Safeway 2013 Annual Report Download - page 61
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Table of Contents
On November 12, 2013, Blackhawk acquired substantially all of the net assets of InteliSpend from Maritz Holdings Inc., a privately-held
company, for total purchase consideration of $97.5 million. InteliSpend delivers intelligent prepaid solutions for business needs: employee
rewards, wellness, sales incentives, expense management and promotional programs. The following table summarizes the purchase price
allocation which was based upon the estimated fair value of each asset and liability (in millions).
Cash and cash equivalents $15.0
Trading securities 29.4
Accounts receivable 7.9
Cardholder liabilities (31.4)
Customer deposits (12.5)
Other tangible assets, net (4.0)
Deferred taxes (0.3)
Identifiable technology and intangible assets 39.2
Goodwill (1) 54.2
Total consideration $97.5
(1) See Note D.
Blackhawk sold the trading securities for cash on the day after closing and presents this sale as an inflow from investing activities in the
accompanying consolidated statements of cash flows.
The following table summarizes the components of the identifiable technology and intangible assets of InteliSpend and their estimated useful
lives at the acquisition date (dollars in millions).
Fair Value
Useful life
Customer relationships $23.9
7 years -14 years
Back-log 9.3
1 year -3 years
Patent 3.3
5 years
Technology 2.4
5 years
Trade name 0.3
4 years
$39.2
Goodwill represents the excess of cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired
and liabilities assumed in a business combination. Goodwill is not subject to amortization but must be evaluated for impairment.
Safeway tests goodwill for impairment annually (on the first day of the fourth quarter) or whenever events or circumstances indicate that it is
more likely than not that the fair value of a reporting unit is below its carrying value.
The impairment test is a two-step process. In the first step, the Company determines if the fair value of the reporting units is less than the
book value. Under generally accepted accounting principles, a reporting unit is either the equivalent to, or one level below, an operating
segment. Each reporting unit constitutes a business for which discrete financial information is available and for which management regularly
reviews
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