Business Combinations

12 Months Ended

Dec. 31, 2018

2018 Business Combinations

During the year ended December 31, 2018, we completed four business combinations for an aggregate purchase price of $37.6 million. In allocating the aggregate purchase price based on the estimated fair values, we recorded a total of $13.5 million of developed technology intangible assets (to be amortized over estimated useful lives of five years), $2.2 million of deferred tax liabilities and $26.1 million of goodwill, of which $8.0 million of the goodwill amount is deductible for income tax purposes.

2017 Business Combinations

SkyGiraffe

On October 31, 2017, we completed the acquisition of a privately-held company, SkyGiraffe Ltd. (SkyGiraffe), by acquiring all issued and outstanding common shares of SkyGiraffe for approximately $32.3 million in an all-cash transaction to enhance the consumer product-like mobile experience of our solutions.

The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:



	Purchase Price Allocation (in thousands)			Useful Life (in years)
Net tangible assets acquired	$	675
Intangible assets:
Developed technology	15,600			5
Goodwill ⁽²⁾	19,386
Net deferred tax liabilities ⁽¹⁾	(3,341		)
Total purchase price	$	32,320


(1)	Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.


(2)	The goodwill balance for this business combination is not deductible for income tax purposes.

Other 2017 Business Combinations

We also completed three other business combinations for an aggregate purchase price of approximately $26.6 million in cash. In allocating the aggregate purchase price based on the estimated fair values, we recorded $9.9 million of developed technology intangible assets (to be amortized over estimated useful lives of five years), $3.6 million of deferred tax liabilities and a total of $20.3 million of goodwill, of which $4.1 million of the goodwill amount is deductible for income tax purposes.

2016 Business Combinations

During the year ended December 31, 2016, we completed two business combinations for an aggregate purchase price of $34.1 million in cash. In allocating the aggregate purchase price based on the estimated fair value, we recorded a total of $12.8 million of developed technology intangible assets (to be amortized over estimated useful lives of five to six years), $4.9 million of deferred tax liabilities and a total of $26.7 million of goodwill, of which none is deductible for income tax purposes.

For all of our 2018, 2017 and 2016 business combinations, the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. We believe the goodwill represents the synergies expected from expanded market opportunities when integrating the acquired technologies with our offerings. Aggregate acquisition-related costs associated with our business combinations of $1.0 million, $2.4 million and $1.0 million for the years ended December 31, 2018, 2017 and 2016, respectively are included in general and administrative expenses in our consolidated statement of comprehensive loss. The results of operations of all of our business combinations have been included in our consolidated financial statements from their respective dates of purchase. These business combinations did not have a material impact on our consolidated financial statements, and therefore historical and pro forma disclosures have not been presented.