Acquisitions

Fiscal 2017

Sookasa, Inc.

In March 2016, we acquired Sookasa, Inc. ("Sookasa"), a provider of encryption, security and compliance solutions for cloud-based integration partners. We acquired all of the outstanding equity interests of Sookasa for cash consideration of $0.3 million, which included the settlement of the outstanding indebtedness of Sookasa with SVB Financial Group, and the issuance of 10,000 shares of our common stock to SVB Financial Group in connection with such settlement. The total aggregate consideration, inclusive of cash, debt settlement and equity, was approximately $0.4 million, of which $0.4 million was allocated to goodwill. The goodwill is primarily attributable to the acquired assembled workforce and is not expected to be deductible for income tax purposes.

The results of operations of Sookasa, since the acquisition date, were not material to our consolidated results of operations for the fiscal year ended February 28, 2017. The following unaudited pro forma information presents the combined results of operations of Barracuda and Sookasa as if the acquisition had been completed on March 1, 2015, the beginning of the comparable prior annual reporting period. The unaudited pro forma information does not reflect any cost saving synergies from operating efficiencies or the effect of the incremental costs incurred in integrating the two companies. Accordingly, this unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.



	Year Ended February 28/29,
	2017		2016
	(in thousands)
Pro forma revenue	$	352,660	$	320,411
Pro forma net income (loss)	$	10,151	$	(7,569	)

Fiscal 2016

Intronis, Inc.

In October 2015, we acquired all outstanding equity interests of Intronis, a leader in providing data protection solutions to managed service providers. The acquisition expanded our channel reach with the addition of Intronis’ existing customer base and its purpose-built platform designed to streamline how managed service providers service the data protection needs of their end customers. The aggregate purchase consideration was $65.3 million in cash. During fiscal 2017, we made payments of $6.7 million related to amounts held back, at the acquisition date, for potential indemnification obligations of the equityholders of Intronis.

We recorded the assets acquired and liabilities assumed at their estimated fair value, with the difference between the fair value of the net assets acquired and the purchase consideration reflected as goodwill. The following table reflects the fair values of assets acquired and liabilities assumed subsequent to the measurement period adjustments (in thousands):



Cash	$	2,327
Accounts receivable	376
Other current assets	654
Property and equipment	4,203
Other non-current assets	750
Developed technology	21,500
Customer relationships	11,870
Trade name	300
Goodwill	29,718
Accounts payable	(685		)
Accrued expenses	(1,149		)
Deferred revenue (current)	(649		)
Deferred tax liabilities	(3,930		)
Total value of assets acquired and liabilities assumed	$	65,285

As of the acquisition date, Intronis’ developed technology, customer relationships and trade name had weighted-average useful lives of 7.0 years, 7.0 years and 4.0 years, respectively. The total weighted-average useful life of these acquired intangible assets is 7.0 years. The goodwill is primarily attributed to the synergies expected to be realized following the acquisition. Goodwill is not expected to be deductible for income tax purposes.

Included in our results of operations for fiscal 2016 are $9.4 million and $1.3 million of revenue and net loss, respectively, attributable to Intronis since the acquisition.

The following unaudited pro forma information presents the combined results of operations of Barracuda and Intronis as if the acquisition had been completed on March 1, 2014, the beginning of the comparable prior annual reporting period. The unaudited pro forma information includes (i) amortization associated with estimates for the acquired intangible assets; and (ii) the associated tax impact on these unaudited pro forma adjustments and certain changes in judgment of valuation allowance as a combined business. The unaudited pro forma information does not reflect any cost saving synergies from operating efficiencies or the effect of the incremental costs incurred in integrating the two companies. Accordingly, this unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations.



	Year Ended February 28/29,
	2016			2015
	(in thousands)
Pro forma revenue	$	333,963		$	295,738
Pro forma net loss	$	(12,727	)	$	(67,665	)

Other

In July 2015, we completed an acquisition for total consideration of approximately $1.1 million, which included an estimated fair value for contingent consideration of $0.3 million. $0.7 million was allocated to intangible assets and $0.3 million to goodwill. The goodwill is primarily attributed to the synergies expected to be realized following the acquisition and is expected to be deductible for income tax purposes. As of the acquisition date, customer relationships and developed technology had weighted-average useful lives of 7.0 years and 1.0 year, respectively. The results of operations, since the acquisition date, and pro forma information were not material to our consolidated results of operations for the year ended February 29, 2016.

As of February 28, 2017, we estimated the fair value of the contingent consideration liability to be $0.2 million.

Fiscal 2015

C2C Systems Limited

In August 2014, we completed our acquisition of C2C Systems Limited ("C2C"), a provider of personal storage table file management, email archiving and information management solutions based in the United Kingdom, and were required to pay contingent consideration up to $4.9 million upon the attainment of certain billings levels and performance integration targets through August 2017. As of February 28, 2017 and February 29, 2016, we estimated the fair value of the contingent consideration liability to be $0.7 million and $1.2 million, respectively. In fiscal 2017, $0.5 million was recorded as a reduction of research and development expenses and, in fiscal 2016, $1.9 million was recorded as a reduction of research and development and sales and marketing expenses.

During the fourth quarter of fiscal 2017, as part of a legal settlement, an agreement was reached to resolve all potential amounts due, or which could become due, to the shareholders of C2C in connection with the acquisition, including obligations for the contingent consideration and the purchase consideration held back for potential indemnification claims. We agreed to pay approximately $1.25 million which would settle the contingent consideration liability of $0.7 million and the purchase consideration held back for potential indemnification claims of $0.5 million. All payments were made in March 2017. Refer to Note 9 to the Consolidated Financial Statements for additional information regarding the settlement of the C2C legal matter.