Business Combination

6 Months Ended

Jun. 30, 2019

On April 1, 2019, we acquired NetFort Technologies Limited (NetFort), a provider of end-to-end network traffic visibility and analytics across cloud, virtual and physical platforms for a purchase price of $16.1 million. The $16.1 million purchase price was funded with cash. In the three and six months ended June 30, 2019, we recorded $0.3 million and $0.5 million, respectively, of acquisition related costs in general and administrative expense.

The following table summarizes the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands):



Purchase price	$	16,130

Recognized amount of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	1,523
Other net working capital	325
Deferred revenue	(487		)
Deferred tax liability	(761		)
Intangible asset	6,084
Total identifiable net assets assumed	6,684
Goodwill	9,446
Total purchase price allocation	$	16,130

The fair value of identifiable intangible assets was based on valuations using the income approach. The estimated fair value and useful life of identifiable intangible assets are as follows:



	Amount		Weighted Average Amortization Life (years)
	(in thousands)
Developed technology	$	6,084	5

The excess of the purchase price over the tangible assets acquired, identifiable intangible asset acquired and assumed liabilities was recorded as goodwill. We believe that the amount of goodwill reflects the expected synergistic benefits of being able to leverage the integration of the technology acquired with our existing product offerings and to be able to successfully market and sell these new products and features to our customer base. The goodwill was allocated to our one reporting unit. The acquired goodwill and intangible asset will not be deductible for tax purposes. Accordingly, a $0.8 million deferred tax benefit was recorded resulting from a partial release of our valuation allowance to account for the creation of a deferred tax liability for the developed technology intangible asset acquired.

These preliminary amounts are subject to subsequent adjustment as we obtain additional information to finalize certain components of working capital.

Following the acquisition, certain retained employees and non-employee contractors of NetFort received an aggregate of 123,623 restricted stock units (RSUs), which will vest over a maximum of three years. The vesting of the RSUs are subject to the employee's continued service with us. Accordingly, compensation expense associated with the RSUs will be expensed as incurred in our post-acquisition financial statements.

Proforma results of operations have not been included, as the acquisition of NetFort was not material to our results of operations for any periods presented.