Two sources for comparable “useful life” data from BVR

CFOs and valuation analysts performing purchase price allocation (ASC 805) analyses need to assess the useful lives of the intangibles in the acquired company.  Subscribers to Pratts Stats Middle Market Deal Database may not know that they already have access to nearly 2,000 purchase price allocations (from official filings), complete with “living” data. Here’s a random sample from one Pratt’s Stats Transaction:

Allocation of the Purchase Price:

Cash and cash equivalents, $26,000,000

Accounts receivable, net $22,000,000

Intangible assets, $120,000,000

Deferred tax assets, $53,000,000

Other assets, $10,000,000

Deferred revenue, ($25,000,000)

Other liabilities, ($8,000,000)

Intangible Assets Acquired:

Customer relationships – subscription, hosting & maintenance, and perpetual software: $37,000,000 (10-year useful life)

Customer relationships – professional services: $13,000,000 (4 years); Developed technology: $60,000,000 (7 years)

Trademarks/trade names: $10,000,000 (10 years)

Identification and valuation of those intangibles is another matter, and analysts will benefit greatly from Mark Zyla’s comprehensive treatment in his Advanced Workshop on Valuation Issues Under ASC 805 and Business Combinations on November 3.