Business Acquisitions

3 Months Ended

Feb. 28, 2025

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Business Acquisitions

Note 4. Business Acquisitions

We acquired OpNet during the fourth quarter of 2023. OpNet is a

fixed wireless broadband service provider in Italy and also owned

a majority of the common shares of Tessellis S.p.A. (“Tessellis”),

a telecommunications company publicly listed on the Italian

stock exchange. Upon obtaining control of OpNet, we accounted

for under this transaction under the acquisition method of

accounting, which requires that the assets acquired, including

identifiable intangible assets, and liabilities assumed to be

recognized at their respective fair values as of the acquisition

date.

OpNet

We historically owned 47.4% of the common shares and 50.0% of

the voting rights of OpNet and various classes of convertible

preferred stock issued by OpNet (the “preferred shares”). On

November 30, 2023, we provided notice of our intent to convert

certain classes of our preferred shares into common shares and,

as a result, we obtained control of OpNet. Upon conversion on

May 7, 2024, our ownership increased to 57.5% of the common

shares and our voting rights increased to 72.5% of the aggregate

voting rights of OpNet.

Upon obtaining control of OpNet on November 30, 2023, the

assets and liabilities of OpNet have been included in our

consolidated financial statements. The initial consolidation of

OpNet was accounted for under the acquisition method of

accounting and we remeasured our previously existing interests

at fair value and recognized a gain of $115.8 million, representing

the excess of the fair value of our previously existing interests

over the carrying value of our investment of $201.6 million.

The fair value of the previously existing interests was measured

based on an estimate of what could be recognized in a sale

transaction for wholesale net operating assets operating assets

of OpNet, which have been classified as held for sale. The

remaining identifiable assets and assumed liabilities of OpNet

represented the assets and liabilities of Tessellis. An enterprise

value for Tessellis was estimated based on its market

capitalization at November 30, 2023, which was then allocated to

the identifiable assets, including intangible assets, liabilities, and

noncontrolling interests of Tessellis using an income approach,

which calculates the present value of the estimated economic

benefit of future cash flows, in order to determine the fair value

of the identified customer relationships and Tessellis trade

name. Property and equipment and developed technology assets

were valued using a replacement cost methodology. Critical

estimates included future expected cash flows, including

forecasted revenues and expenses, and applicable discount

rates. Discount rates used to compute the present value of

expected net cash flows were based upon estimated weighted

average cost of capital. The initial allocation of the purchase

price resulted in the recognition of goodwill relating to Tessellis

of $127.1 million. No consideration was transferred in connection

with the consolidation.

The initial estimated purchase price allocation as of November

30, 2023 for Tessellis was revised during the first quarter of 2024

as new information was received and analyzed resulting in an

increase in intangible assets of $39.3 million, a decrease in

property and equipment of $12.3 million, and a decrease in

goodwill of $27.0 million.

In February 2024, OpNet agreed to sell substantially all of its

wholesale operating assets to Wind Tre S.p.A., a subsidiary of CK

Hutchison Group Telecom Holdings Ltd. The sale closed in

August 2024 and we received net cash proceeds of

$322.8 million and recognized a pre-tax gain on sale of

$3.5 million. The sale of OpNet’s operating assets did not include

our interest in Tessellis.

During 2024, Tessellis executed various acquisitions and, as a

result, recognized assets and liabilities of $24.5 million and

$18.8 million, respectively, on the acquisition dates. Total assets

primarily relate to goodwill, property and equipment, intangible

assets, and short-term trade receivables. Total liabilities primarily

relate to financial debt assumed and trade payables. The primary

acquisition executed during 2024 was the acquisition of a 97.2%

ownership interest in Go Internet S.p.A. (“Go Internet”) for a total

consideration of €4.1 million. We are in the process of finalizing

the purchase price allocation adjustments related to the

identified assets and may adjust these amounts upon completion

of our assessment.