Business Combinations |
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Business Combinations | 8. Business Combinations Singular Key, Inc. Acquisition On September 27, 2021, the Company acquired 100% of the voting equity interest in Singular Key, Inc. (“Singular Key”). Singular Key is a provider of no-code identity and security orchestration. Singular Key streamlines the integration of identity services, providing a no-code method of creating workflows across multiple identity platforms, including identity verification, fraud, risk, access management, privileged access and identity governance into a unified identity fabric. The purpose of this acquisition was to accelerate the Company’s entry into the identity orchestration arena. The total purchase price was $73.2 million, net of cash acquired, which consisted of the following:
The fair value of the 1,260,885 common shares issued as consideration was determined based on the lowest trading price of a Ping Identity common share on the New York Stock Exchange on the acquisition date of September 27, 2021. The following table summarizes the allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:
Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating Singular Key into the PingOne Cloud Platform. The integration of Singular Key capabilities is expected to enable customers to improve deployment speed, accelerate cloud migration, reduce costs and lower the risk associated with vendor lock-in. None of the goodwill is deductible for tax purposes. SecuredTouch, Inc. Acquisition On June 20, 2021, the Company acquired 100% of the voting equity interest in SecuredTouch, Inc. (“SecuredTouch”). SecuredTouch is a leader in fraud and bot detection and mitigation, which leverages behavioral biometrics, artificial intelligence, machine learning, and deep learning to provide identity, risk, and fraud teams early visibility into potential malicious activity happening across digital properties. The purpose of this acquisition was to accelerate the Company’s cloud-delivered intelligent-identity solutions that combat malicious behavior such as bots, emulators, and account takeover. The total purchase price was $39.7 million, net of cash acquired and a $0.2 million post-closing purchase price adjustment. The purchase price required to be paid by Ping Identity was reduced by $0.2 million as a result of changes to SecuredTouch’s originally estimated working capital balances. The following table summarizes the allocation of the purchase price, based on the estimated fair value of the assets acquired and liabilities assumed at the acquisition date:
Goodwill is primarily attributable to the workforce acquired and the expected synergies arising from integrating SecuredTouch into the Ping Intelligent Identity Platform to provide customers a more comprehensive offering that extends past traditional workforce use case and accelerates Ping’s cloud-delivered intelligent identity solutions that combat malicious behavior. None of the goodwill is deductible for tax purposes. Additional Acquisition Related Information The operating results of Singular Key and SecuredTouch are included in the Company’s condensed consolidated statements of operations from their respective dates of acquisition and are not material to the condensed consolidated statements of operations for the three and six months ended June 30, 2021. Pro Forma Financial Information (unaudited) If SecuredTouch and Singular Key had been acquired on January 1, 2020 and included in our results for the three and six months ended June 30, 2021, there would not have been material impact to revenue, and Ping Identity’s net loss would have increased, on a pro forma basis, by $1.8 million and $4.4 million, respectively, inclusive of intangible amortization which would have been $1.9 million and $3.7 million, respectively. |