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SUBSEQUENT EVENT SUBSEQUENT EVENT
12 Months Ended
Jul. 31, 2018
Subsequent Events [Abstract]  
SUBSEQUENT EVENT
SUBSEQUENT EVENT
Frame Acquisition
On August 24, 2018, we completed the acquisition of Mainframe2, Inc., ("Frame"), a privately held Delaware corporation with its principal offices in San Mateo, California. Frame provides a cloud-based Windows desktop and application delivery service. The aggregate preliminary purchase price of approximately $129.7 million consisted of approximately $26.7 million in cash and 1,807,576 unregistered shares of our Class A common stock with an aggregate fair value of approximately $103.0 million. The fair value of the shares of common stock issued was determined to be $56.97 per share, the closing price of our stock on August 24, 2018. Certain portions of the consideration for the acquisition, both cash and shares of our Class A common stock, have been placed in escrow to secure the indemnification obligations of certain Frame security holders.
We also entered into employee holdback or deferred payment arrangements with certain employees of Frame who joined Nutanix after the acquisition, totaling approximately $6.6 million. As payment of these deferred payments is contingent upon the continuous service of the employees, they are being accounted for as compensation over the required service period of three years. In addition, we also issued 643,746 unregistered shares of our Class A common stock to these Frame employees subject to their continuous employment with us. The fair value of the Class A common stock issued pursuant to the holdback arrangements was approximately $36.7 million, or $56.97 per share, the closing price of our Class A common stock on August 24, 2018. This holdback will be accounted for as stock-based compensation over the required three-year service period.
We are currently in the process of finalizing the accounting for this transaction and expect to complete our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed by the end of the first quarter of fiscal 2019.