Acquisitions

12 Months Ended

Oct. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions in fiscal 2022

In fiscal 2022, HP completed two acquisitions. HP estimated the preliminary fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The preliminary fair values of net tangible assets and intangible assets acquired were based on preliminary valuations performed by third-party valuation specialists, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). The primary areas that remain preliminary relate to the fair values of intangible assets acquired, certain tangible assets and liabilities acquired, certain legal matters, income and non-income based taxes and residual goodwill. We expect to continue to obtain information to assist us in determining the fair values of the net assets acquired during the measurement period.

Pro forma results of operations for these acquisitions have not been presented because they are not material to HP’s consolidated results of operations, either individually or in the aggregate. Goodwill, which represents the excess of the purchase price over the net tangible and intangible assets acquired, is not deductible for tax purposes.

The following table presents the aggregate estimated fair values of the assets acquired and liabilities assumed, including those items that are still preliminary allocations, for the acquisitions in fiscal 2022:


	In millions
Goodwill	$	1,766
Amortizable intangible assets	1,429
Net assets acquired	(337)
Total fair value of consideration	$	2,858

Acquisition of Poly

In fiscal 2022, HP completed the acquisition of Poly, a leading global provider of workplace collaboration solutions at a total enterprise value of $3.3 billion, inclusive of the Exchange Offer. The purchase consideration of $2.8 billion included payment to shareholders in an all-cash transaction for $40 per share, amounting to $1.8 billion and repayment of Poly’s existing term loan of $1.0 billion. Poly's results of operations are included within the Personal Systems segment. The financial results of Poly are included in our Consolidated Financial Statements for the year ended October 31, 2022, from the date of the acquisition.

On September 1, 2022, HP consummated its offer to exchange approximately $0.5 billion of outstanding notes issued by Poly for new notes issued by HP with the same interest rate, interest payment dates, maturity date and redemption terms as the exchanged Poly Notes. See Note 11, “Borrowings” for detailed information.

Of the total consideration, $109 million related to cash settlement of restricted stock units and performance-based restricted stock units was allocated to the purchase consideration, and $81 million was expensed immediately. In addition, HP assumed unvested restricted stock units and performance-based restricted stock units (“assumed awards”) with a preliminary estimated fair value of $47 million allocated to future services to be expensed over the remaining service periods on a straight-line basis, of which $4 million was attributed to purchase consideration. For the year ended October 31, 2022, HP recorded stock-based compensation expense of $3 million related to these assumed awards.

Acquisitions in fiscal 2021

In fiscal 2021, HP completed four acquisitions. The estimated fair value of the assets acquired and liabilities assumed at the acquisition date for all four acquisitions, as set forth in the table below.

Pro forma results of operations for these acquisitions have not been presented because they were not material to HP’s consolidated results of operations, either individually or in the aggregate. Goodwill, which represents the excess of the purchase price over the net tangible and intangible assets acquired, is not deductible for tax purposes.

The following table presents the aggregate estimated fair values of the assets acquired and liabilities assumed for all of HP's acquisitions in fiscal 2021:


	In millions
Goodwill	$	400
Amortizable intangible assets	385
Net assets acquired	120
Total fair value of consideration	$	905

Acquisition of HyperX, the gaming division of Kingston Technology Company

HP’s largest acquisition in fiscal 2021 was its acquisition of HyperX, the gaming division of Kingston Technology Company which was completed in June 2021 with a total fair value purchase consideration of $412 million. The acquisition supports HP’s strategy to drive growth in gaming and peripherals within the Personal Systems segment. In connection with this acquisition, HP recorded approximately $112 million of goodwill and $197 million of amortizable purchased intangible assets.