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Business Combinations | 12 Months Ended
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Dec. 31, 2022
Business Combinations [Abstract] |
Business Combinations | Business Combinations PRA Health Sciences, Inc. Acquisition On July 1, 2021 (the "Merger Date"), the Company completed the Acquisition of PRA by means of a merger whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA Health Sciences, Inc., the parent of the PRA Health Sciences ("the Acquisition" and "the Merger"). The combined Group has retained the name ICON and brought together approximately 38,000 (as at the Merger date) employees across the globe, creating the world's largest clinical research organization with a singular focus on clinical research and commercialization. The Merger was accounted for as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The combined Company leverages its enhanced operations to transform clinical trials and accelerate biopharma customers’ commercial success through the development of much needed medicines and medical devices. The new ICON has a renewed focus on leveraging data, applying technology and accessing diverse patient populations to speed up drug development. Upon completion of the Merger, pursuant to the terms of the Merger Agreement, PRA became a wholly owned subsidiary of the ICON Group. Under the terms of the Merger, PRA shareholders received per share $80 in cash and 0.4125 shares of ICON stock. The trading of PRA common stock on NASDAQ was suspended prior to market open on July 1, 2021. In the years ended December 31, 2022 and 2021, the Company incurred Merger-related expenses of $39.7 million and $198.3 million, respectively, which were accounted for separately from the business combination and expensed as incurred within the “Transaction and integration related” line item of the Consolidated Statement of Operations. These costs consist primarily of investment banker fees, advisory fees, legal costs, accounting and consulting fees, share-based compensation expense, and employee retention bonuses. Included in transaction and integration costs in the years ended December 31, 2022 and 2021 are acquisition related costs (as defined by ASC 805) of $0.8 million and $57.1 million, respectively. The Company also incurred approximately $86.7 million of Merger-related financing fees which are included in the “Interest expense” line item in the Consolidated Statement of Operations for the year ended December 31, 2021. During the year ended December 31, 2021, the Company deferred $76.2 million of financing costs incurred as a result of the Senior Secured Credit Facility and Senior Secured Notes. These costs will be amortized over the term of the related debt. The Merger Date fair value of the consideration transferred consisted of the following:
| (in thousands)
Fair value of cash consideration | 5,308,646 |
Fair value of ordinary shares issued to acquiree stockholders | 5,658,126 |
Fair value of replacement share-based awards issued to acquiree employees | 209,399 |
Repayment of term loan obligations and accrued interest * | 865,800 |
| 12,041,971 |
* This represents the portion of PRA debt paid by ICON. PRA also paid $401.6 million from available cash to settle debt obligations that existed at the Merger Date. The following table summarizes the allocation of the consideration transferred based on the Merger Date fair values of assets acquired and liabilities assumed, with the excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill:
| July 1,
| 2021
| (in thousands)
Cash and cash equivalents | $ | 259,971 |
Accounts receivable and unbilled revenue | 934,308 |
Other current assets | 125,156 |
Fixed assets | 156,851 |
Operating lease right-of-use assets | 180,601 |
Goodwill * | 8,084,314 |
Intangible assets | 4,919,000 |
Deferred tax assets | 25,190 |
Other assets | 33,928 |
Accounts payable | (50,259) |
Accrued expenses and other current liabilities | (380,048) |
Current portion of operating lease liabilities | (36,506) |
Unearned revenue | (739,278) |
Non-current portion of operating lease liabilities | (147,204) |
Deferred tax liabilities | (1,119,762) |
Other non-current liabilities | (204,291) |
Net assets acquired | $ | 12,041,971 |
* The goodwill in connection with the Merger is primarily attributable to the assembled workforce of PRA and the expected synergies of the Merger. None of the goodwill recognized is deductible for income tax purposes. The following table summarizes the fair value of identified intangible assets and their respective useful lives as of the Merger Date (in thousands, except for estimated useful lives):
| Estimated Fair Value | Estimated Useful Life
Customer relationships | 3,938,000 |  | 23 years
Order backlog | 500,000 |  | 3 years
Trade names | 202,000 |  | 3 years
Patient database | 168,000 |  | 7 years
Technology assets | 111,000 |  | 5 years
| 4,919,000 |  |
At June 30, 2022, the Company completed its review of the July 1, 2021 acquisition balance sheet of PRA and completed the final valuation associated with certain assets acquired and liabilities assumed. In the period since the Merger Date, the Company recognized certain measurement period adjustments as shown in the table below:
| Measurement period adjustments
| (in thousands)
Cash and cash equivalents | $ | — |
Accounts receivable and unbilled revenue | — |
Other current assets | 14,465 |
Fixed assets | (6,137) |
Operating lease right-of-use assets | (11,744) |
Goodwill | 70,436 |
Intangible assets * | 44,000 |
Deferred tax assets | (147,039) |
Other assets | (1,166) |
Accounts payable | — |
Accrued expenses and other current liabilities | (37,496) |
Current portion of operating lease liabilities | 1,865 |
Unearned revenue ** | 19,623 |
Non-current portion of operating lease liabilities | 10,454 |
Non-current deferred tax liabilities | 193,837 |
Other non-current liabilities | (151,098) |
* In the year ended December 31, 2022, the Company incurred $2.2 million amortization which related to the year ended December 31, 2021 due to the timing of when the measurement period adjustment was identified. ** The unearned revenue measurement period adjustment also includes $16.0 million as a result of the early adoption of ASU 2021-08 'Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers' in Quarter 4 2021.

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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 https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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