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Acquisitions | 12 Months Ended
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Jun. 30, 2014
Business Combinations [Abstract] |
Acquisitions | ACQUISITIONS GXS Group, Inc. On January 16, 2014, we acquired GXS Group, Inc. (GXS), a Delaware corporation and leader in cloud-based, business-to-business (B2B) integration. The acquisition combines OpenText's Information Exchange portfolio with GXS' portfolio of B2B integration services and managed services. Total consideration for GXS was $1.2 billion, inclusive of the issuance of 2,595,042 OpenText Common Shares on a post stock-split basis. In accordance with Topic 805, this acquisition was accounted for as a business combination. The results of operations of GXS have been consolidated with those of OpenText beginning January 16, 2014. The following tables summarize the preliminary consideration paid for GXS and the amount of the assets acquired and liabilities assumed, as well as the preliminary goodwill recorded as of the acquisition date:
Cash consideration paid | $ | 1,101,268 |
Equity consideration paid | 116,777 |
Other amounts currently held back and unpaid | 606 |
Preliminary purchase consideration | $ | 1,218,651 |
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for the year ended June 30, 2014 | $ | 7,120 |
As set forth in the purchase agreement, $60.0 million of the total cash consideration paid is currently being held by an escrow agent for indemnification purposes. Subject to certain conditions being met, this consideration will be released to the former equity holders of GXS in the amount of $30.0 million nine months from the date of acquisition, and the remaining amount on the final release date in January 2016. Preliminary Purchase Price Allocation The preliminary purchase price of GXS has been allocated to GXS' tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated fair values as of the acquisition date. For certain assets and liabilities, the book values as of the balance sheet date have been determined to reflect fair values. The excess of the purchase price over the net tangible and identifiable intangible assets has been recorded as goodwill. The preliminary allocation of the purchase price was based upon a preliminary valuation and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). Our preliminary purchase price allocation for GXS is as follows:
Current assets (inclusive of cash acquired of $24,382) | $ | 127,406 |
Non-current tangible assets | 31,604 |
Intangible customer assets | 364,600 |
Intangible technology assets | 123,200 |
Liabilities and non-controlling interest assumed | (124,399 | )
Total identifiable net assets | 522,411 |
Goodwill | 696,240 |
Net assets acquired | $ | 1,218,651 |
The finalization of the above purchase price allocation is pending the determination of the finalization of the fair value for taxation-related balances and for potential unrecorded liabilities. We expect to finalize this determination on or before December 31, 2014. No portion of the goodwill recorded upon the acquisition of GXS is expected to be deductible for tax purposes. The fair value of current assets acquired includes accounts receivable with a fair value of $94.3 million. The gross amount receivable was $108.2 million of which $13.9 million of this receivable was expected to be uncollectible. The amount of GXS’ revenues and net income included in our Consolidated Statements of Income for the year ended June 30, 2014 is set forth below:
|  | January 16, 2014— June 30, 2014
Revenues |  | $ | 211,271 |
Net income |  | $ | 8,703 |
The unaudited pro forma revenues and net income of the combined entity for the year ended June 30, 2014 and 2013, respectively, had the acquisition been consummated as of July 1, 2012, are set forth below:
|  | Year Ended June 30,
|  | 2014 |  | 2013
Supplemental Unaudited Pro forma Information |  |  |  |
Total revenues |  | $ | 1,890,794 |  |  | $ | 1,850,658 |
Net income* |  | $ | 195,075 |  |  | $ | 131,929 |
* Included in unaudited pro forma net income for the year ended June 30, 2014 are estimated amortization charges relating to the allocated values of intangible assets, estimated interest expense as though the incurrence of debt used to finance the acquisition occurred on July 1, 2012. Excluded from unaudited pro forma net income for the year ended June 30, 2014 are $69.0 million of one-time expenses incurred by GXS on account of the acquisition. These one-time expenses include a) approximately $29.0 million in employee change in control payments, b) approximately $32.0 million of interest expense on account of penalties incurred on the early extinguishment of GXS’ debt, as part of the purchase agreement, and c) approximately $8.0 million of transaction fees triggered by the closing of the acquisition. The unaudited pro forma financial information in the table above is presented 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 the periods presented or the results that may be realized in the future. Cordys Holding B.V. On August 15, 2013, we acquired Cordys Holding B.V. (Cordys), a leading provider of Business Process Management (BPM) and case management solutions, offered on one platform with cloud, mobile, and social capabilities, based in Putten, the Netherlands. Total consideration for Cordys was $33.2 million paid in cash ($30.6 million - net of cash acquired). In accordance with Topic 805, this acquisition was accounted for as a business combination. Acquisition-related costs for Cordys included in Special charges in the Consolidated Statements of Income for the year ended June 30, 2014 were $0.9 million. The results of operations of Cordys have been consolidated with those of OpenText beginning August 15, 2013. The acquisition had no significant impact on revenues and net income for the year ended June 30, 2014. There was also no significant impact on the Company's revenues and net income on a pro forma basis for all periods presented. Fiscal 2013 EasyLink Services International Corporation On July 2, 2012, we acquired EasyLink Services International Corporation (EasyLink), a global provider of cloud-based electronic messaging and business integration services, based in Atlanta, Georgia. The acquisition extends our product offerings as we continue to evolve in the Enterprise Information Management market category. Total consideration for EasyLink was $342.3 million, paid in cash. In accordance with Topic 805, this acquisition was accounted for as a business combination. The results of operations of EasyLink have been consolidated with those of OpenText beginning July 2, 2012. The following tables summarize the consideration paid for EasyLink and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date:
Cash consideration paid | $ | 342,272 |
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for the year ended June 30, 2013 | $ | 1,850 |
The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 2, 2012, are set forth below:
Current assets (inclusive of cash acquired of $26,941) | $ | 74,560 |
Non-current assets | 35,024 |
Intangible customer assets | 126,600 |
Intangible technology assets | 70,500 |
Total liabilities assumed | (148,028 | )
Total identifiable net assets | 158,656 |
Goodwill | 183,616 |
| $ | 342,272 |
No portion of the goodwill recorded upon the acquisition of EasyLink is expected to be deductible for tax purposes. Included within current assets were accounts receivable of $26.2 million at July 2, 2012. This amount has been substantially collected as of June 30, 2013. The amount of EasyLink’s revenues and net income included in our Consolidated Statements of Income for the year ended June 30, 2013, and the unaudited pro forma revenues and net income of the combined entity, had the acquisition been consummated as of July 1, 2011, are set forth below:
|  | July 2, 2012— June 30, 2013
Revenues |  | $ | 171,569 |
Net Income |  | $ | 10,288 |
|  | Year Ended June 30,
|  | 2012
Supplemental Unaudited Pro forma Information |  |
Total revenues |  | $ | 1,389,132 |
Net income* |  | $ | 151,369 |
*Included in unaudited pro forma net income are estimated amortization charges relating to the allocated values of intangible assets. In addition, for the year ended June 30, 2012, pro forma net income includes a $44.6 million tax recovery relating to certain one-time tax benefits and a charge of $21.3 million for acquisition related costs and pre-acquisition accounting adjustments. The unaudited pro forma financial information in the table above is presented 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 the period presented or the results that may be realized in the future. Other Fiscal 2013 Acquisitions During Fiscal 2013, we acquired certain other companies and purchased certain technology and customer assets to expand our product and service offerings. These acquisitions were not significant individually or in the aggregate. Fiscal 2012 Global 360 Holding Corp. (Global 360) On July 13, 2011, we acquired Global 360, a software company based in Dallas, Texas. Global 360 offers case management and document-centric business process management (BPM) solutions. The acquisition of Global 360 for $256.6 million in cash adds complementary BPM software to our ECM Suite. In accordance with Topic 805, this acquisition was accounted for as a business combination. The results of operations of Global 360 have been consolidated with those of OpenText beginning July 13, 2011. The following tables summarize the consideration paid for Global 360 and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date:
Cash consideration paid | $ | 256,597 |
Acquisition related costs (included in Special charges in the Consolidated Statements of Income) for the year ended June 30, 2012 | $ | 924 |
The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 13, 2011, are set forth below:
Current assets (inclusive of cash acquired of $10,944) | $ | 38,249 |  |
Non-current assets | 6,289 |  |
Intangible customer assets | 58,100 |  |
Intangible technology assets | 40,600 |  |
Total liabilities assumed | (88,575 | ) | *
Total identifiable net assets | 54,663 |  |
Goodwill | 201,934 |  |
| $ | 256,597 |  |
* Included in total liabilities assumed is approximately $24.3 million of deferred revenue. No portion of the goodwill recorded upon the acquisition of Global 360 is expected to be deductible for tax purposes. Included within current assets were accounts receivable of $11.9 million at July 13, 2011. This amount has been substantially collected as of June 30, 2012. The amount of Global 360’s revenues and net income included in our Consolidated Statements of Income for the year ended June 30, 2012, and the unaudited pro forma revenues and net income of the combined entity, had the acquisition been consummated as of July 1, 2010, are set forth below:
|  | July 13, 2011— June 30, 2012
Revenues |  | $ | 74,900 |
Net Income* |  | N/A |
|  | Year ended June 30,
|  | 2012 |  | 2011
Supplemental Unaudited Pro forma Information |  |  |  |
Total revenues |  | $ | 1,209,809 |  |  | $ | 1,125,366 |
Net income** |  | $ | 128,924 |  |  | $ | 107,636 |
*During the quarter ended June 30, 2012, Global 360 became substantially integrated into our operations and financial results, to the extent that it is no longer practicable to separately identify expenses and net income that are attributed solely from this acquisition. **Included in unaudited pro forma net income are estimated amortization charges relating to the allocated values of intangible assets for all periods reported above. The unaudited pro forma financial information in the table above is presented 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 the period presented or the results that may be realized in the future. Other Fiscal 2012 Acquisitions During Fiscal 2012, we acquired certain other companies and purchased certain technology and customer assets to expand our product and service offerings. These acquisitions were not significant individually or in the aggregate.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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