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Business Combinations
 12 Months Ended
Mar. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Business Combinations Business Combinations
Curative Talent Acquisition
On April 1, 2020, the Company completed the acquisition of THMED, LLC (subsequently renamed Curative Talent, LLC, “Curative”), which was accounted for as a business combination. Curative provides temporary and permanent healthcare staffing services to hospitals, medical groups, and other healthcare facilities across the United States. The acquisition-date fair value of the consideration transferred was $34.7 million, consisting of $33.6 million in cash and 689,656 shares of common stock valued at $1.1 million. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill as shown below. The purchase consideration allocation was as follows (in thousands):
Assets acquired:
Cash and cash equivalents$1,972 
Accounts receivable4,075 
Other assets1,503 
Customer relationships10,280 
Total assets acquired$17,830 
Liabilities assumed:
Accounts payable and accrued liabilities$2,030 
Net assets acquired, excluding goodwill15,800 
Goodwill$18,915 
Total purchase consideration$34,715 
Goodwill represents the future benefits as a result of the acquisition that will enhance the Company’s product available to both new and existing customers and increase the Company’s competitive position. Goodwill is deductible for income tax purposes.
The Company’s acquisition-related costs were $1.2 million and were recorded as general and administrative expense in the Company’s consolidated statements of operations during the fiscal year ended March 31, 2020.
Intangible assets acquired are comprised of customer relationships with an estimated useful life of 10 years. The fair value assigned to the customer relationship was determined primarily using the multiple period excess earnings method cost approach, which estimates the direct cash flows expected to be generated from the existing customers acquired. The results of operations of this business combination have been included in the Company’s consolidated financial statements from the acquisition date.
In October 2020, the Company sold a portion of Curative Talent’s business for total consideration of $4.7 million, of which $4.2 million has been received in cash and the remaining $0.5 million was held in escrow, subject to standard representations
and warranties. The net assets of this business were not material. The Company recognized a gain on sale for the total consideration during the fiscal year ended March 31, 2021 as a result of this sale.
AMiON Acquisition
On April 1, 2022, the Company completed the acquisition of the assets of the AMiON on-call scheduling and messaging application used by scheduling staff and physicians (“the AMiON acquisition”) to further expand our physician cloud platform. The acquisition-date fair value of the consideration was $74.6 million, consisting of $53.5 million in cash and $21.1 million in fair value of contingent earn-out consideration.
Under the definitive agreement for the AMiON acquisition, the Company will pay contingent earn-out consideration of up to $24.0 million, of which $4.0 million is a minimum guarantee and the remaining $20.0 million is subject to the achievement of certain operational performance metrics over the next four years. The contingent earn-out consideration is payable in cash in annual installments over the next four years, with approximately $6.0 million settled in the first quarter of fiscal 2024. The contingent earn-out consideration is classified as a liability, the short-term portion of which is included in accrued expenses and other current liabilities and the long-term portion is in contingent earn-out consideration liability, non-current in the consolidated balance sheets. See Note 5—Fair Value Measurements for additional information regarding the valuation of the contingent earn-out consideration liability.
Additionally, in May 2022, 93,458 RSUs with a grant date fair value of $32.99 per share were granted to the eligible employees joining the Company in connection with the AMiON acquisition. The shares will vest on a quarterly basis over four years based on continued service. The aggregate grant date fair value of these RSUs is accounted for as post-acquisition stock-based compensation expense and is recognized on a straight-line basis over the requisite service period.
The AMiON acquisition was accounted for as a business combination. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill as shown below. The purchase consideration allocation was as follows (in thousands):
Assets acquired:
Accounts receivable$447 
Customer relationships27,200 
Developed technology820 
Trademark700 
Total assets acquired$29,167 
Liabilities assumed:
Deferred revenue$2,925 
Other liabilities633 
Net assets acquired, excluding goodwill25,609 
Goodwill$49,025 
Total purchase consideration$74,634 
Goodwill generated from the AMiON acquisition represents the future benefits from the development of future customer relationships and the assembled workforce. Goodwill from this business combination is deductible for income tax purposes.
Intangible assets acquired are comprised of customer relationships, trademarks, and developed technology with estimated useful lives of 9 years, 3 years, and 18 months, respectively. The fair value assigned to the customer relationships was determined primarily using the multiple period excess earnings method cost approach, which estimates the direct cash flows expected to be generated from the existing customers acquired. The results of operations of this business combination have been included in the consolidated financial statements from the acquisition date.
The acquisition-related costs were not material and were recorded as general and administrative expense in the consolidated statements of operations.
Separate operating results and pro forma results of operations for AMiON have not been presented as the effect of this acquisition was not material to the Company’s financial results.