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Business Combination
9 Months Ended
Jan. 29, 2021
Business Combinations [Abstract]  
Business Combination

3. Business Combination

 

Cloud Jumper Corporation Acquisition

 

On April 28, 2020, we acquired all the outstanding shares of privately-held Cloud Jumper Corporation (Cloud Jumper), a provider of virtual desktop infrastructure and remote desktop services solutions based in North Carolina, for approximately $34 million in cash.

 

The preliminary acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions):

 

 

 

Amount

 

Developed technology

 

$

16

 

Customer contracts/relationships

 

 

6

 

Goodwill

 

 

12

 

Other assets

 

 

1

 

Total assets acquired

 

 

35

 

Liabilities assumed

 

 

(1

)

Total purchase price

 

$

34

 

 

 

Spot, Inc. Acquisition

 

On July 9, 2020, we acquired all the outstanding shares of privately-held Spot, Inc. (Spot), a provider of compute management cost optimization services on the public clouds based in Israel, for $340 million in cash. The acquisition of Spot will allow us to establish an application driven infrastructure for the continuous optimization of both compute and storage, which we believe will facilitate customers deploying more applications to the cloud.

 

The preliminary acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions):

 

 

 

Amount

 

Cash

 

$

24

 

Intangible assets

 

 

84

 

Goodwill

 

 

249

 

Other assets

 

 

6

 

Total assets acquired

 

 

363

 

Liabilities assumed

 

 

(23

)

Total purchase price

 

$

340

 

 

The components of the Spot intangible assets acquired were as follows (in millions, except useful life):

 

 

 

Amount

 

 

Estimated useful life

(years)

Developed technology

 

$

53

 

 

5

Customer contracts/relationships

 

 

28

 

 

5

Trade name

 

 

3

 

 

3

Total intangible assets

 

$

84

 

 

 

 

The acquired assets and assumed liabilities of Spot and Cloud Jumper were recorded at their estimated fair values. We determined the estimated fair values with the assistance of valuations and appraisals performed by third party specialists and estimates made by management. We expect to realize revenue synergies, leverage and expand the existing Spot and Cloud Jumper sales channels and product development resources, and utilize their existing workforces. We also anticipate opportunities for growth through the ability to leverage additional future products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of their identifiable net assets acquired, and as a result, we have recorded goodwill in connection with both of these acquisitions. The goodwill is not deductible for income tax purposes.

 

 

The results of operations related to the acquisition of both Spot and Cloud Jumper have been included in our condensed consolidated statements of operations from their respective acquisition dates. Pro forma results of operations have not been presented because the impact from these acquisitions would not have been material to our consolidated results of operations for each of the three and nine months ended January 29, 2021 and January 24, 2020.