SEC Filings

6-K
WNS (HOLDINGS) LTD filed this Form 6-K on 11/05/2018
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Table of Contents

WNS (HOLDINGS) LIMITED

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

 

  b)

Denali Sourcing Services Inc.

On January 20, 2017 (“Acquisition Date”), the Company acquired all outstanding shares of Denali Sourcing Services Inc. (“Denali”), a provider of strategic procurement BPM solutions for a purchase consideration of $38,668 (including the contingent consideration of $6,277, dependent on the achievement of revenue targets over a period of three years and deferred consideration of $522 payable in first quarter of fiscal 2018), including adjustments for working capital. The fair value of the contingent consideration liability was estimated using Level 3 inputs which included an assumption for discount rate of 2.5%. The potential undiscounted amount of all future payments that the Company could be required to make under the contingent consideration arrangement is between $0 and $6,578. The payment was funded through a three-year secured term loan.

Denali delivers global sourcing and procurement services to high-tech, retail and Consumer Packaged Goods (“CPG”), banking and financial services, utilities, and healthcare verticals. The acquisition of Denali is expected to add a strategic procurement capability to the Company’s existing Finance and Accounting services and will enable the Company to offer procurement solutions to its clients.

The Company incurred acquisition related costs of $502, which have been included in “General and administrative expenses” in the consolidated statement of income for the year ended March 31, 2017.

During the year ended March 31, 2018, the Company made payment of $522 towards deferred consideration and an amount of $968 was reduced from the purchase consideration towards working capital adjustments. During the year ended March 31, 2018, a contingent consideration of $2,351 was also paid by the Company to the sellers on achievement of the revenue target related to the first measurement period.

The purchase price has been allocated, as set out below, to the assets acquired and liabilities assumed in the business combination.

 

     Amount  

Cash

   $ 1,204  

Trade receivables

     2,799  

Unbilled revenue

     1,258  

Prepayments and other current assets

     95  

Property and equipment

     53  

Deferred tax asset

     18  

Intangible assets

  

- Software

     3  

- Customer contracts

     3,025  

- Customer relationships

     8,000  

- Trade name

     545  

- Covenant not-to-compete

     1,718  

Non-current assets

     27  

Current liabilities

     (3,781

Short-term line of credit

     (475

Non-current liabilities

     (343

Deferred tax liability

     (5,020
  

 

 

 

Net assets acquired

   $ 9,126  

Less: Purchase consideration

     38,668  
  

 

 

 

Goodwill on acquisition

   $ 29,542  
  

 

 

 

Goodwill arising from this acquisition is not expected to be deductible for tax purposes. Goodwill is attributable mainly to expected synergies and assembled workforce arising from the acquisition.

During the year ended March 31, 2018, the Company completed the accounting of the assets acquired and liabilities assumed on acquisition. Corresponding changes to the comparatives for the three and six months ended September 30, 2017 have not been made, as the impact of the change on finalization of purchase price allocation is not material.

 

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