Business Combinations

6 Months Ended

Apr. 30, 2020

Business Combinations [Abstract]

Business Combinations

Business Combinations

During the second quarter of fiscal 2020, the Company completed an acquisition for an aggregate consideration of $105.7 million; including cash consideration of $75.7 million and $30.0 million equal to the fair value of the Company’s products exchanged in connection with the acquisition.

The consideration of $105.7 million was preliminary allocated to $20.6 million of identifiable intangible assets, $4.2 million of net tangible assets, and $80.9 million in goodwill. The fair value of these intangible assets was estimated using the income method. These transactions are not considered to be material to the Company’s unaudited condensed consolidated statements of operations. The acquisition was attributable to the Semiconductor & System Design reporting segment.

Concurrent to this transaction, the Company executed a design service arrangement and recognized an asset of $10.7 million for the off-market component. The $10.7 million contract asset is expected to be amortized over the contractual period of the agreement of five years.

Other Fiscal 2020 Acquisitions

As of April 30, 2020, the Company completed several other acquisitions for an aggregate cash consideration of $79.8 million, net of cash acquired. The Company does not consider these acquisitions to be material, individually or in the aggregate, to the Company's unaudited condensed consolidated statements of operations. The preliminary purchase allocations are $25.2 million of identifiable intangible assets and $55.9 million in goodwill of which $12.9 million is attributable to the Software Integrity reporting segment. The fair value of these intangible assets and goodwill are estimated using the income method.

The preliminary fair value estimates for the assets acquired and liabilities assumed for all acquisitions completed within 12 months from the applicable acquisition date are not yet finalized and may change as additional information becomes available during the respective measurement periods. The primary areas of those preliminary estimates relate to certain tangible assets and liabilities, identifiable intangible assets, and income taxes.