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Acquisition, Goodwill and Intangible Assets (Notes)
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Acquisition, Goodwill and Intangible Assets Acquisition, Goodwill and Intangible Assets
Business Combination
On December 2, 2019, we acquired Indegy Ltd. (“Indegy”) to expand our OT-specific capabilities. Through a share purchase agreement, we acquired 100% of Indegy's equity in exchange for cash consideration of $80.1 million, including cash acquired of $5.5 million. As part of the acquisition, all unvested options to acquire ordinary shares of Indegy vested immediately, and all options to acquire ordinary shares of Indegy were canceled in exchange for a right to receive a portion of the cash consideration. We paid $1.8 million for unvested options, which is included in post-acquisition stock-based compensation expense in our consolidated statements of operations.
The cash consideration was allocated as follows:
(in thousands)
 
Cash acquired
$
5,500

Other net tangible assets acquired
735

Deferred tax assets, net
4,243

Intangible assets
15,700

Goodwill
53,873

Total purchase price allocation
$
80,051


We are still finalizing the allocation of the purchase price, which may change as additional information becomes available related to any working capital adjustment and income taxes.
Acquired intangible assets and their estimated useful lives at the date of acquisition are as follows:
 
Intangible Assets
(dollars in thousands)
Cost
 
Weighted Average Useful Life
Acquired technology
$
15,500

 
7 years
Trade name
200

 
2 years
Acquired intangible assets
$
15,700

 
 

The results of operations of Indegy are included in our consolidated statements of operations from the acquisition date and were not material. Pro forma results of operations are not presented as they are not material to the consolidated statements of operations.
In 2019, we recognized $4.0 million of acquisition-related transaction costs in general and administrative expense, which included $2.1 million of expense related to the intercompany transfer of intellectual property.
Goodwill and Acquired Intangible Assets
The changes in the carrying amount of goodwill are as follows:
(in thousands)
 
Balance at December 31, 2018
$
265

Acquired goodwill
53,873

Balance at December 31, 2019
$
54,138


The excess purchase consideration over the fair value of acquired assets and liabilities is recorded as goodwill. The acquired goodwill reflects the synergies we expect from integrating Indegy's capabilities into our enterprise platform
offerings and from marketing and selling these new capabilities to our customers. None of the acquired goodwill is tax deductible.
Acquired intangible assets subject to amortization are as follows:
 
December 31, 2019
 
December 31, 2018
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Acquired technology
$
17,325

 
$
(2,009
)
 
$
15,316

 
$
1,824

 
$
(1,397
)
 
$
427

Trade name
200

 
(8
)
 
192

 

 

 

 
$
17,525

 
$
(2,017
)
 
$
15,508

 
$
1,824

 
$
(1,397
)
 
$
427


Amortization of acquired intangible assets was $0.6 million in each of 2019, 2018 and 2017, respectively.
At December 31, 2019, estimated future amortization of intangible assets is as follows:
(in thousands)
 
Year ending December 31,
 
2020
$
2,314

2021
2,306

2022
2,214

2023
2,214

2024
2,214

Thereafter
4,246

Total
$
15,508