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ACQUISITIONS | 12 Months Ended
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Jun. 30, 2020
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS Fiscal 2020 Acquisitions Acquisition of XMedius On March 9, 2020, we acquired all of the equity interest in XMedius for $73.3 million in an all cash transaction. XMedius is a provider of secure information exchange and unified communication solutions. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe the acquisition complements our Customer Experience Management (CEM) and Business Network (BN) platforms. The results of operations of this acquisition have been consolidated with those of OpenText beginning March 9, 2020. Preliminary Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of March 9, 2020, are set forth below:
Current assets | $ | 8,542 |
Non-current tangible assets | 3,792 |
Intangible customer assets | 35,910 |
Intangible technology assets | 11,143 |
Liabilities assumed | (35,685 | )
Total identifiable net assets | 23,702 |
Goodwill | 49,633 |
Net assets acquired | $ | 73,335 |
The goodwill of $49.6 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $0.1 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $18.5 million, which represents our estimate of the fair value of the contractual obligations assumed based on a valuation. In arriving at this fair value, we reduced the acquired company’s original carrying value by $2.7 million. The fair value of current assets acquired includes accounts receivable with a fair value of $6.4 million. The gross amount receivable was $6.7 million, of which $0.3 million is expected to be uncollectible. Acquisition-related costs for XMedius included in "Special charges (recoveries)" in the Consolidated Financial Statements for the year ended June 30, 2020 were $0.8 million. The finalization of the above purchase price allocation is pending the finalization of the valuation of fair value for the assets acquired and liabilities assumed, including intangible assets and taxation-related balances as well as for potential unrecorded liabilities. We expect to finalize this determination on or before our quarter ending March 31, 2021. Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the year ended June 30, 2020. Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations. Acquisition of Carbonite On December 24, 2019, we acquired all of the equity interest in Carbonite, a leading provider of cloud-based subscription backup, disaster recovery and endpoint security to small and medium-sized businesses (SMB), consumers, and a wide variety of partners. Total consideration for Carbonite was $1.4 billion paid in cash (inclusive of cash acquired). In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe the acquisition increases our position in the data protection and endpoint security space, further strengthens our cloud capabilities and opens a new route to connect with customers through Carbonite's marquee SMB and consumer channels and products. The results of operations of Carbonite have been consolidated with those of OpenText beginning December 24, 2019. Preliminary Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of December 24, 2019, are set forth below:
Current assets (inclusive of cash acquired of $62.9 million) | $ | 129,779 |
Non-current tangible assets (inclusive of restricted cash acquired of $2.4 million) | 105,762 |
Intangible customer assets | 549,500 |
Intangible technology assets | 290,000 |
Liabilities assumed | (557,779 | )
Total identifiable net assets | 517,262 |
Goodwill | 853,162 |
Net assets acquired | $ | 1,370,424 |
The goodwill of $853.2 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $6.9 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $171.0 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 $74.7 million. The fair value of current assets acquired includes accounts receivable with a fair value of $45.7 million. The gross amount receivable was $47.1 million of which $1.4 million of this receivable was expected to be uncollectible. Acquisition-related costs for Carbonite included in "Special charges (recoveries)" in the Consolidated Financial Statements for the year ended June 30, 2020 were $9.2 million. The finalization of the above purchase price allocation is pending the finalization of the valuation of fair value for the assets acquired and liabilities assumed, including intangible assets and taxation-related balances as well as for potential unrecorded liabilities. We expect to finalize this determination on or before our quarter ending December 31, 2020. The amount of Carbonite's revenues and net loss included in our Consolidated Statements of Income since the date of acquisition for the year ended June 30, 2020 is set forth below:
Revenues | $ | 235,374 |
Net Loss * | (49,322 | )
* Net loss for the year ended includes one-time fees of $16.6 million on account of special charges and $99.0 million of amortization charges relating to intangible assets, all net of tax. The unaudited pro forma revenues and net income of the combined entity for the year ended June 30, 2020 and 2019, respectively, had the acquisition been consummated on July 1, 2018, are set forth below:
| Year Ended June 30,
Supplemental Unaudited Pro Forma Information(1) | 2020 |  | 2019
Total Revenues | $ | 3,351,338 |  |  | $ | 3,226,128 |
Net Income (2) (3) | 171,297 |  |  | 75,498 |
(1) Carbonite acquired Webroot Inc. in March 2019. The supplemental pro forma revenues and net income shown above do not include the results of operations of Webroot Inc. for periods prior to the Webroot acquisition date. (2) Included in pro forma net income for the year ended June 30, 2019 are $127 million of one-time expenses incurred by Carbonite on account of the acquisition and the related tax effect of $33 million. These one-time expenses included i) $74 million related to the accelerated vesting of historical Carbonite equity awards, ii) $29 million of one time fees, primarily related to transaction costs triggered by the closing of the acquisition, iii) $21 million related to the extinguishment of certain of Carbonite's historical debt and interest rate swaps and iv) $3 million in employee severance costs. (3) Included in pro forma net income for the year ended June 30, 2020 and 2019 are estimated amortization charges relating to the allocated value of intangible assets. The unaudited pro forma financial information in the table above is presented for information 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. Acquisition of Dynamic Solutions Group Inc. (The Fax Guys) On December 2, 2019, we acquired certain assets and assumed certain liabilities of The Fax Guys, for $5.1 million, of which $1.0 million is currently held back and unpaid in accordance with the terms of the purchase agreement. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements our Information Management portfolio. The results of operations of The Fax Guys have been consolidated with those of OpenText beginning December 2, 2019. Since the date of acquisition, the acquisition had no significant impact on revenues and net earnings for the year ended June 30, 2020. Pro forma results of operations for this acquisition have not been presented because they are not material to our consolidated results of operations. Fiscal 2019 Acquisitions Acquisition of Catalyst Repository Systems Inc. On January 31, 2019, we acquired all of the equity interest in Catalyst, a leading provider of eDiscovery that designs, develops and supports market-leading cloud eDiscovery software. Total consideration for Catalyst was $71.4 million, of which $70.8 million was paid in cash and $0.6 million is currently held back and unpaid in accordance with the purchase agreement. In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our Information Management portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning January 31, 2019. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their 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 | 31,607 |
Net assets acquired | $ | 71,434 |
The goodwill of $31.6 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $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 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 was expected to be uncollectible. The finalization of the purchase price allocation during the year ended June 30, 2020 resulted in an adjustment to amounts previously disclosed of $0.6 million. Acquisition of 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 $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 Information Management portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning December 17, 2018. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their 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 | (57,265 | )
Total identifiable net assets | 146,209 |
Goodwill | 164,434 |
Net assets acquired | $ | 310,643 |
The goodwill of $164.4 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $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. 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 was expected to be uncollectible. The finalization of the purchase price allocation during the year ended June 30, 2020 did not result in any significant changes to the preliminary amounts previously disclosed. 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 $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 Information Management 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 $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 was expected to be uncollectible. The finalization of the purchase price allocation was completed during Fiscal 2019 and 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 $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 Information Management 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 $129.8 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $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 was 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 (expense), net " in our Consolidated Statements of Income for the year ended June 30, 2018. Refer to note 23 - "Other Income (Expense), Net" for additional details. The finalization of the purchase price allocation was completed during Fiscal 2019 and 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 $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 Information Management 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 $26.9 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, $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.

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