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Subsequent Event | 3 Months Ended
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Oct. 31, 2021
Subsequent Events [Abstract] |
Subsequent Event |
12. Subsequent Events
Business Combinations
On November 1, 2021 we acquired all of the outstanding equity of The Rocket Science Group LLC (Mailchimp), a global customer engagement and marketing platform for growing small and mid-market businesses. We acquired Mailchimp to help deliver on the vision of an innovative, end-to-end customer growth platform for small and mid-market businesses. Mailchimp is part of our Small Business & Self-Employed segment. The fair value of the purchase consideration totaled $12 billion and included $5.7 billion in cash and 10.1 million shares of Intuit common stock with a value of approximately $6.3 billion. The fair value of the stock consideration is based on the October 29, 2021 closing price of Intuit common stock of $625.99. Pursuant to the equity purchase agreement we also issued approximately 573,000 restricted stock units in substitution of outstanding equity incentive awards. These restricted stock units have a fair value of approximately $349 million and will be expensed over three years. Additionally, we will be issuing approximately $215 million of RSUs to Mailchimp employees, of which $155 million will be expensed over four years and $60 million will be expensed over six months.
Credit Facilities
On November 1, 2021 the existing amended and restated credit agreement described in Note 5, "Current Liabilities" was terminated. On November 1, 2021 we entered into a credit agreement with certain institutional lenders with an aggregate principal amount of $5.7 billion, which includes a $1 billion unsecured revolving credit facility that matures on November 1, 2026 and a $4.7 billion unsecured term loan that matures on November 1, 2024. Under this agreement we may, subject to certain customary conditions including lender approval, on one or more occasions increase commitments under the unsecured revolving credit facility in an amount not to exceed $250 million in the aggregate and may extend the maturity date up to two times. Borrowings under the unsecured revolving credit facility and the unsecured term loan accrue interest at rates equal to, at our election, either (i) the alternate base rate, or (ii) the SOFR rate, plus an applicable margin for such loans as defined in the credit agreement. Actual margins under either election, for both the unsecured revolving credit facility and the unsecured term loan, will be based on our senior debt credit ratings. This agreement includes customary affirmative and negative covenants, including financial covenants that require us to maintain a ratio of total gross debt to annual earnings before interest, taxes, depreciation and amortization (EBITDA) of not greater than 3.25 to 1.00 and a ratio of annual EBITDA to annual interest expense of not less than 3.00 to 1.00 as of the last day of each fiscal quarter. On November 1, 2021 we borrowed the full $4.7 billion under the unsecured term loan to fund a portion of the acquisition of Mailchimp.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6842918&loc=SL6314017-165662 + Details
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