Business Combination (Notes)

12 Months Ended

Dec. 31, 2019

Business Combinations

The following table summarizes the purchase price allocation of the business acquisitions during the fiscal years 2019, 2018 and 2017 based on estimated fair values of the acquired assets as of the acquisition date (in thousands);



Acquiree	Acquisition Date	Purchase Consideration		Net Tangible Assets Acquired/ (liabilities assumed)		Purchased Intangible Assets		Goodwill		Deferred Tax Liability
Adya	January 10,2019	$	1,000	$	—	$	900	$	100	$	—
Layered Insight	October 16, 2018	$	13,434	$	80	$	9,600	$	5,498	$	1,500
1Mobility	April 1, 2018	$	4,000	$	—	$	3,700	$	300	$	—
NetWatcher	November 28, 2017	$	7,729	$	80	$	7,000	$	649	$	—
Nevis	August 29, 2017	$	5,753	$	14	$	5,156	$	583	$	—

On January 10, 2019, the Company acquired the assets of Adya, an India-based company. The acquisition included a cloud application management platform, which enables security and compliance audits of SaaS applications. Total purchase consideration included $0.2 million of deferred consideration due 18 months from the closing date of the acquisition, subject to potential adjustment from possible indemnity claims. The acquired intangible assets relating to Adya's developed technology are being amortized over the estimated useful lives of approximately four years. Goodwill arising from the Adya acquisition is deductible for tax purposes over 15 years.

On October 16, 2018, the Company completed the acquisition of Layered Insight, a pioneer and global leader in container native application protection, providing accurate insight into container images, adaptive analysis of running containers, and automated enforcement of the container environment. Of the total consideration, $1.6 million was paid during the fiscal year ended December 31, 2019 based on the terms and conditions of the purchase agreement. All consideration was paid in cash. The Company also paid additional $4.0 million as the acquired business had achieved certain integration milestones for the annual period ending December 31, 2019. In addition, the Company initially recorded $1.5 million of the contingent consideration related to revenue milestone payments in accrued liabilities of the consolidated balance sheet as of December 31, 2018. The entire amount was reversed during the fiscal year 2019 as the revenue milestone was not met. The acquired intangible asset relating to Layered Insight's developed technology is amortized over the estimated useful life of approximately four years. Goodwill arising from the Layered Insight acquisition is not deductible for tax purposes.

On April 1, 2018, the Company acquired the assets of 1Mobility, a Singapore-based company. The acquisition allowed the Company to provide enterprises of all sizes with the ability to create and continuously update an inventory of mobile devices on all versions of Android, iOS and Windows Mobile in their environment; and to continuously assess their security and

compliance posture, while quarantining devices that were compromised or out-of-compliance. Of the total purchase consideration, $0.6 million was paid during the fiscal year ended December 31, 2019 based on the terms and conditions of the purchase agreement. The acquired intangible assets relating to 1Mobility's developed technology is being amortized over the estimated useful lives of approximately four years. Goodwill arising from the 1Mobility acquisition is deductible for tax purposes over 15 years.

In 2017, the Company purchased certain assets of Nevis Networks (India) Private Limited (Nevis) and Defensative, LLC (NetWatcher). The Nevis acquisition accelerated the Company's development of network security solutions for detection and awareness of external intrusions to computer networks. The NetWatcher acquisition expanded the Company's threat protection and management capabilities and added new offerings to managed security service providers. Of the total consideration, $1.0 million was paid during the fiscal year ended December 31, 2019 based on the terms and conditions of the purchase agreement. Purchased intangible assets represented the fair value of purchased technology from the Company's acquisitions of Nevis and NetWatcher. Goodwill generated from these acquisitions was primarily related to the acquired workforce, expected improvements in technology performance and additional product functionality. The intangible assets have a useful life of 5 years. Goodwill is deductible for tax purposes over 15 years.

Pro forma financial information for these acquisitions in the fiscal years 2019, 2018 and 2017 was not presented because the acquisitions were not material to the Company's consolidated financial statements, either individually or in aggregate.