Business Combinations

9 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

On October 4, 2021 ("the Acquisition Date"), the Company completed a tender offer process resulting in the Company's acquisition of approximately 90% of GCA Corporation's (“GCA”) common stock for cash consideration of $531.9 million. The Company then acquired the GCA shares not purchased through the tender offer by way of a second-step transaction, which occurred on November 5, 2021 for $57.7 million. The consideration for these shares was paid on January 20, 2022. This all-cash transaction was valued at approximately $589.6 million, based on the consideration of ¥1,398 per share of GCA.

GCA is a global technology-focused investment bank providing M&A advisory and capital markets advisory services in Europe, Japan/Asia, and the United States. The addition of GCA significantly increases the Company's position in the technology sector, which is critical to meeting the needs of our clients as technology increasingly touches every business sector. GCA also increases the depth and breadth of our UK and European operations and this significant increase in scale has a direct impact on our ability to better serve our clients, both corporate and private equity, and meaningfully expands our geographic footprint in the UK and Europe. GCA also creates a significant platform for us to build from in the Asia Pacific region, meaningfully increasing our presence there and allowing us to begin to reach for scale in this rapidly growing part of the world.


Acquisition Consideration
GCA common shares, including employee share-based payment awards outstanding, as of the Acquisition Date	49,382,808
Cash consideration per share	¥	1,398
Cash consideration for tendered common shares	$	531,883

Cash consideration for remaining shares purchased	57,686
Total cash consideration	$	589,569

The Company financed the acquisition with cash on hand.

Purchase Price Allocation

The following table summarizes the fair value of assets acquired and liabilities assumed as part of the GCA acquisition. We made significant estimates and exercised significant judgment in estimating fair values and accounting for such acquired assets and liabilities. The intangible assets subject to amortization will be amortized on a straight-line basis over their estimated useful lives as of the acquisition date. Measurement period adjustments recognized in the third quarter of fiscal 2023 related to updated estimated fair values for accounts receivable, income taxes payable and other liabilities. Measurement period adjustments recognized in the second quarter of fiscal 2023 related to updated estimated fair values for income taxes receivable/(payable) and deferred income taxes with no such adjustments recognized in the first quarter of fiscal 2023.


	Fair Value As Of September 30, 2022		Measurement Period Adjustments		Fair Value As Of December 31, 2022		Weighted-Average Amortization Period
Assets acquired:
Cash and cash equivalents	$	228,877	$	—	$	228,877
Investment securities	515		—		515
Accounts receivable	54,804		1,276		56,080
Unbilled work in progress	4,672		—		4,672
Income taxes receivable	—		—		—
Deferred income taxes	1,876		—		1,876
Property and equipment	8,727		—		8,727
Operating lease right-of-use assets	27,383		—		27,383

Other assets	20,506		—		20,506
Intangible assets other than goodwill
Backlog	42,000		—		42,000		1.2 years
Trade name	17,100		—		17,100		2.0 years
Customer relationships	15,200		—		15,200		1.0 year
Total intangible assets acquired	74,300		—		74,300		1.3 years
Total assets	421,660		1,276		422,936

Liabilities assumed:
Accrued salaries and bonuses	152,409		—		152,409
Accounts payable and accrued expenses	22,722		—		22,722
Payable to affiliates	15		—		15
Deferred income	78		—		78

Deferred income taxes	—		—		—
Income taxes payable	2,697		(407)		2,290
Operating lease liabilities	27,527		—		27,527
Other liabilities	19,897		2,750		22,647
Total liabilities	225,345		2,343		227,688
Net identifiable assets acquired	196,315		(1,067)		195,248
Goodwill	393,254		1,067		394,321
Total GCA equity value	$	589,569	$	—	$	589,569

We applied the acquisition method of accounting in accordance with Financial Accounting Standards Board ("FASB") ASC Topic 805, Business Combinations ("ASC 805"). Goodwill of $394.3 million was recognized as a result of the transaction and relates to (i) the value of assets that do not meet the definition of an identifiable intangible asset under ASC 805, but that do contribute to the value of the acquired business, including the assembled workforce and relationships with customers that are not tracked; (ii) the assemblage value associated with acquiring an on-going business whose value is worth more than simply the sum of its parts; and (iii) the expected synergies associated with combining global operations. None of the goodwill recognized is expected to be deductible for federal income tax purposes. The goodwill recognized is attributable to our CF business segment. The results of operations for GCA have been included in the Company's Consolidated Financial Statements since the Acquisition Date.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information is presented to illustrate the estimated effects of the acquisition of GCA on the Company as if it had occurred on April 1, 2020, the first day of the Company's fiscal 2021, and is not necessarily indicative of either future results of operations or results that may have been achieved had the acquisition been consummated as of this date. The below unaudited pro forma results include certain pro forma adjustments to net earnings that were directly attributable to the acquisition, as if the acquisition had occurred on April 1, 2020, including the following:

•Elimination of transaction costs incurred by the Company directly attributable to the GCA acquisition of $0 and $(5,436), for the three months ended December 31, 2022 and 2021, respectively, and $0 and $(6,513) for the nine months ended December 31, 2022 and 2021, respectively.

•A decrease of amortization expense of $(9,542) and $(12,117), for the three months ended December 31, 2022 and 2021, respectively, and $(38,848) and $(437) for the nine months ended December 31, 2022 and 2021, respectively, directly attributable to the GCA acquisition. This amortization was recognized as a result of the allocation of purchase consideration to the definite-lived intangible assets subject to amortization, noted above.

•Resulting tax impact of above adjustments of $2,347 and $5,266, for the three months ended December 31, 2022 and 2021, respectively, and $7,847 and $1,897 for the nine months ended December 31, 2022 and 2021, respectively.


	(Unaudited)
	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
Revenue	$	456,499	$	888,798	$	1,364,680	$	2,047,030
Net income	$	70,246	$	186,595	$	225,564	$	397,285