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Acquisitions
 12 Months Ended
Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract]  
Acquisitions AcquisitionsFor the years ended December 31, 2021, 2020, and 2019, the Company completed a number of acquisitions, for an aggregate purchase price of $1,269,844, $102,094, and $41,075, 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 $883,336 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
Year Ended December 31,
202120202019
Number of acquisitions13 6 4 
Cash paid at closing (1)
$1,072,820 $98,298 $36,577 
Cash acquired(37,837)(5,266)(2,523)
Net cash paid$1,034,983 $93,032 $34,054 
(1)Of the cash paid at closing for the year ended December 31, 2021, $8,701 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:
December 31,
20212020
Accruals and other current liabilities$5,382 $2,884 
Other liabilities1,231 1,415 
Contingent consideration from acquisitions$6,613 $4,299 
The fair value of non-contingent consideration from acquisitions is included in the consolidated balance sheets as follows:
December 31,
20212020
Accruals and other current liabilities$4,751 $685 
Other liabilities6,177 1,774 
Non-contingent consideration from acquisitions$10,928 $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.
As discussed in Note 2, the Company early adopted ASU 2021‑08 effective January 1, 2021. In connection with the purchase price allocations related to the Company’s acquisitions that closed prior to 2021, the Company estimated the fair values of the support obligations assumed relative to acquired deferred revenues. 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 years ended December 31, 2021, 2020, and 2019, the fair value adjustments to reduce revenue related to acquisitions that closed prior to 2021 were $32, $599, and $553, respectively.The Company finalized the purchase accounting for acquisitions completed through the year ended December 31, 2021.Acquisition costs are expensed as incurred and are recorded in General and administrative in the consolidated statements of operations. For the years ended December 31, 2021, 2020, and 2019, the Company incurred acquisition expenses of $20,471, $2,227, and $950, respectively, which include costs related to legal, accounting, valuation, insurance, general administrative, and other consulting fees. For the year ended December 31, 2021, $16,557 of the Company’s acquisition expenses 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
Year Ended December 31,
202120202019
Consideration:
Cash paid at closing$1,072,820 $98,298 $36,577 
Shares issued at closing (1)(2)
182,390 — — 
Contingent consideration4,544 2,380 4,498 
Deferred, non-contingent consideration, net10,090 1,416 — 
Total consideration$1,269,844 $102,094 $41,075 
Assets acquired and liabilities assumed:
Cash$37,837 $5,266 $2,523 
Accounts receivable and other current assets24,174 8,701 1,782 
Operating lease right-of-use assets12,095 2,529 — 
Property and equipment4,383 499 411 
Other assets874 36 84 
Software and technology (weighted average useful life of 5, 3, and 3 years, respectively)
43,560 2,207 2,423 
Customer relationships (weighted average useful life of 9, 6, and 7 years, respectively)
158,555 11,371 6,534 
Trademarks (weighted average useful life of 10, 7 and 5 years, respectively)
38,256 3,953 1,431 
Non-compete agreement (useful life of 5 years)
— 200 150 
In-process research and development3,700 — — 
Total identifiable assets acquired excluding goodwill323,434 34,762 15,338 
Accruals and other current liabilities(27,649)(4,991)(3,538)
Deferred revenues(26,245)(5,351)(2,897)
Operating lease liabilities(11,988)(2,529)— 
Deferred income taxes(53,342)(1,701)(1,869)
Other liabilities(716)(86)— 
Total liabilities assumed(119,940)(14,658)(8,304)
Net identifiable assets acquired excluding goodwill203,494 20,104 7,034 
Goodwill1,066,350 81,990 34,041 
Net assets acquired$1,269,844 $102,094 $41,075 
(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 (see Note 15).
(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 related to the Company’s acquisitions that closed prior to 2021 were determined using the cost‑build‑up approach. The fair values of deferred revenues related to the Company’s acquisitions that closed during 2021 were determined in accordance with Topic 606 (see Note 3).
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 December 31, 2021, $18,534 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 years ended December 31, 2021 and 2020 would have been $1,017,975 and $877,584, respectively. Net income, net income per share, basic, and net income per share, diluted for the years ended December 31, 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.
Acquisition Subsequent to December 31, 2021
On January 31, 2022, the Company completed the acquisition of Power Line Systems, a leader in software for the design of overhead electric power transmission lines and their structures, for approximately $700,000 in cash, net of cash acquired, and subject to customary adjustments including for working capital. The Company used readily available cash and borrowings under its bank credit facility (see Note 10) to fund the transaction. The acquisition is not expected to be material to the Company’s consolidated statements of operations. The acquisition is expected to be material to the Company’s financial position and cash flows.