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Business Combinations | 9 Months Ended
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Jul. 31, 2022
Business Combinations [Abstract] |
Business Combinations | Business Combinations On June 22, 2022, we completed the acquisition of all outstanding shares of NTT Security AppSec Solutions Inc. (which has operated under the name WhiteHat Security, or WhiteHat), a provider of dynamic application security testing solutions, from NTT Security Corporation for an aggregate purchase price of $330.1 million in cash. With this acquisition, we have broadened our product offering in the application security testing market. Preliminary Purchase Price Allocation The aggregate purchase consideration was preliminarily allocated as follows:
|  | (in thousands)
Total purchase consideration |  | $ | 330,112 |
Less: cash acquired |  | 22,849 |
Total purchase consideration, net of cash acquired |  | $ | 307,263 |
Allocations |  |
Goodwill |  | $ | 247,734 |
Intangible assets |  | 97,500 |
Deferred revenue |  | (40,367) |
Other tangible assets, net |  | 2,396 |
|  | $ | 307,263 |
The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of WhiteHat. The $247.7 million of goodwill was assigned to the Software Integrity reporting unit and the amount recognized was not deductible for tax purposes. The acquired identifiable intangible assets of $97.5 million were valued using the income or cost approach. The intangible assets are being amortized over their respective useful lives ranging from 5 to 10 years. Other Fiscal 2022 Acquisitions During the three months ended January 31, 2022, we completed an acquisition for purchase consideration of $20.0 million, net of cash acquired. The preliminary purchase price was allocated as follows: $4.3 million to identifiable intangible assets and $15.7 million to goodwill, which were attributable to the Semiconductor & System Design reporting unit. There was no tax-deductible goodwill related to the acquisition. During the three months ended April 30, 2022, we acquired 75% equity interest in OpenLight Photonics, Inc. (OpenLight) for cash consideration of $90.0 million. The remaining 25% equity interest in OpenLight is held by Juniper Networks, Inc. (the Minority Investor) from their contribution of IP and certain tangible assets. The agreement with the Minority Investor contains redemption features whereby the interest held by the Minority Investor is redeemable either (i) at the option of the Minority Investor on or after the third anniversary of the acquisition or sooner in certain circumstances or (ii) at our option beginning on the third anniversary of the acquisition. This option is exercisable at the greater of fair value at the time of redemption or $30.0 million and was valued at $10.1 million, resulting in a total consideration of $100.1 million. The preliminary purchase price was allocated as follows: $94.0 million to identifiable intangible assets and $45.1 million to goodwill, which were attributable to the Semiconductor & System Design reporting unit. The goodwill was mainly attributable to the assembled workforce and planned growth in new markets. There was no tax-deductible goodwill related to the acquisition. From the date of acquisition through July 31, 2022, OpenLight incurred a net loss of $12.9 million, of which $3.2 million was attributable to redeemable non-controlling interest. As of July 31, 2022, the carrying amount of the redeemable non-controlling interest was recorded at its estimated fair value of $43.5 million in the unaudited condensed consolidated balance sheets. We have included the financial results of these acquisitions in our unaudited condensed consolidated financial statements from the date of acquisition. We do not consider these acquisitions to be material, individually or in the aggregate, to our unaudited condensed consolidated financial statements. Preliminary Fair Value Estimates For all acquisitions completed, the purchase price was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimated fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of acquisition. These estimates and assumptions are subject to change as additional information becomes available during the respective measurement period, which is not expected to exceed 12 months from applicable acquisition date. Acquisition-Related Transaction Costs Transaction costs were $5.2 million and $11.3 million during the three and nine months ended July 31, 2022, respectively. Transaction costs were $5.7 million and $11.6 million during the three and nine months ended July 31, 2021, respectively. These costs mainly consisted of professional fees and administrative costs and were expensed as incurred in our unaudited condensed consolidated statements of income.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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