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Acquisitions | 6 Months Ended
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Jun. 30, 2021
Business Combinations [Abstract] |
Acquisitions | Acquisitions For the six months ended June 30, 2021 and the year ended December 31, 2020, the Company completed a number of acquisitions, for an aggregate purchase price of $1,236,372 and $102,094, respectively. On June 17, 2021, the Company completed the acquisition of Seequent, a leader in software for geological and geophysical modeling, geotechnical stability, and cloud services for geodata management and collaboration, for $910,997 in cash, net of cash acquired, plus 3,141,342 shares of the Company’s Class B Common Stock. The operating results of the acquired businesses, except for Seequent, were not material, individually or in the aggregate, to the Company’s consolidated statements of operations and financial position. The aggregate details of the Company’s acquisition activity are as follows:
| Acquisitions Completed in
| Six Months Ended |  | Year Ended
| June 30, 2021 |  | December 31, 2020
Number of acquisitions | 8 |  |  | 6 |
Cash paid at closing (1) | $ | 1,039,398 |  |  | $ | 98,298 |
Cash acquired | (36,847) |  |  | (5,266) |
Net cash paid | $ | 1,002,551 |  |  | $ | 93,032 |
(1)Of the cash paid at closing for the six months ended June 30, 2021, $5,250 was deposited into an escrow account to secure any potential indemnification and other obligations of the seller. The fair value of the contingent consideration from acquisitions is included in the consolidated balance sheets as follows:
| June 30, 2021 |  | December 31, 2020
Accruals and other current liabilities | $ | 6,561 |  |  | $ | 2,884 |
Other liabilities | 2,167 |  |  | 1,415 |
Contingent consideration from acquisitions | $ | 8,728 |  |  | $ | 4,299 |
The fair value of non-contingent consideration from acquisitions is included in the consolidated balance sheets as follows:
| June 30, 2021 |  | December 31, 2020
Accruals and other current liabilities | $ | 5,952 |  |  | $ | 685 |
Other liabilities | 6,986 |  |  | 1,774 |
Non-contingent consideration from acquisitions | $ | 12,938 |  |  | $ | 2,459 |
The operating results of the acquired businesses are included in the Company’s consolidated financial statements from the closing date of each respective acquisition. The purchase price for each acquisition has been allocated to the net tangible and intangible assets and liabilities based on their estimated fair values at the respective acquisition date. In connection with the purchase price allocations related to the Company’s acquisitions, the Company has estimated the fair values of the support obligations assumed relative to acquired deferred revenue. The estimated fair values of the support obligations assumed were determined using a cost‑build‑up approach. The cost‑build‑up approach determines fair value by estimating the costs related to fulfilling the obligations plus a normal profit margin. These fair value adjustments reduce the revenues recognizable over the remaining support contract term of the Company’s acquired contracts. For the three months ended June 30, 2021 and 2020, the fair value adjustments to reduce revenue were $998 and $79, respectively, and $1,010 and $195 for the six months ended June 30, 2021 and 2020, respectively. The purchase accounting for the eight acquisitions completed for the six months ended June 30, 2021 are not yet completed. Identifiable assets acquired and liabilities assumed were provisionally recorded at their estimated fair values on the respective acquisition date. The initial accounting for these business combinations is not complete because the evaluation necessary to assess the fair values of certain net assets acquired is still in process. The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The allocation of the purchase price may be modified from the date of the acquisition as more information is obtained about the fair values of assets acquired and liabilities assumed, however such measurement period cannot exceed one year. Acquisition and integration costs are expensed as incurred and are recorded in General and administrative in the consolidated statements of operations. For the three months ended June 30, 2021 and 2020, the Company incurred acquisition and integration costs of $10,233 and $265, respectively, and $17,094 and $1,078 for the six months ended June 30, 2021 and 2020, respectively, which include costs related to legal, accounting, valuation, general administrative, and other consulting fees. For the three and six months ended June 30, 2021, $9,180 and $15,896, respectively, of the Company’s acquisition and integration costs related to the acquisition of Seequent. The following summarizes the fair values of the assets acquired and liabilities assumed, as well as the weighted average useful lives assigned to acquired intangible assets at the respective date of each acquisition (including contingent consideration):
| Acquisitions Completed in |  |
| Six Months Ended |  | Year Ended |  |
| June 30, 2021 |  | December 31, 2020 |  |
Consideration: |  |  |  |  |
Cash paid at closing | $ | 1,039,398 |  |  | $ | 98,298 |  |  |
Shares issued at closing (1)(2) | 182,390 |  |  | — |  |  |
Contingent consideration | 4,991 |  |  | 2,380 |  |  |
Deferred, non-contingent consideration, net | 9,593 |  |  | 1,416 |  |  |
Total consideration | $ | 1,236,372 |  |  | $ | 102,094 |  |  |
Assets acquired and liabilities assumed: |  |  |  |  |
Cash | $ | 36,847 |  |  | $ | 5,266 |  |  |
Prepaid and other current assets | 21,594 |  |  | 8,701 |  |  |
Operating lease right-of-use assets | 12,418 |  |  | 2,529 |  |  |
Property and equipment | 6,310 |  |  | 499 |  |  |
Investments | 2,211 |  |  | — |  |  |
Other assets | 523 |  |  | 36 |  |  |
Software and technology (weighted average useful life of 5 and 3 years, respectively) | 44,735 |  |  | 2,207 |  |  |
Customer relationships (weighted average useful life of 9 and 6 years, respectively) | 140,299 |  |  | 11,371 |  |  |
Trademarks (weighted average useful life of 10 and 7 years, respectively) | 41,417 |  |  | 3,953 |  |  |
Non-compete agreement (useful life of 5 years) | — |  |  | 200 |  |  |
In-process research and development | 4,300 |  |  | — |  |  |
Total identifiable assets acquired excluding goodwill | 310,654 |  |  | 34,762 |  |  |
Accruals and other current liabilities | (24,580) |  |  | (4,991) |  |  |
Deferred revenues | (16,041) |  |  | (5,351) |  |  |
Operating lease liabilities | (12,336) |  |  | (2,529) |  |  |
Deferred income taxes | (54,142) |  |  | (1,701) |  |  |
Other liabilities | (895) |  |  | (86) |  |  |
Total liabilities assumed | (107,994) |  |  | (14,658) |  |  |
Net identifiable assets acquired excluding goodwill | 202,660 |  |  | 20,104 |  |  |
Goodwill | 1,033,712 |  |  | 81,990 |  |  |
Net assets acquired | $ | 1,236,372 |  |  | $ | 102,094 |  |  |
(1)Of the total 3,141,342 shares issued at closing, 83,627 shares are subject to forfeiture if post‑closing employment service conditions are not met. Accordingly, $5,452 is being recorded as stock‑based compensation expense over the related forfeiture period of two years. (2)A fair value adjustment of $16,943 was applied to the stock consideration due to restrictions on the transfer of securities. The fair values of the working capital, other assets (liabilities), and property and equipment approximated their respective carrying values as of the acquisition date. As discussed above, the fair values of deferred revenues were determined using the cost‑build‑up approach. The fair values of the intangible assets were primarily determined using the income approach. When applying the income approach, indications of fair values were developed by discounting future net cash flows to their present values at market‑based rates of return. The cash flows were based on estimates used to price the acquisitions and the discount rates applied were benchmarked with reference to the implied rate of return from the Company’s pricing model and the weighted average cost of capital. Goodwill recorded in connection with the acquisitions was attributable to synergies expected to arise from cost saving opportunities, as well as future expected cash flows. Of the goodwill recorded as of June 30, 2021, $16,606 is expected to be deductible for tax purposes. Unaudited Pro Forma Financial Information Had the acquisition of Seequent been made at the beginning of 2020, unaudited pro forma total revenues for the three months ended June 30, 2021 and 2020 would have been $241,762 and $199,339, respectively, and $497,545 and $419,180 for the six months ended June 30, 2021 and 2020, respectively. Net income, net income per share, basic, and net income per share, diluted for the three and six months ended June 30, 2021 and 2020 would not have been materially different than the amounts reported primarily due to the pro forma adjustments to reflect the amortization of purchased intangibles and the cost to finance the transaction, net of the related tax effects. The unaudited pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2020. The unaudited pro forma financial information combines the historical results of the Company, the adjusted historical results of Seequent considering the date the Company completed the acquisition of Seequent, and the effects of the pro forma adjustments described above. Acquisitions Subsequent to June 30, 2021 In July 2021, the Company completed two acquisitions. The acquisitions are not expected to be material to the Company’s consolidated statements of operations and financial position.

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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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