Business Acquisitions

12 Months Ended

Jan. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Business Acquisitions

6 Business Acquisitions

Fiscal Year 2023 Acquisitions

Re:infer

On July 29, 2022, we acquired all of the outstanding capital stock of Re:infer, a natural language processing company focused on unstructured documents and communications. Re:infer uses machine learning technology to mine context from communication messages and transform them into actionable data. With this acquisition, we gained technology and an experienced team which we believe will accelerate our technology roadmap, expand the breadth of our current AI-powered automation capabilities, and unlock new automation opportunities for our customers. The Re:infer acquisition was accounted for as a business combination.

The total purchase consideration for the acquisition of Re:infer was $44.6 million, consisting of the following:

Cash paid at closing	$	30,117
Fair value of Class A common stock issued at closing (0.2 million shares)	2,965
Loan note to be paid on first anniversary of closing (included in accrued expenses and other current liabilities)	5,863
Loan note to be paid on second anniversary of closing (included in other liabilities, non-current)	5,570
Working capital adjustment	66
Total	$	44,581

At closing, we also issued an additional 0.4 million shares of Class A common stock that will be released to sellers in equal installments on the first, second, and third anniversaries of the closing date, subject to certain employment-related clawback provisions. The aggregate fair value of these shares totaled $7.6 million and will be expensed as compensation for post-acquisition services over the three years following the acquisition date.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):

	July 29, 2022
Net tangible assets	$	300
Intangible assets	13,100
Goodwill	34,351
Total assets acquired	47,751
Deferred tax liabilities assumed	(3,170)
Total	$	44,581

The following table sets forth the identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

	Fair Value (in thousands)		Estimated Useful Life (in years)
Developed technology	$	10,000	5.0
Customer relationships	3,100		3.0
Total	$	13,100

The acquisition of Re:infer generated goodwill of $34.4 million representing expected synergies and acquired skilled workforce. None of this goodwill is deductible for tax purposes.

During fiscal year 2023, we incurred transaction costs in connection with the Re:infer acquisition of $1.1 million, which are included in general and administrative expenses in the consolidated statements of operations.

Fiscal Year 2022 Acquisitions

Cloud Elements

On March 19, 2021, we acquired all of the outstanding capital stock of Cloud Elements, the provider of an API integration platform for SaaS application providers and the digital enterprise. The acquisition of Cloud Elements brought technology and an experienced team which we believe accelerates our technology roadmap in areas such as native integrations and system event automation triggers. The Cloud Elements acquisition was accounted for as a business combination.

The total purchase consideration for the acquisition of Cloud Elements was $36.1 million, which consisted of the following (in thousands):

	Amount
Cash	$	5,660
Fair value of common stock	30,467
Total	$	36,127

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):

	March 19, 2021
Cash	$	162
Accounts receivable	743
Other assets	1,996
Intangible assets	11,200
Goodwill	27,686
Total assets acquired	41,787
Total liabilities assumed	(5,660)
Total	$	36,127

The following table sets forth the identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

	Fair Value (in thousands)		Estimated Useful Life (in years)
Developed technology	$	6,600	5.0
Customer relationships	4,500		3.0
Trade name	100		3.0
Total	$	11,200

The acquisition of Cloud Elements generated $27.7 million in goodwill due to the synergies expected and the skilled workforce acquired. None of this goodwill is deductible for tax purposes.

We incurred transaction costs in connection with the Cloud Elements acquisition of $1.1 million. Of these transaction costs, $0.9 million was included in general and administrative expenses in the consolidated statement of operations for fiscal year 2022, and the remainder was recognized in fiscal year 2021.