Quarterly report pursuant to Section 13 or 15(d)

Business Acquisition

v3.21.1
Business Acquisition
3 Months Ended
Apr. 30, 2021
Business Combinations [Abstract]  
Business Acquisition

6.  Business Acquisition

Cloud Elements

On March 19, 2021, we acquired all of the outstanding capital stock of Cloud Elements Inc. (“Cloud Elements”), the provider of an API integration platform for SaaS application providers and the digital enterprise. The acquisition of Cloud Elements brings technology and an experienced team which we believe will accelerate our technology roadmap in areas such as native integrations and system event automation triggers.

The total purchase consideration for the acquisition of Cloud Elements was $36.1 million, which consisted of the following (in thousands):

 

 

 

Amount

 

Cash

 

$

5,660

 

Fair value of common stock

 

 

30,446

 

Total

 

$

36,106

 

 

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):

 

 

 

March 19, 2021

 

Cash

 

$

162

 

Accounts receivable

 

 

743

 

Other assets

 

 

1,996

 

Intangible assets

 

 

11,200

 

Goodwill

 

 

30,465

 

Total assets acquired

 

 

44,566

 

Total liabilities assumed

 

 

(8,460

)

Total

 

$

36,106

 

 

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

 

 

 

Fair Value

 

 

Estimated Useful Life

 

 

 

(in thousands)

 

 

(in years)

 

Developed technology

 

$

6,600

 

 

 

5.0

 

Customer relationships

 

 

4,500

 

 

 

3.0

 

Trade name

 

 

100

 

 

 

3.0

 

Total

 

$

11,200

 

 

 

 

 

 

The acquisition of Cloud Elements generated $30.5 million in goodwill due to the synergies expected and the skilled workforce acquired. None of this goodwill is deductible for tax purposes.

The Company incurred transaction costs in connection with the Cloud Elements acquisition of $1.1 million. Of these transaction costs, $0.9 million was included in general and administrative expenses in the condensed consolidated statements of operations for the three months ended April 30, 2021, and the remainder was recognized previously.