Acquisitions

3 Months Ended

Oct. 31, 2021

Business Combination and Asset Acquisition [Abstract]

On August 18, 2021, the Company completed its acquisition of HazardHub, Inc. ("HazardHub") for net cash consideration of approximately $53 million, subject to customary transaction adjustments, of which approximately $8 million is an acquisition consideration holdback which is subject to service conditions over the next three years. HazardHub provides API-driven property risk insights to the property & casualty insurance industry through curation, analysis, and distillation of vast amounts of data to deliver a comprehensive, national catalog of risks that may damage or destroy property. The acquisition was accounted for as a business combination.

In conjunction with the preliminary purchase price allocation, the Company determined that HazardHub's separately identifiable intangible assets were developed technology, customer relationships, and trade names. The valuation models were based on estimates of future operating projections of HazardHub and rights to sell new products containing the acquired technology as well as judgments on the discount rates used and other variables. The Company developed forecasts based on a number of factors including future revenue and operating cost projections, a discount rate that is representative of the weighted average cost of capital, in addition to royalty and long-term sustainable growth rates based on a market analysis. These fair value measurements were based on significant inputs that were not observable in the market and thus represents a Level 3 measurement. The Company amortizes the acquired intangibles over their estimated useful lives as set forth in the table below.

The preliminary allocation of purchase price is pending the completion of certain statutory tax filing requirements and is therefore subject to potential future measurement period adjustments. The measurement period will end no later than August 17, 2022. The preliminary allocation of the purchase consideration is as follows:


	Preliminary Purchase Price Allocation		Estimated Useful Lives
	(in thousands)		(in years)
Acquired assets, net of assumed liabilities	$	461
Developed technology	9,700		5
Customer relationships	5,100		5
Trademarks	900		7
Goodwill	31,185
Deferred tax liability	(2,839)
Total preliminary purchase consideration	$	44,507

Goodwill of $31.2 million arising from the acquisition is primarily related to the acquired workforce, expected synergies, and the opportunity to expand the Company’s customer base. The goodwill recorded is not expected to be deductible for income tax purposes.