Acquisitions

12 Months Ended

Dec. 03, 2021

Frame.io

On October 7, 2021, we completed the acquisition of Frame.io, a privately held company that provides a cloud-based video collaboration platform, for approximately $1.18 billion, primarily in cash consideration. The financial results of Frame.io have been included in our Consolidated Financial Statements since the date of the acquisition. Frame.io is reported as part of our Digital Media reportable segment.

The table below represents the preliminary purchase price allocation to total identifiable intangible assets acquired and net liabilities assumed based on their respective estimated fair values as of October 7, 2021. The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the reporting date. Fair values associated with the net tax liabilities assumed and their related impact to goodwill were pending finalization as of the reporting date.


(dollars in millions)	Amount		Weighted Average Useful Life (years)
Purchased technology	$	331	4
In-process research and development (1)	19		N/A
Trademarks	4		3
Customer contracts and relationships	3		10


Total identifiable intangible assets	357
Net liabilities assumed	(39)		N/A
Goodwill (2)	865		N/A
Total purchase price	$	1,183

_________________________________________

(1) Capitalized as purchased technology and considered indefinite lived until the completion or abandonment of the associated research and development efforts.

(2) Non-deductible for tax-purposes.

Pro forma financial information has not been presented for the Frame.io acquisition as the impact to our Consolidated Financial Statements was not material.

Workfront

On December 7, 2020, we completed the acquisition of Workfront, a privately held company that provides a workflow platform, for approximately $1.52 billion in cash consideration. The financial results of Workfront have been included in our Consolidated Financial Statements since the date of the acquisition. Workfront is reported as part of our Digital Experience reportable segment.

The table below represents the final purchase price allocation to total identifiable intangible assets acquired and net liabilities assumed based on their respective estimated fair values as of December 7, 2020. The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the reporting date. During fiscal 2021, we recorded immaterial purchase accounting adjustments based on changes to management’s estimates and assumptions in regards to net tax liabilities assumed and their related impact to goodwill.


(dollars in millions)	Amount		Weighted Average Useful Life (years)
Customer contracts and relationships	$	290	10
Purchased technology	100		3
Backlog	40		2
Trademarks	30		5
Total identifiable intangible assets	460
Net liabilities assumed	(31)		N/A
Goodwill (1)	1,095		N/A
Total purchase price	$	1,524

_________________________________________

(1) Non-deductible for tax-purposes.

Pro forma financial information has not been presented for the Workfront acquisition as the impact to our Consolidated Financial Statements was not material.

Allegorithmic

On January 23, 2019, we completed the acquisition of Allegorithmic, a privately held 3D editing and authoring software company for gaming and entertainment, and integrated it into our Digital Media reportable segment. Prior to the acquisition, we held an equity interest that was accounted for as an equity-method investment. We acquired the remaining equity interest for approximately $106 million in cash consideration. The total purchase price, inclusive of the acquisition-date fair-value of our pre-existing equity interest, was approximately $161 million.

In conjunction with the Allegorithmic acquisition, we separately recognized an investment gain of approximately $42 million, which represents the difference between the $55 million acquisition-date fair value of our pre-existing equity interest and our previous carrying amount.

Under the acquisition method of accounting, the total final purchase price was allocated to Allegorithmic’s net tangible and intangible assets based upon their estimated fair values as of the acquisition date. The excess purchase price over the value of the net tangible and identifiable intangible assets was recorded as goodwill. Of the total purchase price, $126 million was allocated to goodwill that was non-deductible for tax purposes, $45 million to identifiable intangible assets and the remainder to net liabilities assumed.

Pro forma financial information has not been presented for the Allegorithmic acquisition as the impact to our Consolidated Financial Statements was not material.