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Acquisitions | 3 Months Ended
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Jun. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Acquisition of Fyber N.V. On May 25, 2021, the Company completed the initial closing of the acquisition of 95.1% of the outstanding voting shares (the “Majority Fyber Shares”) of Fyber N.V. (“Fyber”) pursuant to a Sale and Purchase Agreement (the "Fyber Acquisition") between Tennor Holding B.V., Advert Finance B.V., and Lars Windhorst (collectively, the “Seller”), the Company, and Digital Turbine Luxembourg S.ar.l., a wholly-owned subsidiary of the Company. The remaining outstanding shares in Fyber (the “Minority Fyber Shares”) are (to the Company's knowledge) held by other shareholders of Fyber (the “Minority Fyber Shareholders”) and are presented as non-controlling interests within these financial statements. Fyber is a leading mobile advertising monetization platform empowering global app developers to optimize profitability through quality advertising. Fyber’s proprietary technology platform and expertise in mediation, real-time bidding, advanced analytics tools, and video combine to deliver publishers and advertisers a highly valuable app monetization solution. Fyber represents an important and strategic addition for the Company in its mission to develop one of the largest full-stack, fully-independent, mobile advertising solutions in the industry. The combined platform offering is advantageously positioned to leverage the Company’s existing on-device software presence and global distribution footprint. The Comp any acquired Fyber in exchange for an estimated aggregate consideration of up to $600,000, consisting of: i.Approximately $150,000 in cash, $124,336 of which was paid to the Seller at the closing of the acquisition and the remainder of which is to be paid to the Minority Fyber Shareholders for the Minority Fyber Shares pursuant to the tender offer described below; ii.5,816,588 newly-issued shares of common stock of the Company to the Seller, which such number of shares was determined based on the volume-weighted average price of the common stock on NASDAQ during the 30-day period prior to the closing date, equal in value to $359,233 at the Company's common stock closing price on May 25, 2021, as follows. 1.3,216,935 n ewly-issued shares of common stock of the Company equal in value to $198,678, issued at the closing of the acquisition; 2.1,500,000 newly-issued shares of common stock of the Company equal in value to $92,640, issued on June 17, 2021; 3.1,040,364 newly-issued shares of common stock of the Company equal in value to $64,253, issued on July 16, 2021; 4.59,289 shares of common stock equal in value to $3,662, to be newly-issued during the Company's fiscal second quarter 2022, but subject to a true-up reduction based on increased transaction costs associated with the staggered delivery of the Majority Fyber Shares to the Company, which true-up reduction has been finalized, as described below; and iii.Contingent upon Fyber’s net revenue (revenue less associated license fees and revenue share) being equal to or higher than $100,000 for the 12-month earn-out period ending on March 31, 2022, as determined in the manner set forth in the Sale and Purchase Agreement, a certain number of shares of the Company's common stock, which will be newly-issued to the Seller at the end of the earn-out period, and under certain circumstances, an amount of cash, which value of such shares, based on the weighted average share price for the 30-days prior to the end of the earn-out period, and cash in aggregate, will not exceed $50,000 (subject to set-off against certain potential indemnification claims against the Seller). Based on estimates at the time of the acquisition, the Company initially determined it was unlikely Fyber would achieve the earn-out net revenue target and, as a result, no contingent liability was recognized at that time. The Company paid the cash closing amount on the closing date with a combination of available cash-on-hand and borrowings under the Company’s senior credit facility. On September 30, 2021, the Company entered into the Second Amendment Agreement (the “Second Amendment Agreement”) to the Sale and Purchase Agreement for the Fyber Acquisition. Pursuant to the Second Amendment Agreement, the parties agreed to settle the remaining number of shares of Company common stock to be issued to the Seller at 18,000 shares (i.e., a reduction of 41,289 shares from the 59,289 shares described in (ii)(4) above). As a result, the Company issued a total of 5,775,299 shares of Company common stock to the Seller in connection with the Company’s acquisition of Fyber. As of March 31, 2022, the Company had recognized the acquisition purchase price liability of $50,000. The Company settled the obligation through the issuance of 1,205,982 shares of the Company's common stock on May 19, 2022. Pursuant to certain German law on public takeovers, following the closing, the Company launched a public tender offer to the Minority Fyber Shareholders to acquire from them the Minority Fyber Shares. The tender offer was approved and published in July 2021, and is subject to certain minimum price rules under German law. The timing and the conditions of the tender offer, including the consideration of €0.84 per share offered to the Minority Fyber Shareholders in connection with the tender offer, was determined by the Company pursuant to the applicable Dutch and German takeover laws. During the fiscal year ended March 31, 2022, the Company purchased an additional $18,341 of Fyber's outstanding shares, resulting in an ownership percentage of Fyber of approximately 99.5% as of June 30, 2022. The Company expects to complete the purchase of the remaining outstanding Fyber shares during fiscal year 2023. The delisting of Fyber's remaining outstanding shares on the Frankfurt Stock Exchange was completed on August 6, 2021. The fair values of the assets acquired and liabilities assumed at the date of acquisition are presented as follows 1:
|  | May 25, 2021 |  | Measurement Period Adjustments |  | May 25, 2021 (adjusted)
Assets acquired |  |  |  |  |  |
Cash |  | $ | 71,489 |  |  | $ | — |  |  | $ | 71,489 |
Accounts receivable |  | 64,877 |  |  | 166 |  |  | 65,043 |
Other current assets |  | 10,470 |  |  | — |  |  | 10,470 |
Property and equipment |  | 1,561 |  |  | — |  |  | 1,561 |
Right-of-use asset |  | 13,191 |  |  | — |  |  | 13,191 |
Publisher relationships |  | 106,400 |  |  | (95) |  |  | 106,305 |
Developed technology |  | 86,900 |  |  | — |  |  | 86,900 |
Trade names |  | 32,100 |  |  | 474 |  |  | 32,574 |
Customer relationships |  | 31,400 |  |  | — |  |  | 31,400 |
Favorable lease |  | 1,483 |  |  | — |  |  | 1,483 |
Goodwill |  | 303,015 |  |  | (2,572) |  |  | 300,443 |
Other non-current assets |  | 851 |  |  | — |  |  | 851 |
Total assets acquired |  | $ | 723,737 |  |  | $ | (2,027) |  |  | $ | 721,710 |
Liabilities assumed |  |  |  |  |  |
Accounts payable |  | $ | 78,090 |  |  | $ | (1,501) |  |  | $ | 76,589 |
Accrued license fees and revenue share |  | 5,929 |  |  | — |  |  | 5,929 |
Accrued compensation |  | 52,929 |  |  | — |  |  | 52,929 |
Other current liabilities |  | 12,273 |  |  | (1,739) |  |  | 10,534 |
Short-term debt |  | 25,789 |  |  | — |  |  | 25,789 |
Deferred tax liability, net |  | 25,213 |  |  | 3,627 |  |  | 28,840 |
Other non-current liabilities |  | 15,386 |  |  | — |  |  | 15,386 |
Total liabilities assumed |  | $ | 215,609 |  |  | $ | 387 |  |  | $ | 215,996 |
Total purchase price |  | $ | 508,128 |  |  | $ | (2,414) |  |  | $ | 505,714 |
During the measurement period ended May 25, 2022, the Company recorded a cumulative net measurement period adjustment that decreased goodwill by $2,572, as presented in the table above. The Company made these measurement period adjustments to reflect facts and circumstances that existed as of the acquisition date and did not result from intervening events subsequent to such date. The excess of cost of the Fyber Acquisition over the net amounts assigned to the fair values of the net assets acquired was recorded as goodwill and was assigned to the Company’s App Growth Platform ("AGP") segment. The goodwill consists largely of the expected cash flows and future growth anticipated for the Company. The goodwill is not deductible for tax purposes. The identifiable intangible assets consist of publisher relationships, developed technology, trade names, customer relationships, and a favorable lease. The publisher relationships, developed technology, trade names, and customer relationships intangibles were assigned useful lives of 20.0 years, 7.0 years, 7.0 years, and 3.0 years, respectively. The below-market favorable lease was derived from Fyber's office lease in Berlin, Germany and, per ASC 842, Leases, will be combined with Fyber's right-of-use asset for that lease and will be amortized over the remaining life of that lease. The values for the identifiable intangible assets were determined using the following valuation methodologies: •Publisher Relationships - Multi-Period Excess Earnings Method •Developed Technology - Relief from Royalty Method •Trade Names - Relief from Royalty Method •Customer Relationships - With-and-Without Method •Favorable Lease - Income Approach The Company recognized $560 and $3,599 of costs related to the Fyber Acquisition in general and administrative expenses on the condensed consolidated statements of operations and comprehensive income / (loss) for the three months ended June 30, 2022 and 2021, respectively. Acquisition of AdColony Holding AS On April 29, 2021, the Company completed the acquisition of AdColony Holding AS, a Norway company (“AdColony”), pursuant to a Share Purchase Agreement (the "AdColony Acquisition"). The Company acquired all outstanding capital stock of AdColony in exchange for an estimated total consideration in the range of $400,000 to $425,000, to be paid as follows: (1) $100,000 in cash paid at closing (subject to customary closing purchase price adjustments), (2) $100,000 in cash to be paid six months after closing, and (3) an estimated earn-out in the range of $200,000 to $225,000, to be paid in cash, based on AdColony achieving certain future target net revenue, less associated cost of goods sold (as such term is referenced in the Share Purchase Agreement), over a 12-month period ending on December 31, 2021 (the “Earn-Out Period”). Under the terms of the earn-out, the Company would pay the seller a certain percentage of actual net revenue (less associated cost of goods sold, as such term is referenced in the Share Purchase Agreement) of AdColony, depending on the extent to which AdColony achieves certain target net revenue (less associated cost of goods sold, as such term is referenced in the Share Purchase Agreement) over the Earn-Out Period. The earn-out payment will be made following the expiration of the Earn-Out Period. AdColony is a leading mobile advertising platform servicing advertisers and publishers. AdColony’s proprietary video technologies and rich media formats are widely viewed as a best-in-class technology delivering third-party verified viewability rates for well-known global brands. With the addition of AdColony, the Company expanded its collective experience, reach, and suite of capabilities to benefit mobile advertisers and publishers around the globe. Performance-based spending trends by large, established brand advertisers present material upside opportunities for platforms with unique technology deployable across exclusive access to inventory. On August 27, 2021, the Company entered into an Amendment to Share Purchase Agreement (the “Amendment Agreement”) with AdColony and Otello Corporation ASA, a Norway company and AdColony's previous parent company. Pursuant to the Amendment Agreement, the Company and Otello agreed to set a fixed dollar amount of $204,500 for the earn-out payment obligation, to set January 15, 2022, as the payment due date for such payment amount, and to eliminate all of the Company’s earn-out support obligations under the Share Purchase Agreement. As a result, the Company recognized an $8,913 reduction of the earn-out payment obligation in change in fair value of contingent consideration on the condensed consolidated statement of operations and comprehensive income / (loss) for the fiscal second quarter ended September 30, 2021. The Company paid the cash consideration amounts that were due at closing and on October 26, 2021, with a combination of available cash-on-hand and borrowings under the Company’s senior credit facility. The payment made on October 26, 2021, was reduced to $98,175 due to an adjustment for the impact of accrued and unpaid taxes to the net working capital acquired. The difference between the amount due of $100,000 and amount paid resulted in an adjustment to goodwill. On January 15, 2022, the Company paid the AdColony Acquisition earn-out consideration of $204,500 with available cash-on-hand and an additional $179,000 of borrowings under the New Credit Agreement. The fair values of the assets acquired and liabilities assumed at the date of acquisition are presented as follows:
|  | April 29, 2021 |  | Measurement Period Adjustments |  | April 29, 2021 (adjusted)
Assets acquired |  |  |  |  |  |
Cash |  | $ | 24,793 |  |  | $ | — |  |  | $ | 24,793 |
Accounts receivable |  | 57,285 |  |  | — |  |  | 57,285 |
Other current assets |  | 1,845 |  |  | — |  |  | 1,845 |
Property and equipment |  | 1,566 |  |  | — |  |  | 1,566 |
Right-of-use asset |  | 2,460 |  |  | — |  |  | 2,460 |
Customer relationships |  | 102,400 |  |  | (600) |  |  | 101,800 |
Developed technology |  | 51,100 |  |  | — |  |  | 51,100 |
Trade names |  | 36,100 |  |  | (100) |  |  | 36,000 |
Publisher relationships |  | 4,400 |  |  | — |  |  | 4,400 |
Goodwill |  | 202,552 |  |  | (3,502) |  |  | 199,050 |
Other non-current assets |  | 131 |  |  | — |  |  | 131 |
Total assets acquired |  | $ | 484,632 |  |  | $ | (4,202) |  |  | $ | 480,430 |
Liabilities assumed |  |  |  |  |  |
Accounts payable |  | $ | 21,140 |  |  | $ | — |  |  | $ | 21,140 |
Accrued license fees and revenue share |  | 28,920 |  |  | — |  |  | 28,920 |
Accrued compensation |  | 8,453 |  |  | — |  |  | 8,453 |
Other current liabilities |  | 1,867 |  |  | — |  |  | 1,867 |
Deferred tax liability, net |  | 10,520 |  |  | (2,377) |  |  | 8,143 |
Other non-current liabilities |  | 1,770 |  |  | — |  |  | 1,770 |
Total liabilities assumed |  | $ | 72,670 |  |  | $ | (2,377) |  |  | $ | 70,293 |
Total purchase price |  | $ | 411,962 |  |  | $ | (1,825) |  |  | $ | 410,137 |
During the measurement period ended April 29, 2022, the Company recorded a cumulative net measurement period adjustment that decreased goodwill by $3,502, as presented in the table above. The Company made these measurement period adjustments to reflect facts and circumstances that existed as of the acquisition date and did not result from intervening events subsequent to such date. The excess of cost of the AdColony Acquisition over the net amounts assigned to the fair values of the net assets acquired was recorded as goodwill and was assigned to the Company’s AGP segment. The goodwill consists largely of the expected cash flows and future growth anticipated for the Company. The goodwill is not deductible for tax purposes. The identifiable intangible assets consist of customer relationships, developed technology, trade names, and publisher relationships and were assigned useful lives of 8.0 years to 15.0 years, 7.0 years, 7.0 years, and 10.0 years, respectively. The values for the identifiable intangible assets were determined using the following valuation methodologies: •Customer Relationships - Multi-Period Excess Earnings Method •Developed Technology - Relief from Royalty Method •Trade Names - Relief from Royalty Method •Publisher Relationships - Cost Approach The Company recognized $150 and $2,871 of costs related to the AdColony Acquisition in general and administrative expenses on the condensed consolidated statements of operations and comprehensive income / (loss) for the three months ended June 30, 2022 and 2021, respectively. Pro Forma Financial Information (Unaudited) The pro forma information below gives effect to the Fyber Acquisition and the AdColony Acquisition (collectively, the “Acquisitions”) as if they had been completed on the first day of each period presented. The pro forma results of operations are presented for information purposes only. As such, they are not necessarily indicative of the Company’s results had the Acquisitions been completed on the first day of each period presented, nor do they intend to represent the Company’s future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the Acquisitions and does not reflect additional revenue opportunities following the Acquisitions. The pro forma information includes adjustments to record the assets and liabilities associated with the Acquisitions at their respective fair values, based on available information and to give effect to the financing for the Acquisitions.
|  |  |  |  |  | Three months ended June 30,
|  |  |  |  |  |  |  | 2021
|  |  |  |  |  |  |  | Unaudited
|  |  |  |  |  |  |  | (in thousands, except per share amounts)
Net revenue |  |  |  |  |  |  |  | $ | 180,472 |
Net income / (loss) attributable to controlling interest |  |  |  |  |  |  |  | $ | (18,417) |
Basic net income / (loss) attributable to controlling interest per common share |  |  |  |  |  |  |  | $ | (0.20) |
Diluted net income / (loss) attributable to controlling interest per common share |  |  |  |  |  |  |  | $ | (0.20) |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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