Twitter Inc (TWTR)’s Acquisition of Gnip Valued at $134 Million

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In May 2014, Twitter Inc (NYSE:TWTR) completed its acquisition of Gnip, Inc., a company that provides social data and was a former Twitter data partner. The numbers behind the acquisitions were unknown till recently when Twitter Inc (NYSE:TWTR) filed its latest Form 10-Q filed with the Securities and Exchange Commission. We took a look at the SEC filing, which showed that Twitter Inc (NYSE:TWTR)  ended up paying for around $134 million for the acquisition.

Twitter Inc (NYSE:TWTR), LinkedIn Corp (NYSE:LNKD), Yelp Inc (NYSE:YELP), Pandora Media Inc (NYSE:P), social media stocks down

According to the filing. Twitter Inc (NYSE:TWTR)  agreed to pay $107.3 million in cash and issue a total of 600,000 shares of common stock, including shares of restricted stock subject to continued employment for all of Gnip’s issued and outstanding shares. Twitter Inc (NYSE:TWTR) also agreed to issue up to 400,000 shares of the Company’s stock because of assumed Gnip equity awards held by individuals, who will continue to provide services to Gnip after its acquisition by Twitter Inc (NYSE:TWTR).

The allocation by Twitter Inc (NYSE:TWTR) of the fair value of the total consideration of $134.1 million for Gnip constituted of $9.3 million to customer relationships, $9.1 million in tangible assets acquired, $5.8 million in liabilities assumed, $6.4 million in deferred tax liability, and $23.2 million for the developed technology. The remaining $104.7 million of the purchase price over the fair value of net assets acquired was recorded as goodwill. Twitter Inc (NYSE:TWTR)  doesn’t expect this goodwill to be deductible for U.S. income tax purposes.

Disclosure: None

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