Acquisitions

9 Months Ended

May 31, 2022

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

During fiscal 2022 and 2021, we completed acquisitions of several businesses, with the most significant cash flows related to the acquisitions of CUSIP Global Services ("CGS"), Cobalt Software, Inc. ("Cobalt") and Truvalue Labs, Inc. ("TVL").

CUSIP Global Services

On March 1, 2022, we completed the acquisition of CGS, previously operated by S&P Global Inc. on behalf of the American Bankers Association ("ABA"), for a cash purchase price of $1.932 billion, inclusive of preliminary working capital adjustments. CGS manages a database of 60 different data elements uniquely identifying more than 50 million global financial instruments. It is the foundation for security master files relied on by critical front, middle and back-office functions. CGS is the exclusive provider of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers globally and also acts as the official numbering agency for International Securities Identification Number ("ISIN") identifiers in the United States and as a substitute number agency for more than 35 other countries. We anticipate that the CGS acquisition will significantly expand our critical role in the global capital markets. The CGS purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We expect to finalize the allocation of the purchase price for CGS as soon as possible, but in any event, no later than one year from the acquisition date. The preliminary purchase price allocation is subject to change pending a final valuation of the assets and liabilities acquired and the finalization of working capital adjustments.

The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:

	Acquisition Date Fair Value		Acquisition Date Useful Life	Amortization Method
	(in thousands)		(in years)
Current assets1	$	38,111
Amortizable intangible assets
Revenues-generating contract	1,583,000		36 years	Straight-line
Client relationships	164,000		26 years	Straight-line
Acquired databases	46,000		15 years	Straight-line
Goodwill	206,981
Current liabilities2	(104,354)
Deferred revenues, long-term	(1,482)
Total purchase price	$	1,932,256

1.Includes an accounts receivable balance of $38.0 million.

2.Includes a deferred revenues balance of $98.8 million.

Goodwill totaling $207.0 million represents the excess of the CGS purchase price over the fair value of net assets acquired, representing future economic benefits that we expect to achieve as a result of the acquisition, and is included in the Americas segment. Goodwill generated from the CGS acquisition is deductible for income tax purposes. The majority of the net assets acquired relate to a Revenues-generating contract intangible which is a renewable license agreement with the ABA to manage the issuance, maintenance and access to the CUSIP numbering system and related database of CUSIP identifiers. This intangible asset's valuation and associated useful life considers the term of the current agreement and the likelihood of renewals. The useful life assigned to the Client relationships intangible asset considers the strong historical client retention as a basis for expected future retention. The useful life assigned to Acquired databases considers there are limited changes to the data on an annual basis, which extends the life of the acquired asset.

The results of CGS's operations have been included in our Consolidated Financial Statements, within the Americas, EMEA, and Asia Pacific segments, beginning with the closing of the acquisition on March 1, 2022. Pro forma information has not been presented because the effect of the CGS acquisition is not material to our Consolidated Financial Statements.

Cobalt Software, Inc.

On October 12, 2021, we acquired all of the outstanding shares of Cobalt for a purchase price of $50.0 million, net of cash acquired. Cobalt is a leading portfolio monitoring solutions provider for the private capital industry. This acquisition advances our strategy to scale our data and workflow solutions through targeted investments as part of our multi-year investment plan and expands our private markets offering. The Cobalt purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We expect to finalize the allocation of the purchase price for Cobalt as soon as possible, but in any event, no later than one year from the acquisition date. The preliminary purchase price allocation is subject to change due to the finalization of deferred tax balances.

The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:

	Acquisition Date Fair Value		Acquisition Date Useful Life	Amortization Method
	(in thousands)		(in years)
Current assets	$	540
Amortizable intangible assets
Software technology	7,750		5 years	Straight-line
Client relationships	4,800		11 years	Straight-line
Goodwill	43,554
Other assets	34
Current liabilities	(6,653)
Other liabilities	(7)
Total purchase price	$	50,018

Goodwill totaling $43.6 million represents the excess of the Cobalt purchase price over the fair value of net assets acquired and is included in the Americas and EMEA segments. Goodwill generated from the Cobalt acquisition is not deductible for income tax purposes. The results of Cobalt's operations have been included in our Consolidated Financial Statements, within the Americas and EMEA segments, beginning with its acquisition on October 12, 2021. Pro forma information has not been presented because the effect of the Cobalt acquisition is not material to our Consolidated Financial Statements.

Truvalue Labs, Inc.

On November 2, 2020, we acquired all of the outstanding shares of TVL for a purchase price of $41.9 million, net of cash acquired. TVL is a leading provider of environmental, social, and governance ("ESG") information. TVL applies artificial intelligence driven technology to over 100,000 unstructured text sources in multiple languages, including news, trade journals, and non-governmental organizations and industry reports, to provide daily signals that identify positive and negative ESG behavior. The acquisition of TVL further enhances our commitment to providing industry leading access to ESG data across our platforms. The TVL purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We finalized the purchase accounting for the TVL acquisition during the third quarter of fiscal 2021.

The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:

	Acquisition Date Fair Value		Acquisition Date Useful Life	Amortization Method
	(in thousands)		(in years)
Current assets	$	812
Amortizable intangible assets
Software technology	8,100		7 years	Straight-line
Trade names	2,800		15 years	Straight-line
Client relationships	900		12 years	Straight-line
Goodwill	30,058
Other assets	5,299
Current liabilities	(3,069)
Other liabilities	(2,984)
Total purchase price	$	41,916

Goodwill totaling $30.1 million represents the excess of the TVL purchase price over the fair value of net assets acquired and is included in the Americas segment. Goodwill generated from the TVL acquisition is not deductible for income tax purposes. The results of TVL's operations have been included in our Consolidated Financial Statements, within the Americas segment, beginning with its acquisition on November 2, 2020. Pro forma information has not been presented because the effect of the TVL acquisition is not material to our Consolidated Financial Statements.