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Business Combinations
 9 Months Ended
Sep. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
Business Combinations Business Combinations
Acquisition of Decision Resources Group
On February 28, 2020, we acquired 100% of the assets, liabilities and equity interests of Decision Resources Group ("DRG"), a premier provider of high-value data, analytics and insights products and services to the healthcare industry, from
Piramal Enterprises Limited ("PEL"), which is a part of global business conglomerate Piramal Group. The acquisition helps us expand our core businesses and provides us with the potential to grow in the Life Sciences Product Line.
 
The aggregate consideration paid in connection with the closing of the DRG acquisition was $964,997, comprised of $900,000 of base cash plus $6,100 of adjusted closing cash paid on the closing date and 2,895,638 of the Company's ordinary shares issued to PEL on March 5, 2021. The contingent stock consideration was valued at $58,897 on the closing date and was revalued at each period end until the issuance date. For the nine months ended September 30, 2021, the fair value of the contingent stock consideration decreased by $24,410, which was recorded to selling, general and administrative costs in the Condensed Consolidated Statements of Operations. The corresponding liability was $86,029 as of December 31, 2020 and recorded to Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. As the liability settled on March 5, 2021 with the Company issuing 2,895,638 ordinary shares valued at $61,619, there was no liability captured within the September 30, 2021 Condensed Consolidated Balance Sheet. See Note 22 - Commitments and Contingencies for more information. The DRG acquisition was accounted for using the acquisition method of accounting. The excess of the purchase price over the net tangible and intangible assets was recorded to Goodwill and primarily reflected the assembled workforce and expected synergies. Goodwill was not deductible for tax purposes. Due to the decrease to the fair value of the contingent stock consideration between December 31, 2020 and March 5, 2021, during the three and nine months ended September 30, 2021, total transaction costs incurred in connection with the acquisition of DRG were $0 and a net gain of $24,410, respectively. Total transaction costs during the three and nine months ended September 30, 2020 were $25,237 and $50,702, respectively.

The amount of Revenues, net and Net loss resulting from the acquisition that are attributable to the Company's stockholders and included in the Condensed Consolidated Statements of Operations and Comprehensive Loss were as follows:

Three Months Ended September 30,
20212020
Revenues, net (1)
$51,626 $49,499 
Net income (loss) attributable to the Company's stockholders$7,868 $(454)
(1) Includes $2,017 of a deferred revenue adjustment recognized during the three months ended September 30, 2020.
Nine Months Ended September 30,
20212020
Revenues, net (1)
$150,911 $113,206 
Net income (loss) attributable to the Company's stockholders$18,275 $(9,971)
(1) Includes $6,822 of a deferred revenue adjustment recognized during the nine months ended September 30, 2020. The nine months ended September 30, 2020 includes seven months of revenue as the business was acquired in February of 2020.
The following table summarizes the final purchase price allocation for this acquisition:
Total
Accounts receivable$52,193 
Prepaid expenses4,295 
Other current assets68,001 
Property and equipment, net4,136 
Other intangible assets(1)491,366 
Other non-current assets2,960 
Operating lease right-of-use assets 25,099 
Total assets$648,050 
Accounts payable3,474 
Accrued expenses and other current liabilities88,561 
Current portion of deferred revenue35,126 
Current portion of operating lease liabilities 5,188 
Deferred income taxes47,467 
Non-current portion of deferred revenue936 
Operating lease liabilities 20,341 
Total liabilities201,093 
Fair value of acquired identifiable assets and liabilities$446,957 
Purchase price, net of cash(2)
944,220 
Less: Fair value of acquired identifiable assets and liabilities 446,957 
Goodwill$497,263 
(1) Includes $3,966 of internally developed software in progress acquired.
(2) The Company acquired cash of $20,777.
The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives. The following table summarizes the estimated fair value of DRG’s identifiable intangible assets acquired and their remaining amortization period (in years):
Fair Value as of February 28, 2020Remaining
Range of Years
Customer relationships$381,000 
10-21
Database and content50,200 
2-7
Trade names5,200 
4-7
Purchased software23,000 
3-8
Backlog28,000 4
Total identifiable intangible assets$487,400 
During the year ended December 31, 2020, there were additional purchase accounting adjustments of $1,804. These adjustments were related to fixed assets, deferred revenue and legal accrual with a corresponding net decrease to goodwill.
Unaudited pro forma information for the Company for the periods presented as if the acquisition had occurred January 1, 2019 is as follows:
Three Months Ended September 30,
20212020
Pro forma revenues, net$442,117 $286,377 
Pro forma net income (loss) attributable to the Company's stockholders(1)
$23,312 $(180,333)
  (1) The Pro forma net loss attributable to the Company's stockholders for the three months ended September 30, 2020 has been restated. See Note 25 - Restatement of Previously Issued Condensed Financial Statements for more information.
Nine Months Ended September 30,
20212020
Pro forma revenues, net$1,316,192 $828,489 
Pro forma net loss attributable to the Company's stockholders(1)
$(82,852)$(322,268)
  (1) The Pro forma net loss attributable to the Company's stockholders for the nine months ended September 30, 2020 has been restated. See Note 25 - Restatement of Previously Issued Condensed Financial Statements for more information.
The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisition taken place on the date indicated, or the future consolidated results of operations of the Company. The pro forma financial information presented above has been derived from the historical condensed consolidated financial statements of the Company and from the historical accounting records of DRG.
The unaudited pro forma results include certain pro forma adjustments to revenue and net loss that were directly attributable to the acquisition, assuming the acquisition had occurred on January 1, 2019, including the following: (i) additional amortization expense that would have been recognized relating to the acquired intangible assets, (ii) adjustments to interest expense to reflect the removal of DRG debt and the additional Company borrowings in conjunction with the acquisition, (iii) acquisition-related transaction costs and other one-time non-recurring costs which reduced expenses by $161 and $26,348 for the three and nine months ended September 30, 2020.

Acquisition of CPA Global

On October 1, 2020, we acquired 100% of the assets, liabilities and equity interests of CPA Global, a global leader in intellectual property software and tech-enabled services from Redtop Holdings Limited ("Redtop"). The acquisition helps Clarivate create a true end-to-end platform supporting the full IP lifecycle from idea generation to commercialization and protection.
Clarivate acquired all of the outstanding shares of CPA Global in a cash and stock transaction. The aggregate consideration in connection with the closing of the CPA Global acquisition was $8,740,324, net of $99,275 cash acquired and including an equity holdback consideration of $46,485. The aggregate consideration was composed of (i) $6,761,515 from the issuance of up to 218,183,778 ordinary shares to Redtop Holdings Limited, a portfolio company of Leonard Green & Partners, L.P., representing approximately 35% pro forma fully diluted ownership of Clarivate and (ii) approximately $2,078,084 in cash to fund the repayment of CPA Global's parent company outstanding debt of $2,055,822 and related interest swap termination fee of $22,262. Of the 218,306,663 ordinary shares issuable in the acquisition, Clarivate issued 216,683,778 ordinary shares as of October 1, 2020.
Issuance of 218,183,778 shares
$6,761,515 
Cash paid for repayment of CPA Global's parent company debt and related interest rate swap termination charge2,078,084 
Total purchase price8,839,599 
Cash acquired(99,275)
Total purchase price, net of cash acquired$8,740,324 
The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the assembled workforce and expected synergies. Goodwill is not deductible for tax purposes. During the three and nine
months ended September 30, 2021, total transaction costs incurred in connection with the acquisition of CPA Global resulted in a net gain of $2,682 and $4,860, respectively. Total transaction costs during the three and nine months ended September 30, 2020 were $8,521.
The amount of Revenues, net and Net loss resulting from the acquisition that are attributable to the Company's stockholders and included in the Condensed Consolidated Statements of Operations and Comprehensive Loss were as follows:
Three Months Ended September 30, 2021
Revenues, net (1)
$155,869 
Net income attributable to the Company's stockholders$18,357 
  (1) Includes $50 of a deferred revenue haircut recognized during the three months ended September 30, 2021.
Nine Months Ended September 30, 2021
Revenues, net (1)
$465,073 
Net income attributable to the Company's stockholders$5,372 
  (1) Includes $4,399 of a deferred revenue adjustment recognized during the nine months ended September 30, 2021.
The purchase price allocation for the CPA Global acquisition as of the close date of October 1, 2020 is final. The following table summarizes the final purchase price allocation for this acquisition:
Total
Accounts receivable$380,259 
Prepaid expenses27,437 
Other current assets215,734 
Property and equipment, net13,290 
Other intangible assets4,920,317 
Deferred income taxes21,027 
Other non-current assets25,736 
Operating lease right-of-use assets 30,649 
Total assets$5,634,449 
Accounts payable53,791 
Accrued expenses and other current liabilities458,551 
Current portion of deferred revenue181,365 
Current portion of operating lease liabilities 7,738 
Non-current portion of deferred revenue16,771 
Deferred income taxes288,541 
Other non-current liabilities43,785 
Operating lease liabilities 23,615 
Total liabilities1,074,157 
Fair value of acquired identifiable assets and liabilities$4,560,292 
Purchase price, net of cash(1)
$8,740,324 
Less: Fair value of acquired identifiable assets and liabilities 4,560,292 
Goodwill$4,180,032 
  (1) The Company acquired cash of $99,275.
During the nine months ended September 30, 2021, the Company recorded measurement period adjustments to the purchase price allocation recorded as of the close date of October 1, 2020. The following table summarizes the measurement period adjustments recorded through September 30, 2021:
Total
Accounts receivable(1)
$7,135 
Prepaid expenses(158)
Other current assets370 
Property and equipment, net1,002 
Other non-current assets1,123 
Deferred income taxes(3)
1,717 
Total assets$11,189 
Accounts payable290 
Accrued expenses and other current liabilities(2)
44,488 
Current portion of deferred revenue989 
Non-current portion of deferred revenue(15)
Deferred income taxes(3)
(13,405)
Total liabilities$32,347 
Fair value of acquired identifiable assets and liabilities$(21,158)
Purchase price, net of cash$(665)
Less: Fair value of acquired identifiable assets and liabilities (21,158)
Goodwill$20,493 
(1) The $7,135 account receivable measurement period adjustment is due to a change in the fair value of CPA Global's accounts receivable, with there being a $9,306 increase in the valuation increase offset by a $2,171 decrease.
(2) The Company recorded measurement period adjustments of $44,488 increasing accrued expenses and other current liabilities, of which, $61,000 relates to adjustments to CPA Global's accrual for claims existing prior to the date of acquisition, offset by a $16,512 reduction to CPA Global's other accruals. See Note 22 - Commitments and Contingencies for further information.
(3) The $15,122 deferred income tax measurement period adjustment is due to the tax impact of CPA Global's other measurement period adjustments detailed in the chart above.

The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives. The following table summarizes the estimated fair value of CPA Global’s identifiable intangible assets acquired and their remaining amortization period (in years):

Fair Value as of October 1, 2020Remaining
Range of Years
Customer relationships$4,643,306 
17-23
Technology266,224 
6-14
Trademarks10,787 
2-17
Total identifiable intangible assets$4,920,317 
Acquisition of Beijing IncoPat
On October 26, 2020, the Company acquired 100% of the equity voting interest in Beijing IncoPat Technology Co., Ltd. (“IncoPat”). IncoPat is a leading patent information service provider in China via cash on hand. IncoPat is complementary to Clarivate’s intellectual property portfolio. The Company paid $52,133 in cash to acquire IncoPat. As of September 30, 2021 and December 31, 2020, $6,313 of the consideration is held in escrow and will be paid in a future period. Until this balance is paid it will be held in restricted cash with the offsetting liability within accrued expenses and other current liabilities. The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the
assembled workforce and expected synergies. Goodwill is not deductible for tax purposes. The total transaction costs were immaterial during the three and nine months ended September 30, 2021, and did not have an impact on September 30, 2020 results. IncoPat contributed revenues of $2,470 and $6,801 for the three and nine months ended September 30, 2021, respectively and a net income (loss) of $126 and $(853) for the three and nine months ended September 30, 2021, respectively, and did not have an impact on September 30, 2020 results.
The purchase price allocation for the IncoPat acquisition as of the close date of October 26, 2020 is preliminary and may change upon completion of the determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocation for the acquisition:
Total
Accounts receivable$1,107 
Prepaid expenses168 
Other current assets100 
Property and equipment, net354 
Other intangible assets21,957 
Other non-current assets283 
Total assets$23,969 
Accounts payable73 
Accrued expenses and other current liabilities843 
Current portion of deferred revenue6,445 
Deferred income taxes4,802 
Other non-current liabilities283 
Total liabilities$12,446 
Fair value of acquired identifiable assets and liabilities$11,523 
Purchase price, net of cash(1)
52,133 
Less: Fair value of acquired identifiable assets and liabilities 11,523 
Goodwill$40,610 
(1) The Company acquired cash of $844.
During the nine months ended September 30, 2021, the Company recorded measurement period adjustments related to the valuation of accounts receivables and deferred revenue with a corresponding net increase to goodwill in the amount of $136.

The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives. The following table summarizes the estimated fair value of Beijing IncoPat’s identifiable intangible assets acquired and their remaining weighted-average amortization period (in years):
Fair Value as of October 26, 2020Remaining
Amortization
Period (in years)
Customer relationships$19,989 11
Existing technology1,892 6
Trade names76 2
Total identifiable intangible assets$21,957 
Acquisition of Hanlim IPS Co., LTC
On November 23, 2020, the Company acquired 100% of the equity voting interest in Hanlim IPS Co., LTC ("Hanlim IPS"). Hanlim IPS is a patent research and consulting services provider in South Korea. The acquisition's purpose is to accelerate
innovation in South Korea by offering a more comprehensive range of IP information and insights solutions. The Company paid $9,254 in cash to acquire Hanlim IPS. The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the assembled workforce and expected synergies. Goodwill is not deductible for tax purposes. The total transaction costs were immaterial during the three and nine months ended September 30, 2021, and did not have an impact on September 30, 2020 results. Hanlim IPS contributed revenue of $417 and $1,393 for the three and nine months ended September 30, 2021, respectively, and net income of $35 and $596 for the three and nine months ended September 30, 2021, respectively, and did not have an impact on September 30, 2020 results.
The purchase price allocation for the Hanlim IPS acquisition as of the close date of November 23, 2020 is preliminary and may change upon completion of the determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocation for this acquisition:
Total
Accounts receivable$44 
Prepaid expenses7 
Other current assets844 
Property and equipment, net75 
Other intangible assets8,805 
Other non-current assets94 
Total assets$9,869 
Accounts payable27 
Accrued expenses and other current liabilities1,512 
Deferred income taxes1,937 
Total liabilities3,476 
Fair value of acquired identifiable assets and liabilities$6,393 
Purchase price, net of cash(1)
9,254 
Less: Fair value of acquired identifiable assets and liabilities 6,393 
Goodwill$2,861 
(1) The Company acquired cash of $2,191.
The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives. The following table summarizes the estimated fair value of Hanlim’s identifiable intangible assets acquired and their remaining amortization period (in years):
Fair Value as of November 23, 2020Remaining
Range of Years
Customer relationships$7,832 
11-13
Trade name15 2
Non-compete agreements958 5
Total identifiable intangible assets$8,805 

Acquisition of Bioinfogate
On August 3, 2021, we acquired 100% of the assets, liabilities and equity interests of Bioinfogate, a leading provider of analytics solutions in life sciences via cash on hand for $16,918, inclusive of a $1,941 holdback and will be paid on the first anniversary of the closing date subject to customary provisions of the sale and purchase agreement. As of September 30, 2021, the holdback is recorded in accrued expenses and other liabilities line item with the Condensed Consolidated Balance Sheet. Bioinfogate is complementary to Clarivate's science portfolio. The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the assembled workforce and expected synergies. Goodwill is not deductible for tax purposes. The total transaction costs were immaterial during the three and nine months ended September 30, 2021 and did not have an impact on September 30, 2020 results. Bioinfogate contributed revenue of $533 and $533 for the three and nine months ended September 30, 2021, respectively, and net income of $221 and $221 for the three and nine months ended September 30, 2021, respectively, and did not have an impact on September 30, 2020 results.

The purchase price allocation for the Bioinfogate acquisition as of the close date of August 3, 2021 is preliminary and may change upon completion of the determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocation for this acquisition:
Total
Accounts receivable$366 
Prepaid expenses3 
Other current assets102 
Property and equipment, net21 
Other intangible assets6,280 
Other non-current assets6 
Deferred income taxes184 
Total assets$6,962 
Accounts payable12 
Accrued expenses and other current liabilities82 
Current portion of deferred revenues1,247 
Total liabilities1,341 
Fair value of acquired identifiable assets and liabilities$5,621 
Purchase price, net of cash(1)
$16,918 
Less: Fair value of acquired identifiable assets and liabilities 5,621 
Goodwill$11,297 
(1) The Company acquired cash of $2,069.
The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives. The following table summarizes the estimated fair value of Bioinfogate's identifiable intangible assets acquired and their remaining amortization period (in years):
Fair Value as of August 3, 2021Remaining
Range of Years
Customer relationships$5,224 10
Technology1,020 6
Trade name36 2
Total identifiable intangible assets$6,280