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Acquisitions | 9 Months Ended
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Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions dataJAR On July 13, 2023, the Company completed its acquisition of dataJAR, a UK-based leading MSP focused on providing powerful Apple and Jamf services for businesses and educational organizations. dataJAR’s proprietary software provides a single pane of glass for Jamf MSP partners who assist in managing multiple organizations’ deployments, reducing support tickets, and allowing partners to more seamlessly manage devices. We believe this acquisition will help Jamf partner more closely with its MSP partners and expand the reach of its leading Apple-first and Apple-best management and security platform. Under the terms of the dataJAR Purchase Agreement, the Company acquired 100% of the equity interest in dataJAR for total purchase consideration of £19.3 million (or approximately $25.1 million using the exchange rate on July 13, 2023), which included (i) £16.6 million (or approximately $21.6 million using the exchange rate on July 13, 2023) paid upon closing, (ii) £0.2 million (or approximately $0.3 million using the exchange rate on July 13, 2023) in cash as partial security for post-closing true-up adjustments, and (iii) £2.5 million (or approximately $3.2 million using the exchange rate on July 13, 2023) in cash as partial security for post-closing indemnification claims to be released 12 months from the closing date. The cash consideration paid upon closing was funded by the Company’s cash on hand. In addition, the terms of the dataJAR Purchase Agreement provide for additional future payments to the sellers in the amount of £6.5 million (or approximately $8.4 million using the exchange rate on July 13, 2023) if certain key employees continue their employment with the Company through July 13, 2024. This expense is recognized on a straight-line basis over the requisite service period in general and administrative expense in the condensed consolidated statement of operations. The Company recognized expense of $1.7 million related to this agreement during the three months ended September 30, 2023. Acquisition-related expenses of $1.2 million were expensed as incurred. These expenses were recognized as acquisition costs in general and administrative expenses in the condensed consolidated statement of operations. The final purchase accounting allocations for the dataJAR acquisition will be determined within one year from the acquisition date and depend on a number of factors, including the final valuation of our intangible assets acquired and finalization of income tax effects of the opening balance sheet. The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed (in thousands):
Assets acquired: |
Cash and cash equivalents | $ | 2,789 |
Trade accounts receivable, net | 945 |
Prepaid expenses | 1,208 |
Other current assets | 10 |
Intangible assets acquired | 9,400 |
Operating lease assets | 252 |
Liabilities assumed: |
Accounts payable | (605) |
Accrued liabilities | (599) |
Income taxes payable | (45) |
Deferred revenue | (3,230) |
Operating lease liabilities | (191) |
Deferred tax liability | (2,398) |
Goodwill | 17,550 |
Total purchase consideration | $ | 25,086 |
The Company accounted for the acquisition by applying the acquisition method of accounting for business combinations in accordance with ASC 805. The allocation of the purchase price required management to make significant estimates in determining the fair value of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates included, but were not limited to: •future expected cash flows from subscription contracts and acquired developed technologies; •anticipated growth in revenue and churn rates for existing customers; •obsolescence curves and other useful life assumptions, such as the period of time and intended use of acquired intangible assets in the Company’s product offerings; and •discount rates. The goodwill represents the excess of the purchase consideration over the fair value of the underlying net identifiable assets. The goodwill recognized in this acquisition is primarily attributable to expected synergies in sales opportunities across complementary products, customers, and geographies and cross-selling opportunities. The goodwill is not deductible for income tax purposes. The estimated useful lives and fair values of the identifiable intangible assets acquired were as follows:
| Useful Life |  | Gross Value
|  |  | (in thousands)
Customer relationships | 6.0 years |  | $ | 5,000 |
Developed technology | 5.0 years |  | 4,400 |
Total identifiable intangible assets |  |  | $ | 9,400 |
The weighted-average useful life of the intangible assets acquired was 5.5 years. Customer relationships represent the estimated fair value of the underlying relationships with dataJAR customers and were valued using the multi-period excess earnings method. Developed technology represents the estimated fair value of the dataJAR software and was valued using the relief from royalty method. Pro forma results of operations for this acquisition were not presented as the effects were not material to our financial results. ZecOps On November 16, 2022, the Company completed its acquisition of ZecOps, a leader in mobile detection and response, pursuant to the terms of the ZecOps Merger Agreement. This acquisition uniquely positioned Jamf to help IT and security teams strengthen their organization’s mobile security posture. Under the terms of the ZecOps Merger Agreement, the Company acquired 100% of the equity interest in ZecOps for total purchase consideration of $44.5 million. The total purchase consideration included cash consideration of $28.4 million, equity consideration of $15.1 million (based on the closing price of the Company’s common stock on November 16, 2022), and repayment of the $1.0 million SAFE investment in ZecOps the Company entered into in the third quarter of 2022. The cash consideration included (i) $0.3 million in cash held back in an escrow fund as partial security for post-closing true-up adjustments and (ii) $7.2 million in cash held back in an escrow fund as partial security for post-closing indemnification claims with (A) 50% of the then existing escrowed amount to be released 18 months following the closing date and (B) the remaining escrowed amount to be released on March 1, 2025. The cash consideration was funded by the Company’s cash on hand. The equity consideration consisted of up to 711,111 shares of the Company’s common stock, based on (i) the deemed total equity consideration value under the ZecOps Merger Agreement of $19.2 million divided by (ii) the agreed upon floor of the Company’s stock price of $27.00 per share. On the closing date, 710,691 shares of the equity consideration were issued to applicable ZecOps equityholders, and 420 shares were issued into a reserve account, subject to the completion of customary shareholder certifications. The reserved shares were subsequently released in January 2023. In the first quarter of 2023, the Company recorded an immaterial measurement period adjustment. The final purchase accounting allocations for the ZecOps acquisition will be determined within one year from the acquisition date and depend on a number of factors, including the finalization of income tax effects of the opening balance sheet. The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed (in thousands):
Assets acquired: |
Cash and cash equivalents | $ | 820 |
Trade accounts receivable, net | 448 |
Prepaid expenses | 39 |
Other current assets | 2,104 |
Intangible assets acquired | 9,500 |
Operating lease assets | 104 |
Liabilities assumed: |
Accounts payable | (73) |
Accrued liabilities | (2,260) |
Income taxes payable | (48) |
Deferred revenue | (1,014) |
Operating lease liabilities | (85) |
Deferred tax liability | (529) |
Goodwill | 35,458 |
Total purchase consideration | $ | 44,464 |
The Company accounted for the acquisition by applying the acquisition method of accounting for business combinations in accordance with ASC 805. The allocation of the purchase price required management to make significant estimates in determining the fair value of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates included, but were not limited to: •future expected cash flows from subscription contracts and acquired developed technologies; •time to recreate customer relationships and anticipated growth in revenue; •research and development costs; •obsolescence curves and other useful life assumptions, such as the period of time and intended use of acquired intangible assets in the Company’s product offerings; •discount rates; and •tax-related valuation allowances. The goodwill represents the excess of the purchase consideration over the fair value of the underlying net identifiable assets. The goodwill recognized in this acquisition is primarily attributable to expected synergies in sales opportunities across complementary products, customers, and geographies and cross-selling opportunities. The goodwill is not deductible for income tax purposes. The estimated useful lives and fair values of the identifiable intangible assets acquired were as follows:
| Useful Life |  | Gross Value
|  |  | (in thousands)
Developed technology | 5.0 years |  | $ | 5,900 |
Customer relationships | 5.0 years |  | 2,300 |
Non-competes | 3.0 years |  | 1,300 |
Total identifiable intangible assets |  |  | $ | 9,500 |
The weighted-average useful life of the intangible assets acquired was 4.7 years. Developed technology represents the estimated fair value of the features underlying the ZecOps products as well as the platform supporting ZecOps customers and was valued using an excess earnings income approach. Customer relationships represent the estimated fair value of the underlying relationships with ZecOps customers and were valued using a replacement cost method, which estimates the cost to recreate the asset. Non-competes represent the estimated fair value of non-compete agreements acquired from ZecOps and were valued using a with-and-without income approach. Pro forma results of operations for this acquisition were not presented as the effects were not material to our financial results. Other During the first quarter of 2022, the Company completed two acquisitions to expand our products and services offerings. These acquisitions were not significant individually or in the aggregate to our condensed consolidated financial statements. The combined purchase price for these acquisitions was $4.0 million, which was paid with cash on hand. The purchase price was allocated to the assets acquired based on their estimated fair values as of the date of each acquisition. The allocation included $0.9 million to developed technology with an estimated useful life of 5.0 years and $0.1 million to other assets, with the remaining $3.0 million allocated to goodwill. The goodwill is not deductible for income tax purposes. Acquisition-related expenses of $0.4 million were expensed as incurred. These expenses were recognized as acquisition costs in general and administrative expenses in the condensed consolidated statement of operations. Digita In 2019, the Company recorded contingent consideration in connection with its purchase of the outstanding membership interests of Digita. The maximum contingent consideration was $15.0 million if the acquired business achieved certain revenue milestones by December 31, 2022. The acquired business achieved the minimum revenue milestones, which resulted in the Company making cash payments of $6.2 million, $4.6 million, and $4.2 million in the first quarter of 2023, the first quarter of 2022, and the second quarter of 2021, respectively, to the former owners of the acquired business. See Note 3 for more information on the fair value of the contingent consideration.

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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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