2018 Business Combinations

Sapho, Inc.

On November 13, 2018, the Company acquired all of the issued and outstanding securities of Sapho, Inc. (“Sapho”), whose technology is intended to advance the Company’s development of the intelligent workspace. The acquired technology enables efficient workstyles by creating a unified and customizable notification experience for business applications. The total preliminary cash consideration for this transaction was $182.9 million, net of $3.7 million cash acquired. Transaction costs associated with the acquisition were not significant.

Cedexis, Inc.

On February 6, 2018, the Company acquired all of the issued and outstanding securities of Cedexis, Inc. (“Cedexis”) whose solution is a real-time data driven service for dynamically optimizing the flow of traffic across public clouds and data centers that provides a dynamic and reliable way to route and manage Internet performance for customers moving towards hybrid and multi-cloud deployments. The total cash consideration for this transaction was $66.0 million, net of $6.0 million cash acquired. Transaction costs associated with the acquisition were not significant.

Purchase Accounting for the 2018 Business Combinations

The purchase prices for the companies acquired during the year ended December 31, 2018, which include Sapho and Cedexis (collectively, the "2018 Business Combinations"), were allocated to the respective acquired company's net tangible and intangible assets based on their estimated fair values as of the date of the acquisition. The allocation of the total purchase prices is summarized below (in thousands):



	Sapho			Cedexis
	Purchase Price Allocation		Asset Life	Purchase Price Allocation		Asset Life
Current assets	$	4,671		$	8,961
Intangible assets	53,600		5 years	27,200		1-6 years
Goodwill	144,173		Indefinite	44,003		Indefinite
Deferred taxes	—			3,173
Other assets	—			69
Assets acquired	202,444			83,406
Current liabilities assumed	3,323			5,711
Assumed debt	—			5,674
Other long term liabilities assumed	370			—
Deferred taxes	12,094			—
Net assets acquired	$	186,657		$	72,021

Current assets acquired in connection with the 2018 Business Combinations consisted primarily of cash, accounts receivable and other short-term assets. Current liabilities assumed in connection with the 2018 Business Combinations consisted primarily of accounts payable and other accrued expenses. Assumed debt for the Cedexis acquisition consisted primarily of short-term and long-term debt, which was paid in full subsequent to the acquisition date. The Company continues to evaluate certain assets and liabilities related to the Sapho acquisition that may be subject to change through the remainder of the measurement period, which will extend not more than twelve months from the acquisition date.

The goodwill related to the 2018 Business Combinations is not deductible for tax purposes and is comprised primarily of expected synergies from combining operations and other intangible assets that do not qualify for separate recognition.

Identifiable intangible assets acquired in connection with the 2018 Business Combinations (in thousands) and the weighted-average lives are as follows:



	Sapho		Asset Life	Cedexis		Asset Life
Customer relationships	$	1,600	5 years	$	2,000	1 year
Developed technology	52,000		5 years	23,800		5-6 years
Tradenames	—			1,400		1 year
Total	$	53,600		$	27,200

The Company has included the effect of the 2018 Business Combinations in its results of operations prospectively from the date of acquisition. The following unaudited pro-forma information combines the consolidated results of the operations of the Company and the 2018 Business Combinations as if the acquisitions had occurred on January 1, 2017, the first day of the Company’s fiscal year 2017 (in thousands):



	Twelve Months Ended December 31
	2018		2017
Revenues	$	2,977,155	$	2,838,880
Income from continuing operations	651,047		530,470
Net income (loss)	550,985		(56,601		)