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Business Combinations | 12 Months Ended
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Mar. 31, 2024
Business Combination and Asset Acquisition [Abstract] |
Business Combinations | Business Combinations Rookout, Ltd. On August 31, 2023, the Company acquired 100% of the outstanding equity of Rookout, Ltd. (“Rookout”). Rookout is a provider of enterprise-ready and privacy-aware solutions that enable developers to troubleshoot and debug actively running code in Kubernetes-hosted cloud-native applications. This acquisition expanded the Company’s unified observability and security platform from the addition of Rookout’s technology and experienced team. The purchase consideration of Rookout was $33.4 million, after considering certain adjustments, and was paid from cash on hand. The fair value of the purchase price was allocated to the identifiable assets acquired and liabilities assumed as of the acquisition date, with the excess recorded to goodwill as shown below (in thousands).
Assets acquired: |
Cash and cash equivalents | $ | 1,152 |
Accounts receivable, prepaid and other assets | 342 |
Property and equipment | 46 |
Intangible asset | 7,800 |
Total assets acquired | $ | 9,340 |
Liabilities assumed: |
Accounts payable, accrued and other liabilities | 2,242 |
Deferred revenue | 1,064 |
Total liabilities assumed | $ | 3,306 |
Net assets acquired | 6,034 |
Fair value of consideration transferred | 33,407 |
Goodwill | $ | 27,373 |
These preliminary amounts are subject to subsequent adjustment as additional information is obtained to finalize certain components of working capital and deferred income taxes. Goodwill is primarily attributable to expected synergies and acquired skilled workforce. The goodwill was allocated to the Company’s one reporting unit. The Company identified developed technology as the sole acquired intangible asset. The estimated fair value of the developed technology was $7.8 million, which was based on a valuation using the income approach and was classified as capitalized software on the consolidated balance sheet. The estimated useful life of the developed technology is seven years. The acquired goodwill and intangible asset were not deductible for tax purposes. The operating results of Rookout from the date of acquisition have been included in the Company’s consolidated statements of operations. The revenue and net loss attributable to Rookout for the year ended March 31, 2024 was not material. The transaction costs related to the Rookout acquisition were $2.9 million for the year ended March 31, 2024 and are included in general and administrative expense on the consolidated statements of operations. Runecast Solutions Limited On March 1, 2024, the Company acquired a 100% equity interest in Runecast Solutions Limited (“Runecast”). Runecast is a provider of software solutions that provide insights for security compliance, vulnerability assessment, and configuration management for complex, on-premises, hybrid and multi-cloud IT environments. This acquisition expanded the Company’s unified observability and security platform from the addition of Runecast’s technology and experienced team. The preliminary purchase consideration consisted of $26.1 million cash paid at closing and $2.3 million in deferred cash payments. The deferred cash payments will be held by the Company to satisfy indemnification obligations and post-closing purchase price adjustments payable within 15 months after the acquisition date. In connection with the acquisition of Runecast, per the purchase agreement, $9.0 million of RSAs will be issued to the previous owners subject to continuing employment and certain indemnification clauses. The RSAs are considered share-based compensation expense and $0.3 million was recognized in fiscal 2024. The fair value of the purchase price was allocated to the identifiable assets acquired and assumed acquired as of the acquisition date, with the excess recorded to goodwill as shown below (in thousands).
Assets acquired: |
Cash and cash equivalents | $ | 1,224 |
Accounts receivable, prepaid and other assets | 883 |
Property and equipment | 50 |
Intangible assets | 7,500 |
Other non-current assets | 436 |
Total assets acquired | $ | 10,093 |
Liabilities assumed: |
Accounts payable, accrued and other liabilities | 582 |
Deferred revenue | 5,132 |
Other non-current liabilities | 1,229 |
Total liabilities assumed | $ | 6,943 |
Net assets acquired | 3,150 |
Fair value of consideration transferred | 28,390 |
Goodwill | $ | 25,240 |
The preliminary fair value of assets acquired and liabilities assumed may change as additional information is received during the measurement period. Goodwill is primarily attributable to expected synergies and acquired skilled workforce. The goodwill was allocated to the Company’s one reporting unit. The Company identified developed technology and customer relationships as the acquired intangible assets. The estimated fair value of the developed technology and customer relationships was $7.3 million and $0.2 million, respectively, which was based on a valuation using the income approach. The estimated useful lives of the developed technology and customer relationships is seven years and four years, respectively. The acquired goodwill and intangible assets were not deductible for tax purposes. The operating results of Runecast from the date of acquisition have been included in the Company’s consolidated statements of operations. The revenue and net loss attributable to Runecast for the year ended March 31, 2024 was not material. The transaction costs related to the Runecast acquisition were $3.0 million for the year ended March 31, 2024 and are included in the general and administrative expense on the consolidated statement of operations. Fiscal 2022 Acquisitions In fiscal 2022, the Company completed acquisitions of entities for total cash consideration, net of cash acquired, of $13.2 million. As a result, the Company recognized goodwill of $11.0 million and intangible assets of $2.6 million related to technology with an estimated useful life of nine years. Goodwill generated from the acquisitions was attributable to increased synergies that are expected to be achieved from the integration of the acquired developed technology into the Dynatrace platform, and was not deductible for tax purposes. The results of operations of the acquired entities have been included within the Company’s consolidated statements of operations from the acquisition date. The acquisitions were not material to the consolidated financial statements. The allocated purchase price of the acquisitions were finalized during fiscal 2023.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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