Business Combinations

3 Months Ended

Apr. 30, 2025

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

2025 Acquisitions

Imprivata

On December 13, 2024, the Company acquired the Identity Governance and Administration business of Imprivata, a digital identity company for life- and mission-critical industries that is majority owned by Thoma Bravo, for a cash payment at closing of $10.7 million and up to an additional cash amount of $7.4 million related to contingent consideration subject to the achievement of certain customer contract assignments or migrations. The contingent consideration is recorded in the condensed consolidated balance sheets in accrued expenses and other liabilities at a fair value of $5.7 million. The remaining contingent consideration is payable eight months after the closing date. See Note 4 for additional information on the fair value of the contingent consideration.

The following table summarizes the preliminary purchase price allocation as of the date of acquisition (in thousands):




Accounts receivable	$	1,572
Goodwill	9,247
Intangible assets	9,800
Deferred revenue	(4,236)
Total fair value of assets acquired and liabilities assumed	$	16,383

The preliminary fair value estimates and assumptions regarding certain tangible assets acquired and liabilities assumed and the valuation of intangible assets acquired are subject to change as additional information is obtained during the measurement period. The goodwill arising from the acquisition is deductible for tax purposes.

The fair value of the developed technology was estimated using a market approach. The fair value of customer relationships was estimated using the excess earnings method. The following table presents the fair values and useful lives of the identifiable intangible assets acquired:


	Amount		Estimated Useful Life
	(In thousands)		(In years)
Developed technology	$	1,600	3
Customer relationships	8,200		4
Total identifiable intangible assets	$	9,800

Double Zero

On April 9, 2024 (“Acquisition Date”), the Company acquired all of the outstanding stock of Double Zero Security, Inc. (“Double Zero”), a third-party provider of digital-identity threat detection and response for secure enterprise access. The aggregate consideration transferred in connection with this acquisition was $5.4 million, net of cash acquired, and $0.8 million was related to certain indemnities ("Holdback Consideration"). The Company paid $0.1 million of the Holdback Consideration 60 days after the Acquisition Date and the remaining Holdback Consideration of $0.7 million was paid in April 2025.

The following table summarizes the purchase price allocation as of the date of acquisition (in thousands):




Cash and cash equivalents	$	9
Accounts receivable	25
Prepayments and other current assets	18
Deferred tax assets, non-current	860
Goodwill	3,566
Intangible assets	1,360
Accounts payable	(41)
Accrued expenses and other liabilities	(108)
Deferred revenue	(311)
Total fair value of assets acquired and liabilities assumed	$	5,378

The fair value of the developed technology was estimated using a market approach. The following table presents the estimated fair values and useful lives of the identifiable intangible assets acquired:


	Amount		Estimated Useful Life
	(In thousands)		(In years)
Developed technology	$	1,360	6

Additional Acquisition Related Information

The operating results of the acquired companies are included in the Company’s condensed consolidated statements of operations from the respective dates of acquisition. Pro forma results of operations have not been presented because the effects of these acquisitions, individually and in the aggregate, were not material to the Company’s condensed consolidated statements of operations.

The Company believes that for each acquisition, the acquired companies will provide opportunities for growth through investing in additional products and capabilities, among other factors. This contributed to a purchase price in excess of the estimated fair value of each acquired company’s net identifiable assets acquired and, as a result, goodwill was recorded in connection with each acquisition. Unless otherwise noted above, goodwill arising from these acquisitions is not deductible for tax purposes.

SailPoint, Inc. 10-Q