Acquisitions

6 Months Ended

Jun. 30, 2024

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

Acquisitions

Acquisitions

Business acquisition costs during the three and six months ended June 30, 2024 were $2.2 million and $2.4 million, respectively, and are included in general and administrative expense in the interim condensed consolidated statements of income. Pro forma results of operations for the acquisition completed during the six months ended June 30, 2024 have not been presented because the effects of the acquisition were not material to the Company's consolidated financial results. Revenue and

earnings of the acquired company since the date of the acquisition are included in the Company's interim condensed consolidated statements of income and are not presented separately because they are not material.

Noname Security

In June 2024, the Company acquired all the outstanding equity interests of Noname Gate Ltd. ("Noname Security") for $452.3 million in cash, subject to post-closing adjustments. Noname Security is intended to expand the Company’s existing API Security offering by providing more flexible deployment options, extensive vendor integrations and enhanced attack analysis. The Company believes this acquisition will accelerate its ability to meet increasing customer and market demand. As of June 30, 2024, the purchase price allocation is preliminary, pending finalization of the fair value of the intangible assets acquired, certain income tax matters and net working capital.

The preliminary allocation of the purchase price for Noname Security and fair values the assets acquired and liabilities assumed were as follows (in thousands):

Total purchase consideration	$	452,319
Allocation of the purchase consideration:
Cash	$	18,253
Accounts receivable	6,189
Prepaid expenses and other current assets	2,849
Identifiable intangible assets	137,800
Deferred income tax assets	9,328
Total assets acquired	174,419
Accounts payable	(2,194)
Accrued expenses	(3,524)
Deferred revenue	(18,592)
Total liabilities assumed	(24,310)
Identifiable net assets acquired	150,109
Goodwill	302,210
Total purchase price allocation	$	452,319

The value of the goodwill can be attributed to a number of business factors, including a trained technical and sales workforce, and revenue and cost synergies expected to be realized. The Company expects that most of the goodwill related to the acquisition of Noname Security will be deductible for tax purposes as a result of post-acquisition transactions.

Identified intangible assets acquired and their respective estimated useful lives were as follows (in thousands, except years):

	Gross Carrying Amount		Estimated Useful Life (in years)
Completed technologies	$	132,300	10.5
Customer-related intangible assets	4,800		10.5
Trademarks	700		2.5
Total	$	137,800

The Company applied the multi-period excess earnings method to estimate the fair values of the completed technologies and customer-related acquired intangible assets, and the relief-from-royalty method to estimate the fair values of the trademarks. The total weighted average amortization period for the intangible assets acquired from Noname Security is 10.5 years. The intangible assets are amortized using a method that approximates their economic benefit over their estimated useful lives.