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ACQUISITIONS | 12 Months Ended
--- | ---
Mar. 31, 2024
Business Combination and Asset Acquisition [Abstract] |
ACQUISITIONS | ACQUISITIONS: Habu On January 31, 2024, the Company completed the acquisition of Habu, a data clean room software provider that works with global brands and companies to securely share first-party customer data with business partners and publishers to enable more effective and personalized marketing. This acquisition empowers the Company to deliver scale and simplicity to our customers. Through our combined offering, companies will have one, simple platform to measure campaigns across all walled gardens, programmatic, and media channels while connecting data seamlessly across any cloud, warehouse, or clean room. The results of operations for Habu since the closing date have been included in the Company's consolidated financial statements for the fiscal year ended March 31, 2024. The acquisition date fair value of the consideration for Habu was approximately $173.4 million, which consisted of the following (dollars in thousands):
Cash, net of $971 cash acquired |  | $ | 170,281 |
Restricted cash held in escrow |  | 2,600 |
Fair value of replacement stock options and restricted stock shares considered a component of purchase consideration transferred |  | $ | 493 |
Total fair value of consideration transferred |  | $ | 173,374 |
On the acquisition date, the Company delivered $2.6 million of cash to an escrow agent according to the terms of the merger agreement. The principal escrow is owned by the Company until funds are delivered to the Habu sellers one year from the acquisition date. All interest and earnings on the principal escrow amount remain the property of the Company. The aggregate acquisition-date fair value of merger consideration with respect to assumed unvested stock options, restricted stock shares and restricted stock units was approximately $25.5 million. Of the $25.5 million acquisition-date fair value, $0.5 million was attributed to pre-combination service related to the options and restricted shares and treated as a component of purchase consideration transferred. The remaining $25.0 million is considered future compensation cost and will be recognized as stock-based compensation cost over the remaining service period of the replacement options and restricted shares. In connection with the Habu acquisition, $14.6 million of the acquisition-date fair value of merger consideration otherwise payable with respect to incentive compensation and shares of Habu common stock held by certain key employees were subject to holdback by the Company pursuant to agreements with those employees (each, a "Holdback Agreement"). Each Holdback Agreement specifies that the consideration holdback will vest in three equal annual increments on the anniversary of the January 31, 2024 closing date. Vesting is subject to the Habu key employees' continued employment through each annual vesting date and will be settled in cash, shares of Company common stock, or any combination of cash and Company common stock, at the Company's discretion. As a result, the consideration holdback is not considered part of the purchase price but rather is considered future compensation cost and will be recognized as stock-based compensation cost over the three-year earning period. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition (dollars in thousands):
|  | January 31, 2024
Assets acquired: |  |
Cash |  | $ | 971 |
Goodwill |  | 141,641 |
Intangible assets |  | 33,500 |
Other current and noncurrent assets |  | 3,815 |
Total assets acquired |  | 179,927 |
Accounts payable and accrued expenses |  | (1,460) |
Deferred revenue |  | (3,573) |
Other current and noncurrent liabilities |  | (549) |
Net assets acquired |  | 174,345 |
Less: |  |
Cash acquired |  | (971) |
Net purchase price allocated |  | 173,374 |
Less: |  |
Restricted cash held in escrow |  | (2,600) |
Fair value of replacement stock options and restricted stock shares considered a component of purchase consideration transferred |  | (493) |
Net cash paid in acquisition |  | 170,281 |
The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill and is primarily attributed to expectations to the development of future technology. The goodwill balance is not deductible for U.S. income tax purposes. The Company recognized the assets and liabilities acquired based on its preliminary estimates of their fair values as of the acquisition date. As additional information becomes known concerning the acquired assets and assumed liabilities, management may make adjustments to the opening balance sheet of the acquired company up to the end of the measurement period, which is not longer than a one-year period following the acquisition date. The determination of the fair values of the acquired assets and liabilities assumed (and the related determination of the estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment. As of March 31, 2024, the Company has not completed its analysis of deferred income taxes. The fair value currently assigned to deferred income taxes was based on the information that was available as of the date of the acquisition. The Company expects to finalize the deferred income taxes as soon as practicable. The amounts allocated to intangible assets in the table above included developed technology and customer relationships/trade name. Intangible assets are being amortized on a straight-line basis over the estimated useful lives. The following table presents the components of intangible assets acquired and their estimated useful lives as of the acquisition date (dollars in thousands):
|  |  |  | Useful life
|  | Fair value |  | (in years)
Developed technology |  | $ | 30,000 |  |  | 3
Customer relationships |  | 3,000 |  |  | 3
Trade names |  | 500 |  |  | 1
Total intangible assets |  | $ | 33,500 |  |  |
The Company has omitted pro forma disclosures related to this acquisition date as the pro forma effect of this acquisition is not material. Rakam On December 13, 2021, the Company completed the acquisition of certain technology assets owned by Rakam, Inc. ("Rakam") for approximately $2.2 million in cash (including a holdback amount of $0.2 million). The technology asset is a cloud-agnostic customer data analytics platform that is deployed direct in the customer's data warehouse. The purchased technology has been embedded into the Company's platform, enabling us to provide a single, unified segmentation solution and enable our customers to generate real-time insights and create custom audiences wherever their data resides. The Company concluded the acquired assets did not meet the definition of a business under ASU 2017-01, "Clarifying the Definition of a Business," and therefore has accounted for the acquisition as an asset acquisition. The purchased asset was recorded as a $2.2 million developed technology intangible asset included in other assets, net in the consolidated balance sheet and is being amortized over a period of three years based on its estimated useful life. In connection with the acquisition, the Company extended employment agreements and granted $2.6 million of restricted stock units to two key Rakam employees that were recorded as non-cash stock compensation. The restricted stock units vest over four years and were not considered part of the asset purchase price as they require future service and continued employment by those individuals to vest. Diablo On April 21, 2021, the Company completed the acquisition of Diablo.ai, Inc. ("Diablo"), a first-party data resolution platform and graph builder, for approximately $9.7 million in cash (including a holdback amount of $1.2 million). The acquisition also included $1.9 million of assumed restricted stock awards that are recorded as non-cash stock compensation over a period of three years. Diablo's technology has been embedded into our unified platform and plays an integral role in our global identity capability. The Company omitted pro forma disclosures related to this acquisition as the pro forma effect of this acquisition was not material. The results of operations for this acquisition are included in the Company's consolidated results beginning April 21, 2021. The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition (dollars in thousands):
|  | April 21, 2021
Assets acquired: |  |
Cash |  | $ | 131 |
Goodwill |  | 6,807 |
Intangible assets |  | 3,500 |
Total assets acquired |  | 10,438 |
Deferred income taxes |  | (505) |
Accounts payable and accrued expenses |  | (65) |
Net assets acquired |  | 9,868 |
Less: |  |
Cash acquired |  | (131) |
Net purchase price allocated |  | 9,737 |
Less: |  |
Cash held back |  | (1,200) |
Net cash paid in acquisition |  | 8,537 |

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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/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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