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Acquisitions | 12 Months Ended
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Jun. 30, 2019
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS Fiscal 2019 Acquisitions Catalyst Repository Systems Inc. On January 31, 2019, we acquired all of the equity interest in Catalyst for approximately $70.8 million in an all cash transaction. Catalyst is a leading provider of eDiscovery that designs, develops and supports market-leading cloud eDiscovery software. In accordance with ASC Topic 805 "Business Combinations" (Topic 805), this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our Enterprise Information Management (EIM) portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning January 31, 2019. Preliminary Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of January 31, 2019, are set forth below:
Current assets | $ | 9,699 |
Non-current tangible assets | 5,754 |
Intangible customer assets | 30,607 |
Intangible technology assets | 11,658 |
Liabilities assumed | (17,891 | )
Total identifiable net assets | 39,827 |
Goodwill | 30,973 |
Net assets acquired | $ | 70,800 |
The goodwill of approximately $31.0 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $3.1 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $0.8 million, which represents our estimate of the fair value of the contractual obligations assumed based on a preliminary valuation. In arriving at this fair value, we reduced the acquired company’s original carrying value by an insignificant amount. The fair value of current assets acquired includes accounts receivable with a fair value of $10.8 million. The gross amount receivable was $11.8 million, of which $1.0 million is expected to be uncollectible. Acquisition-related costs for Catalyst included in "Special charges (recoveries)" in the Consolidated Financial Statements for the year ended June 30, 2019 were $1 million. The acquisition had no significant impact on revenues or net earnings for the year ended June 30, 2019 since the date of acquisition. Pro forma results of operations for this acquisition have not been presented because they are not material to the consolidated results of operations. The finalization of the purchase price allocation is pending the finalization of the valuation of fair value for the assets acquired and liabilities assumed, including tax balances. We expect to finalize this determination on or before our quarter ending December 31, 2019. Liaison Technologies, Inc. On December 17, 2018, we acquired all of the equity interest in Liaison, a leading provider of cloud-based business to business integration, for approximately $310.6 million in an all cash transaction. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning December 17, 2018. Preliminary Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of December 17, 2018, are set forth below:
Current assets | $ | 23,006 |
Non-current tangible assets | 5,168 |
Intangible customer assets | 68,300 |
Intangible technology assets | 107,000 |
Liabilities assumed | (56,423 | )
Total identifiable net assets | 147,051 |
Goodwill | 163,592 |
Net assets acquired | $ | 310,643 |
The goodwill of approximately $163.6 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $2.2 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $7.6 million, which represents our estimate of the fair value of the contractual obligations assumed based on a preliminary valuation. In arriving at this fair value, we reduced the acquired company’s original carrying value by an insignificant amount. The fair value of current assets acquired includes accounts receivable with a fair value of $20.5 million. The gross amount receivable was $22.2 million, of which $1.7 million is expected to be uncollectible. Acquisition-related costs for Liaison included in "Special charges (recoveries)" in the Consolidated Financial Statements for the year ended June 30, 2019 were $3.7 million. The acquisition had no significant impact on revenues or net earnings for the year ended June 30, 2019 since the date of acquisition. Pro forma results of operations for this acquisition have not been presented because they are not material to the consolidated results of operations. The finalization of the purchase price allocation is pending the finalization of the valuation of fair value for the assets acquired and liabilities assumed, including tax balances. We expect to finalize this determination on or before our quarter ending December 31, 2019. Fiscal 2018 Acquisitions Acquisition of Hightail, Inc. (Hightail) On February 14, 2018, we acquired all of the equity interest in Hightail, a leading cloud service provider for file sharing and creative collaboration, for approximately $20.5 million in an all cash transaction. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning February 14, 2018. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of February 14, 2018, are set forth below:
Current assets | $ | 1,290 |
Non-current tangible assets | 1,270 |
Intangible customer assets | 12,900 |
Intangible technology assets | 4,200 |
Liabilities assumed | (6,418 | )
Total identifiable net assets | 13,242 |
Goodwill | 7,293 |
Net assets acquired | $ | 20,535 |
The goodwill of approximately $7.3 million is primarily attributable to the synergies expected to arise after the acquisition. No portion of this goodwill is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $5.2 million, which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by $2.0 million. The fair value of current assets acquired includes accounts receivable with a fair value of $0.7 million. The gross amount receivable was $0.8 million of which $0.1 million of this receivable is expected to be uncollectible. The finalization of the purchase price allocation during the year ended June 30, 2019 did not result in any significant changes to the preliminary amounts previously disclosed. Acquisition of Guidance Software, Inc. (Guidance) On September 14, 2017, we acquired all of the equity interest in Guidance, a leading provider of forensic security solutions, for approximately $240.5 million. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning September 14, 2017. The following tables summarize the consideration paid for Guidance and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date:
Cash consideration* | $ | 237,291 |
Guidance shares already owned by OpenText through open market purchases (at fair value) | 3,247 |
Purchase consideration | $ | 240,538 |
* Inclusive of $2.3 million previously accrued, but since paid as of September 30, 2018. See "Appraisal Proceedings" below for more information. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of September 14, 2017, are set forth below:
Current assets (inclusive of cash acquired of $5.7 million) | $ | 24,744 |
Non-current tangible assets | 11,583 |
Intangible customer assets | 71,230 |
Intangible technology assets | 51,851 |
Liabilities assumed | (48,670 | )
Total identifiable net assets | 110,738 |
Goodwill | 129,800 |
Net assets acquired | $ | 240,538 |
The goodwill of approximately $129.8 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $1.9 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $26.6 million, which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by $7.6 million. The fair value of current assets acquired includes accounts receivable with a fair value of $10.3 million. The gross amount receivable was $11.8 million of which $1.5 million of this receivable is expected to be uncollectible. An amount of $0.8 million, representing the mark to market gain on the shares we held in Guidance prior to the acquisition, was recorded to "Other income" in our Consolidated Statements of Income for the year ended June 30, 2018. The finalization of the purchase price allocation during the year ended June 30, 2019 did not result in any significant changes to the preliminary amounts previously disclosed. Appraisal Proceedings Under Section 262 of the Delaware General Corporation Law, shareholders who did not tender their shares in connection with our tender offer were entitled to have their shares appraised by the Delaware Court of Chancery and receive payment of the “fair value” of such shares. On August 31, 2017 we received notice from the record holder of approximately 1,519,569 shares or 5% of the issued and outstanding Guidance shares as of the date of acquisition, demanding an appraisal of the fair value of Guidance shares as they believed the price we paid for Guidance shares was less than its fair value. We accrued $10.8 million in connection with these claims, which is equivalent to paying $7.10 per Guidance share, the amount these Guidance shareholders otherwise would have received had they tendered their shares in our offer. During the second quarter of Fiscal 2018, we paid $8.5 million to the trust account of dissenting shareholders’ attorney, leaving $2.3 million previously accrued. During the three months ended September 30, 2018, these amounts were settled and released. On August 27, 2018, the appraisal petition was dismissed with prejudice. Acquisition of Covisint Corporation (Covisint) On July 26, 2017, we acquired all of the equity interest in Covisint, a leading cloud platform for building Identity, Automotive, and Internet of Things applications, for approximately $102.8 million in an all cash transaction. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning July 26, 2017. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 26, 2017, are set forth below:
Current assets (inclusive of cash acquired of $31.5 million) | $ | 41,586 |
Non-current tangible assets | 3,426 |
Intangible customer assets | 36,600 |
Intangible technology assets | 17,300 |
Liabilities assumed | (23,033 | )
Total identifiable net assets | 75,879 |
Goodwill | 26,905 |
Net assets acquired | $ | 102,784 |
The goodwill of approximately $26.9 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $26.8 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $12.2 million, which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by $4.6 million. The fair value of current assets acquired includes accounts receivable with a fair value of $7.8 million. The gross amount receivable was $7.9 million of which $0.1 million of this receivable was expected to be uncollectible. The finalization of the purchase price allocation was completed during Fiscal 2018 and did not result in any significant changes to the preliminary amounts previously disclosed. Fiscal 2017 Acquisitions Purchase of an Asset Group Constituting a Business - ECD Business On January 23, 2017, we acquired certain assets and assumed certain liabilities of the enterprise content division of EMC Corporation, a Massachusetts corporation, and certain of its subsidiaries, collectively referred to as Dell-EMC (ECD Business) for approximately $1.62 billion. In accordance with Topic 805, this acquisition was accounted for as a business combination. ECD Business offers OpenText a suite of leading Enterprise Content Management solutions with deep industry focus, including the Documentum TM, InfoArchive TM, and LEAP TM product families. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition were consolidated with those of OpenText beginning January 23, 2017. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of January 23, 2017, are set forth below:
Current assets | $ | 11,339 |
Non-current tangible assets | 103,672 |
Intangible customer assets | 407,000 |
Intangible technology assets | 459,000 |
Liabilities assumed | (182,301 | )
Total identifiable net assets | 798,710 |
Goodwill | 823,684 |
Net assets acquired | $ | 1,622,394 |
The goodwill of $823.7 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $378.5 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $163.8 million, which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by $52.0 million. Further, included within total identifiable net assets are also certain contract assets which represent revenue earned by the ECD Business on long-term projects for which billings had not yet occurred as of January 23, 2017. As these long-term projects have now been inherited by OpenText, we are responsible for billing and collecting cash on these projects at the appropriate time, yet we do not and will not recognize revenue for these billings. The fair value assigned to these contract assets as of January 23, 2017 was $8.4 million. Purchase of an Asset Group Constituting a Business - CCM Business On July 31, 2016, we acquired certain customer communications management software and services assets and liabilities from HP Inc. (CCM Business) for approximately $315.0 million. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements our current software portfolio, and allows us to better serve our customers by offering a wider set of CCM capabilities. The results of operations of this acquisition were consolidated with those of OpenText beginning July 31, 2016. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 31, 2016, are set forth below:
Current assets | $ | 683 |
Non-current deferred tax asset | 11,861 |
Non-current tangible assets | 2,348 |
Intangible customer assets | 64,000 |
Intangible technology assets | 101,000 |
Liabilities assumed | (38,090 | )
Total identifiable net assets | 141,802 |
Goodwill | 173,198 |
Net assets acquired | $ | 315,000 |
The goodwill of $173.2 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $105.1 million is expected to be deductible for tax purposes. Acquisition of Recommind, Inc. O n July 20, 2016, we acquired all of the equity interest in Recommind, Inc. (Recommind), a leading provider of eDiscovery and information analytics, for approximately $170.1 million. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements our EIM solutions, and through eDiscovery and analytics, provides increased visibility into structured and unstructured data. The results of operations of Recommind, were consolidated with those of OpenText beginning July 20, 2016. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 20, 2016, are set forth below:
Current assets | $ | 30,034 |
Non-current tangible assets | 1,245 |
Intangible customer assets | 51,900 |
Intangible technology assets | 24,800 |
Long-term deferred tax liabilities | (1,780 | )
Other liabilities assumed | (27,497 | )
Total identifiable net assets | 78,702 |
Goodwill | 91,405 |
Net assets acquired | $ | 170,107 |
The goodwill of $91.4 million is primarily attributable to the synergies expected to arise after the acquisition. No portion of this goodwill is expected to be deductible for tax purposes. The fair value of current assets acquired includes accounts receivable with a fair value of $28.7 million. The gross amount receivable was $29.6 million of which $0.9 million of this receivable was expected to be uncollectible.

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