CPSI 2017 Annual Report

71 We do not believe that any other recently issued but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements. 3. BUSINESS COMBINATION Acquisition of HHI On January 8, 2016, we acquired all of the assets and liabilities of HHI, including its wholly-owned subsidiaries, Healthland, AHT and Rycan. Healthland is a provider of electronic health records ("EHR") and clinical information management in the acute care market. AHT is a provider of clinical and financial solutions in the post-acute care market. Rycan offers SaaS-based revenue cycle management workflow and automation software to hospitals. We believe the acquisition of HHI: • strengthened our position in providing healthcare information systems to community healthcare organizations by combining hospital customers; • introduced CPSI to the post-acute care market; and • expanded the products offered by and capabilities of TruBridge with the addition of Rycan and its suite of revenue cycle management software products. These factors, combined with the synergies and economies of scale expected from combining the operations of CPSI and HHI, were the basis for the acquisition. Consideration for the acquisition included cash (net of cash of the acquired entities) of $162.6 million (inclusive of seller's transaction expenses), 1,973,880 shares of common stock of CPSI ("CPSI Common Stock"), and the assumption by CPSI of stock options that became exercisable for 174,972 shares of CPSI Common Stock. During 2015, we incurred approximately $3.0 million of pre-tax costs in connection with the acquisition of HHI. During the year ended December 31, 2016, we incurred approximately $8.2 million, of pre-tax acquisition costs in connection with the acquisition of HHI. We incurred no such costs during the year ended December 31, 2017. Acquisition costs are included in general and administrative expenses in our consolidated statements of operations. (In thousands) Purchase Price Cash consideration, net of acquired cash received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 162,611 Fair value of common stock and options issued as consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . 97,017 Total consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 259,628 Our acquisition of HHI was treated as a purchase in accordance with Accounting Standards Codification (the "Codification") 805, Business Combinations , of the Financial Accounting Standards Board ("FASB"), which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. Our allocation of the purchase price was based on management's judgment after evaluating several factors, including a valuation assessment.