Acquisitions

3 Months Ended

Mar. 31, 2021

6. Acquisitions

2021 Acquisitions

In February 2021, the Company signed a share purchase agreement with Adjust GmbH, a leading mobile

app attribution, measurement and analytics company in Germany, which agreement, as amended and restated and further amended, provides for the Company to acquire all the outstanding shares of Adjust GmbH for (i)

598.0

million in cash, subject to certain purchase price adjustments, (ii) convertible securities that automatically convert into an aggregate number of shares of the Company’s Class A common stock determined by dividing $

352.0

million by the volume-weighted average trading price per share of our Class A common stock over any 10 consecutive full trading day period (chosen by the selling stockholder representative under the Purchase Agreement) within 20

trading days commencing with and following the closing of the IPO (the “Conversion Price”); and (iii) the assumption of up to

40.0

million in the aggregate of debt, accrued interest, and fees of Adjust, in each case upon the terms and subject to the conditions of the share purchase agreement. The transaction closed on April 20, 2021. The 20-day trading period expired on May 12. As of the date of issuance of these condensed consolidated financial statements, the Company has not received any notice designating the 10-day period for determining the Conversion Price. Due to the timing of this transaction close, as of the date of issuance of these condensed consolidated financial statements, the Company is in the process of finalizing the valuation and related accounting impact.

During the three months ended March 31, 2021, the Company recognized

earn-out

costs of $

27.2

million related to the Zenlife acquisition closed in 2020. These earn-out costs increased the book value of the acquired mobile game Apps, and are amortized over the remaining useful life of the originally acquired game Apps.

During the three months ended March 31, 2021, the Company also acquired certain mobile game Apps for an aggregated consideration of $8.6 million

In January 2021 the Company paid $60.0

million to Recoded, an independent foreign-based mobile game developer, in relation to a new game App acquired in 2020. In February 2021, the Company paid an additional

$90.0 million to Recoded related to deferred cash consideration on the acquisition closed in 2019.

2020 Acquisitions

Geewa

—On January 31, 2020, the Company acquired Geewa A.S. (“Geewa”), a privately held company specializing in mobile gaming. The transaction is expected to expand the Company’s Apps portfolio and has been accounted for as a business combination. The Company purchased all of the outstanding shares of the capital stock of Geewa for a total consideration of $25.6 million of which $23.5 million was paid in cash and the unpaid balance was attributed to a $2.1

million indemnity holdback that was paid in January 2021. Transaction costs incurred by the Company in connection with the acquisition, including professional fees, were

$0.3 million.

The following table summarizes the fair value of identifiable assets acquired and liabilities assumed (in thousands):


Cash	$	1,043
Accounts receivable and other current assets		1,457
Intangible assets

Apps—estimated useful life of 5 years		17,040
Tradename—estimated useful life of 5 years		260
Developed Technology—estimated useful life of 2 years		590
Property, equipment and other tangible assets		369

Goodwill		9,805
Accounts payable, accrued liabilities and other liabilities		(4,935	)

Total purchase consideration	$	25,629

The income approach was used to value the developed Apps and tradename. Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and assumed liabilities acquired and is primarily attributable to the assembled workforce and expected synergies at the time of the acquisition. Goodwill is not deductible for tax purposes.

Pro forma results of operations have not been presented because the effect of the acquisition was not material to the condensed consolidated statements of operations.

In March 2020, the Company completed a transaction to acquire a certain mobile game App from an independent foreign-based mobile game developer in exchange for an upfront cash consideration of $30.0

million and earn-out payments. The transaction was accounted for as an asset acquisition with the entire upfront cash consideration allocated to the acquired mobile game App. Additionally, the Company entered into a service and development agreement with the independent mobile game developer to support the initially acquired game App as well as to develop new game Apps. The earn-out payments are based on a predetermined percentage of revenue net of certain direct costs generated by the initially acquired game App, or additional game Apps developed under the service and development agreement, over the term of the agreement, which is initially two years, but which may renew for an additional two-year term. During the three months ended March 31, 2021 and 2020, the earn-outs incurred in connection with this acquisition were immaterial.