3. Acquisition

On December 15, 2016, the Company acquired certain assets and liabilities of Camouflage Software Inc. (“Camouflage”), a private company based in Newfoundland, Canada. Camouflage is a provider of data management, security and data masking solutions. The Company acquired Camouflage for cash consideration of $4.5 million. Approximately $0.6 million of the consideration is a holdback payment commitment due 24 months from the date the acquisition closes. Imperva acquired certain tangible assets and also assumed liabilities of Camouflage. Substantially all of the consideration was allocated to goodwill and intangible assets, such as developed technology, customer relationships and trade name.

The acquisition was accounted for in accordance with Accounting Standards Codification (ASC) No. 805, Business Combinations, and the results of operations of the acquisition have been included in the Company’s consolidated results of operations from the date of the acquisition. The acquisition was not material to the Company’s results of operations in the period of acquisition.

While management uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the business combination date, its estimates and assumptions are subject to refinement. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. The Company records adjustments to assets acquired or liabilities assumed subsequent to the purchase price allocation period in its operating results in the period in which the adjustments were determined.

The purchase consideration allocated to the tangible assets acquired is assigned based on the fair values as of the date of the acquisition. The Company believes that these identified intangible assets will have no residual value after their estimated economic useful lives. The identifiable intangible assets are subject to amortization on a straight-line basis over a seven-year estimated useful life as this best approximates the benefit period related to these assets.

The excess of the purchase consideration over the identified tangible and intangible assets, less liabilities assumed, is recorded as goodwill and primarily reflects the value of the synergies expected to be generated from combining the Company’s and the acquired entities’ technology and operations.

The following table summarizes the preliminary allocation of the consideration to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date based on information available at the business combination date (in thousands):

Acquired Technology	$	1,050
Customer relationships		480
Trade name and other		280
Goodwill		2,476
Total intangible assets acquired		4,286
Other acquired tangible assets		363
Liability assumed		(130	)
Fair value of assets acquired	$	4,519

The total purchase consideration was allocated using the information available at the business combination date. Goodwill recorded in connection with the acquisition is deductible for U.S. income tax purposes.

The Company expensed the related acquisition costs, consisting primarily of legal costs in the amount of $0.1 million in general and administrative expenses. The Company’s management believes that the goodwill represents the synergies expected from combining the acquired technology and operations with those of Imperva.

The results of operations related to the Camouflage assets and liabilities have been included in the Company’s consolidated statements of operations from the acquisition date. Pro forma results of operations have not been presented because the acquisition was not material to the Company’s results of operations.