLC. Connextions has been integrated into the health care vertical of the CMS segment of the Company. Connextions employed approximately 2,000 at several centers in the U.S.

The total cash paid at acquisition was $80 million. The purchase price is subject to customary representations and warranties, indemnities, and net working capital adjustment. In connection with the acquisition, the Company and OptumHealth (directly and through affiliates) also entered into long-term technology and customer services agreements, and into transition services agreements to facilitate the transfer of the business. The Company subsequently paid an additional $1.8 million for the working capital adjustment, which was paid during the third quarter of 2017. Additionally, fair value adjustments related to the transition services agreements reduced the purchase price by $4.1 million resulting in a net purchase price of $77.7 million.

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

 

$

 —

 

Accounts receivable, net

 

 

15,959

 

Prepaid expenses

 

 

241

 

Other current assets

 

 

51

 

Property, plant and equipment

 

 

7,594

 

Customer relationships

 

 

35,000

 

Goodwill

 

 

35,272

 

 

 

$

94,117

 

 

 

 

 

 

Accounts payable

 

$

 1

 

Accrued employee compensation and benefits

 

 

346

 

Accrued expenses

 

 

386

 

Deferred tax liabilities

 

 

15,273

 

Deferred revenue

 

 

399

 

 

 

$

16,405

 

 

 

 

 

 

Total purchase price

 

$

77,712

 

 

In the fourth quarter of 2017, the Company finalized its valuation of Connextions for the acquisition date assets acquired and liabilities assumed and determined that no material adjustments to any of the balances were required. 

The Connextions customer relationships are being amortized over a useful life of 12 years. The goodwill recognized from the Connextions acquisition is attributable, but not limited to, the acquired work force and expected synergies with CMS. None of the tax basis of the acquired intangibles and goodwill will be deductible for income tax purposes. The acquired goodwill and the operating results of Connextions are reported within the CMS segment from the date of acquisition.

Financial Impact of Acquired Businesses

The acquired businesses purchased in 2018 and 2017 noted above contributed revenues of $190.1 million and $100.3 million, and a net income (loss) of $5.0 million and $(4.2) million, inclusive of $6.5 million and $2.6 million of acquired intangible amortization, to the Company for the years ended December 31, 2018 and 2017, respectively.

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