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Business Combinations | 3 Months Ended
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Jul. 04, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Business Combinations | Business Combinations Acquisition of MoneyLion On December 10, 2024, we entered into a definitive agreement to acquire MoneyLion. We completed the acquisition of MoneyLion on April 17, 2025. MoneyLion extends our identity solutions into offering comprehensive financial wellness through MoneyLion’s full-featured personal finance platform that includes credit building and financial management services. Under the terms of the definitive agreement, each share of Class A common stock, par value $0.0001 per share, of MoneyLion, that is issued and outstanding as of immediately prior to the effective time of the acquisition was automatically cancelled, extinguished, and converted into the right to receive cash in an amount equal to $82.00, without interest thereon. Additionally, we cancelled all in-the money outstanding stock options, whether vested or unvested, and converted into the right to receive (i) an amount in cash, without interest thereon, equal to the product obtained by multiplying (a) the number of in-the-money outstanding stock option immediately prior to the close by (b) the excess, if any, of MoneyLion’s closing stock price over the exercise price per share of such in-the-money stock option and (ii) one CVR in respect of each in-the-money stock option immediately prior to the close. Any outstanding stock option with an exercise price greater than or equal to MoneyLion’s closing stock price per share was forfeited and canceled for no consideration. We paid cash consideration of approximately $935 million for 100% of MoneyLion’s issued and outstanding common stock and in-the-money outstanding stock options. In addition, for each share owned, MoneyLion shareholders received at closing one CVR that entitles the holder to a contingent payment of $23.00 in the form of shares of our common stock (issuable based on an assumed share price of $30.48 per Gen share) if our average volume-weighted average share price reaches at least $37.50 per share over 30 consecutive trading days from December 10, 2024 until 24 months after close. As of the close of the acquisition, we issued 12 million CVRs representing a fair value of approximately $73 million. Refer to Note 14 for further discussion on the CVRs. Additionally, all outstanding and unvested restricted stock units (RSUs) and performance share units (PSUs) were assumed and converted into 4 million service-based RSUs of Gen’s common stock. The conversion was calculated by multiplying the total number of unvested RSUs and PSUs by an equity conversion ratio of 3.48. All converted RSUs will vest in accordance with the vesting period set forth in the original award agreement assuming continued service by the recipients through such date. The total fair value of these converted restricted stock awards was approximately $92 million, which $21 million was for pre-combination services and therefore represents purchase consideration and $71 million will be recognized as stock-compensation expense over the requisite service period. Consideration transferred The total preliminary consideration for the acquisition of MoneyLion was approximately $970 million, net of cash acquired, and consisted of the following:
(In millions) | April 17, 2025
Cash consideration for outstanding MoneyLion common shares | $ | 935 |
Fair value of assumed and converted equity awards | 21 |
Fair value of CVRs | 73 |
Total consideration | 1,029 |
Less cash acquired | 59 |
Net consideration transferred | $ | 970 |
Fair value of assets acquired and liabilities assumed We accounted for the acquisition of MoneyLion as a business combination. The identifiable assets acquired, and liabilities assumed of MoneyLion were recorded at their estimated fair values as of the acquisition date. The allocation of purchase price requires management to make significant estimates and assumptions in determining the fair values of the assets acquired and liabilities assumed, especially with respect to intangible assets. Third-party valuation specialists were also utilized for certain estimates. Our preliminary allocation of the aggregate purchase price, based on the estimated fair values of the assets acquired and liabilities assumed, as of the acquisition date, is as follows:
(In millions) | April 17, 2025
Assets: |
Accounts receivable (1) | $ | 155 |
Other current assets | 51 |
Assets held for sale | 14 |
Property and equipment | 2 |
Operating lease assets | 14 |
Intangible assets | 347 |
Goodwill | 527 |
Other long-term assets | 42 |
Total assets acquired | 1,152 |
Liabilities: |
Accounts payable | 41 |
Current liabilities | 97 |
Contract liabilities | 6 |
Operating lease liabilities | 14 |
Other long-term obligations | 24 |
Total liabilities assumed | 182 |
Total purchase price | $ | 970 |
(1) Gross accounts receivable at acquisition date and the amount of receivables expected to be collected are materially the same. The allocation of the purchase price is based upon a preliminary valuation, as additional information becomes available, our estimates and assumptions may be subject to refinement within the measurement period, which may be up to one year from the acquisition date. Adjustments to the purchase price may require adjustments to goodwill prospectively. The primary areas of preliminary purchase price allocation that are not yet finalized include intangible assets, deferred revenue, certain tax and litigation matters. The preliminary goodwill of $527 million represents the excess of the consideration transferred over the fair values of the assets acquired and liabilities assumed. It is attributable to the expected synergies of the acquisition, including future cost savings from planned integration of infrastructure, facilities, personnel and systems, and other benefits that are anticipated to be generated by combining both companies. Goodwill is allocated to our Trust-Based Solutions Segment. The goodwill recognized is not expected to be deductible for U.S. tax purposes. See Note 6 for further information on goodwill. Preliminary identified intangible assets and their respective useful lives, as of April 17, 2025, are as follows:
(In millions, except for useful lives) | Fair Value | Weighted-Average Estimated Useful Life (Years)
Customer and partner relationships (1) | $ | 102 |  | 3
Developed technology (2) | 161 |  | 5
Finite-lived trade names and other (3) | 84 |  | 8
Total identified intangible assets | $ | 347 |  |
(1) Customer and partner relationships include marketplace partner relationships, banking partner relationships, and customer relationships of $42 million, $4 million, and $56 million, respectively. Marketplace partner relationships were valued using the multi-period excess earnings method (MPEEM), which is a form of the income approach, which considers significant assumptions like discount rate, long-term growth rate, and attrition factor. Banking partner relationships and customer relationships were valued using the replacement cost approach. The replacement cost approach is a valuation method that relies on estimating the replacement costs of assets based on the cost that a market participant would incur to generate the acquired portfolio of relationships. (2) Developed technology was valued using the Relief-from-Royalty method, which is a form of the income approach, which considers significant assumptions like long-term growth rates, royalty rates, discount rates, and obsolescence rates. (3) Finite-lived trade names and other include content library and the MoneyLion trade name intangibles of $14 million and $70 million, respectively. Content library was valued using the replacement cost approach, which relies on estimating the replacement cost of the asset based on the cost of a market participant would incur to reconstruct a substitute asset of comparable utility. The MoneyLion trade name was valued using the Relief-from-Royalty method, which considers significant assumptions like long-term growth rates, royalty rates, discount rates, and probability of use. Financing In connection with our acquisition of MoneyLion, we entered into the Second Amendment to Amended and Restated Credit Agreement (the Second Amendment) with certain financial institutions to fund a portion of the cash consideration paid, in which they agreed to provide to us a $750 million Incremental Term B Facility, which matures on April 16, 2032. We incurred $9 million of debt issuance costs associated with the Incremental Term B Facility, which was capitalized and included in long-term debt in our Condensed Consolidated Balance Sheets. See Note 10 for further information about this debt instrument and the related debt covenants. Impact on operating results Our results of operations for the three months ended July 4, 2025 include $168 million of net revenues and $35 million of after-tax earnings attributable to MoneyLion beginning April 17, 2025. Additionally, we recognized transaction and integration costs of $4 million for the three months ended July 4, 2025. These costs were primarily associated with legal and professional services, which were expensed as incurred and included in general and administrative expenses in our Condensed Consolidated Statement of Operations. Unaudited pro forma information The following unaudited pro forma financial information represents the combined historical results for the three months ended July 4, 2025 and June 28, 2024, as if the acquisition had been completed on March 30, 2024, the first day of fiscal 2025. The results below include the impact of nonrecurring proforma adjustments, including amortization of acquired intangible assets, interest on debt issued to finance the acquisition, stock-based compensation related to awards issued in conjunction with the acquisition, acquisition-related transaction costs, and the income tax effect of other pro forma adjustments. The unaudited pro forma results do not include any anticipated synergies or other expected benefits of the acquisition. The following table summarizes the unaudited pro forma financial information:
| Three Months Ended
(In millions) | July 4, 2025 |  | June 28, 2024
Net revenues | $ | 1,289 |  |  | $ | 1,086 |
Net income (loss) | $ | 141 |  |  | $ | 162 |

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