Actua Corp - FORM 8-K - EX-99.2 - December 5, 2013

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Exhibit 99.2

On December 4, 2013, the acquisition of ICG Group, Inc.’s (“ICG’s”) consolidated subsidiary, Procurian Inc. (“Procurian”), by an affiliate of Accenture plc (“Accenture”) (such transaction, the “Transaction”) was consummated. As a result of the Transaction, ICG is providing pro forma financial information with respect to (a) ICG’s consolidated balance sheet as of September 30, 2013, (b) ICG’s consolidated statements of operations for the nine months ended September 30, 2013 and September 30, 2012, and (c) ICG’s consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010. The pro forma financial information reflects, among other things, (i) the removal of Procurian’s results, as well as the consolidated tax impact related to Procurian’s removal, from ICG’s consolidated results, (ii) ICG’s receipt of the estimated cash proceeds in the Transaction and an estimated resultant gain and (iii) ICG’s payment of the estimated costs associated with the Transaction.

ICG GROUP, INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2013

(Unaudited)

 

     Historical
ICG Group, Inc. (4)		     Sale of
Procurian		     Pro Forma
ICG Group, Inc.		  

Assets

       

Current Assets

       

Cash and cash equivalents

    $ 58,621      $ 308,711 (1)    $ 367,332   

Restricted cash

      557        —          557   

Accounts receivable, net of allowance

      13,261        —          13,261   

Prepaid expenses and other current assets

      3,921        —          3,921   

Assets held for sale

      143,101        (143,101 )(2)      —     
  

 

 

    

 

 

    

 

 

  

Total current assets

      219,461        165,610        385,071   

Fixed assets, net

      6,297        —          6,297   

Goodwill

      88,989        —          88,989   

Intangibles, net

      61,871        —          61,871   

Cost and equity method investments

      30,048        —          30,048   

Other assets, net

      1,189        —          1,189   
  

 

 

    

 

 

    

 

 

  

Total Assets

    $ 407,855      $ 165,610      $ 573,465   
  

 

 

    

 

 

    

 

 

  

Liabilities

       

Current Liabilities

       

Current maturities of long-term debt

    $ 5,081      $ —        $ 5,081   

Accounts payable

      2,146        —          2,146   

Accrued expenses

      4,117        —          4,117   

Accrued compensation and benefits

      6,214        —          6,214   

Deferred revenue

      23,620        —          23,620   

Liabilities held for sale

      38,814        (45,158 )(2)      (6,344 ) 
  

 

 

    

 

 

    

 

 

  

Total current liabilities

      79,992        (45,158 )      34,834   

Long-term debt

      7,922        —          7,922   

Deferred revenue

      213        —          213   

Other liabilities

      1,422        —          1,422   
  

 

 

    

 

 

    

 

 

  

Total Liabilities

      89,549        (45,158 )      44,391   
  

 

 

    

 

 

    

 

 

  

Redeemable noncontrolling interest

      3,963        —          3,963   
  

 

 

    

 

 

    

 

 

  

Equity

       

ICG Group, Inc.’s Stockholders’ Equity

       

Preferred stock, $0.01 par value; 10,000 shares authorized, none issued or outstanding

      —          —          —     

Common stock, $0.001 par value; 2,000,000 shares authorized, 42,437 shares (2013) issued

      42        —          42   

Treasury stock, at cost, 4,853 shares (2013)

      (36,409 )      —          (36,409 ) 

Additional paid-in capital

      3,555,908        —          3,555,908   

Accumulated deficit

      (3,245,866 )      221,869  (3)      (3,023,997 ) 

Accumulated other comprehensive income

      128        (89 )(2)      39   
  

 

 

    

 

 

    

 

 

  

Total ICG Group, Inc.’s Stockholders’ Equity

      273,803        221,780        495,583   

Noncontrolling Interest

      40,540        (11,012 )(2)      29,528   
  

 

 

    

 

 

    

 

 

  

Total Equity

      314,343        210,768        525,111   
  

 

 

    

 

 

    

 

 

  

Total Liabilities, Redeemable noncontrolling interest and Equity

    $ 407,855      $ 165,610      $ 573,465   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

ICG GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For nine months ended September 30, 2013

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group, Inc. (6)		     Sale of
Procurian (8)		     Pro Forma
ICG Group, Inc.		  

Revenue

    $ 41,521      $ —        $ 41,521   

Operating expenses

       

Cost of revenue

      14,061        —          14,061   

Sales and marketing

      19,634        —          19,634   

General and administrative

      24,447        —          24,447   

Research and development

      5,075        —          5,075   

Amortization of intangible assets

      6,211        —          6,211   

Impairment related and other

      767        —          767   
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      70,195        —          70,195   
  

 

 

    

 

 

    

 

 

  

Operating income (loss)

      (28,674 )      —          (28,674 ) 

Other income (loss), net

      (178 )      —          (178 ) 

Interest income

      150        —          150   

Interest expense

      (1,076 )      —          (1,076 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes, equity loss and noncontrolling interest

      (29,778 )      —          (29,778 ) 

Income tax (expense) benefit

      1,633        (1,794 )      (161 ) 

Equity loss

      (1,919 )      —          (1,919 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations

      (30,064 )      (1,794 )      (31,858 ) 

Less: Income (loss) from continuing operations attributable to the noncontrolling interest

      (3,255 )      —          (3,255 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations attributable to ICG Group, Inc.

    $ (26,809 )    $ (1,794 )    $ (28,603 ) 
  

 

 

    

 

 

    

 

 

  

Basic income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ (0.74 )    $ (0.04 )    $ (0.78 ) 
  

 

 

    

 

 

    

 

 

  

Shares used in computation of basic income (loss) per share

      36,494        36,494        36,494   
  

 

 

    

 

 

    

 

 

  

Diluted income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ (0.74 )    $ (0.04 )    $ (0.78 ) 
  

 

 

    

 

 

    

 

 

  

Shares used in computation of diluted income (loss) per share

      36,494        36,494        36,494   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

ICG GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For nine months ended September 30, 2012

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group, Inc. (6)		     Sale of
Procurian (8)		     Pro Forma
ICG Group, Inc.		  

Revenue

    $ 17,609      $ —        $ 17,609   

Operating expenses

       

Cost of revenue

      7,165        —          7,165   

Sales and marketing

      8,377        —          8,377   

General and administrative

      20,631        —          20,631   

Research and development

      4,901        —          4,901   

Amortization of intangible assets

      3,318        —          3,318   

Impairment related and other

      795        —          795   
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      45,187        —          45,187   
  

 

 

    

 

 

    

 

 

  

Operating income (loss)

      (27,578 )      —          (27,578 ) 

Other income (loss), net

      32,849        —          32,849   

Interest income

      325        —          325   

Interest expense

      —          —          —     
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes, equity loss and noncontrolling interest

      5,596        —          5,596   

Income tax (expense) benefit

      2,884        (2,952 )      (68 ) 

Equity loss

      (7,147 )      —          (7,147 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations

      1,333        (2,952 )      (1,619 ) 

Less: Income (loss) from continuing operations attributable to the noncontrolling interest

      (872 )      —          (872 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations attributable to ICG Group, Inc.

    $ 2,205      $ (2,952 )    $ (747 ) 
  

 

 

    

 

 

    

 

 

  

Basic income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ 0.06      $ (0.08 )    $ (0.02 ) 
  

 

 

    

 

 

    

 

 

  

Shares used in computation of basic income (loss) per share

      35,907        35,907        35,907   
  

 

 

    

 

 

    

 

 

  

Diluted income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ 0.06      $ (0.08 )    $ (0.02 ) 
  

 

 

    

 

 

    

 

 

  

Shares used in computation of diluted income (loss) per share

      36,435        36,435        35,907   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

ICG GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For twelve months ended December 31, 2012

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group, Inc.(5)		     Sale of
Procurian (7)		     Pro Forma
ICG Group, Inc.		  

Revenue

    $ 166,593      $ (139,953 )    $ 26,640   

Operating expenses

       

Cost of revenue

      105,762        (95,404 )      10,358   

Sales and marketing

      21,920        (9,770 )      12,150   

General and administrative

      38,805        (9,682 )      29,123   

Research and development

      14,175        (6,777 )      7,398   

Amortization of intangible assets

      5,590        (753 )      4,837   

Impairment related and other

      1,548        (418 )      1,130   
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      187,800        (122,804 )      64,996   
  

 

 

    

 

 

    

 

 

  

Operating income (loss)

      (21,207 )      (17,149 )      (38,356 ) 

Other income (loss), net

      57,879        (59 )      57,820   

Interest income

      442        (45 )      397   

Interest expense

      (526 )      542        16   
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes, equity loss and noncontrolling interest

      36,588        (16,711 )      19,877   

Income tax (expense) benefit

      (1,336 )      1,228        (108 ) 

Equity loss

      (8,672 )      —          (8,672 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations

      26,580        (15,483 )      11,097   

Less: Income (loss) from continuing operations attributable to the noncontrolling interest

      368        (1,961 )      (1,593 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations attributable to ICG Group, Inc.

    $ 26,212      $ (13,522 )    $ 12,690   
  

 

 

    

 

 

    

 

 

  

Basic income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ 0.73      $ (0.38 )    $ 0.35   
  

 

 

    

 

 

    

 

 

  

Shares used in computation of basic income (loss) per share

      35,890        35,890        35,890   
  

 

 

    

 

 

    

 

 

  

Diluted income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ 0.72      $ (0.37 )    $ 0.35   
  

 

 

    

 

 

    

 

 

  

Shares used in computation of diluted income (loss) per share

      36,543        36,543        36,543   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

ICG GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For twelve months ended December 31, 2011

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group, Inc.(5)		     Sale of
Procurian (7)		     Pro Forma
ICG Group, Inc.		  

Revenue

    $ 133,437      $ (120,552 )    $ 12,885   

Operating expenses

       

Cost of revenue

      81,281        (76,692 )      4,589   

Sales and marketing

      13,466        (8,155 )      5,311   

General and administrative

      29,228        (9,091 )      20,137   

Research and development

      9,157        (6,246 )      2,911   

Amortization of intangible assets

      1,412        (39 )      1,373   

Impairment related and other

      753        (644 )      109   
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      135,297        (100,867 )      34,430   
  

 

 

    

 

 

    

 

 

  

Operating income (loss)

      (1,860 )      (19,685 )      (21,545 ) 

Other income (loss), net

      42,624        579        43,203   

Interest income

      393        (32 )      361   

Interest expense

      (577 )      546        (31 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes, equity loss and noncontrolling interest

      40,580        (18,592 )      21,988   

Income tax (expense) benefit

      4,287        (4,062 )      225   

Equity loss

      (11,964 )      —          (11,964 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations

      32,903        (22,654 )      10,249   

Less: Income (loss) from continuing operations attributable to the noncontrolling interest

      2,890        (3,094 )      (204 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations attributable to ICG Group, Inc.

    $ 30,013      $ (19,560 )    $ 10,453   
  

 

 

    

 

 

    

 

 

  

Basic income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ 0.82      $ (0.53 )    $ 0.29   
  

 

 

    

 

 

    

 

 

  

Shares used in computation of basic income (loss) per share

      36,656        36,656        36,656   
  

 

 

    

 

 

    

 

 

  

Diluted income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ 0.80      $ (0.52 )    $ 0.28   
  

 

 

    

 

 

    

 

 

  

Shares used in computation of diluted income (loss) per share

      37,460        37,460        37,460   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

ICG GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For twelve months ended December 31, 2010

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group, Inc.(5)		     Sale of
Procurian (7)		     Pro Forma
ICG Group, Inc.		  

Revenue

    $ 109,213      $ (101,094 )    $ 8,119   

Operating expenses

       

Cost of revenue

      67,785        (64,870 )      2,915   

Sales and marketing

      10,367        (6,549 )      3,818   

General and administrative

      28,345        (8,655 )      19,690   

Research and development

      7,870        (5,697 )      2,173   

Amortization of intangible assets

      1,357        —          1,357   

Impairment related and other

      1,182        (386 )      796   
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      116,906        (86,157 )      30,749   
  

 

 

    

 

 

    

 

 

  

Operating income (loss)

      (7,693 )      (14,937 )      (22,630 ) 

Other income (loss), net

      74,147        354        74,501   

Interest income

      330        (37 )      293   

Interest expense

      (366 )      276        (90 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes, equity loss and noncontrolling interest

      66,418        (14,344 )      52,074   

Income tax (expense) benefit

      (362 )      1,473        1,111   

Equity loss

      (16,022 )      —          (16,022 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations

      50,034        (12,871 )      37,163   

Less: Income (loss) from continuing operations attributable to the noncontrolling interest

      1,780        (1,914 )      (134 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations attributable to ICG Group, Inc.

    $ 48,254      $ (10,957 )    $ 37,297   
  

 

 

    

 

 

    

 

 

  

Basic income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ 1.33      $ (0.31 )    $ 1.02   
  

 

 

    

 

 

    

 

 

  

Shares used in computation of basic income (loss) per share

      36,427        36,427        36,427   
  

 

 

    

 

 

    

 

 

  

Diluted income (loss) from continuing operations per share attributable to ICG Group, Inc.:

    $ 1.30      $ (0.29 )    $ 1.01   
  

 

 

    

 

 

    

 

 

  

Shares used in computation of diluted income (loss) per share

      37,064        37,064        37,064   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

ICG Group, Inc.

Notes to the Pro Forma Condensed Consolidated Financial Statements

(Unaudited)

 

(1) Amount represents sale proceeds received by ICG at closing, plus payment in connection with terminated tax sharing agreement between ICG and Procurian, less ICG transaction bonus costs (such amount, “Pro Forma Cash”).
(2) Represents adjustments to eliminate the assets and liabilities of Procurian, as well as ICG’s share of Procurian’s transaction expenses of approximately $6.3 million.
(3) To record the gain on the sale of the stock of Procurian.

The reconciliation of estimated net gain is as follows:

 

Pro Forma Cash plus Accrued transaction expenses

    $ 318,644,000   

Net assets sold

      (86,842,000 ) 

Accrued transaction expenses

      (9,933,000 ) 

Estimated net gain

    $ 221,869,000   

 

(4) Represents the Condensed Consolidated Balance Sheet included in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2013.
(5) Represents the Condensed Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
(6) Represents the Condensed Consolidated Statements of Operations included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013.
(7) Represents adjustments to eliminate the results of operations of Procurian’s business, items that ICG believes are directly attributable to the sale, and ICG’s consolidated tax positions. Those adjustments are factually supportable and will not continue after the sale of Procurian. Transaction costs are not included in the Pro Forma Condensed Consolidated Statements of Operations. The effect is to eliminate income from continuing operations of $13.5 million, $19.6 million, and $11.0 million from ICG’s consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010, respectively.
(8) Represents adjustments to eliminate ICG’s consolidated tax positions; those adjustments are factually supportable and will not continue after the sale. The effect is to eliminate income from continuing operations of $1.8 million and $3.0 million from ICG’s consolidated statements of operations for the nine-month periods ended September 30, 2013 and 2012, respectively.

Actua Corp Reports