Company: ROK
Filing Date: 2025-11-12
Form Type: 10-K
Source: 0001024478-25-000116
Chunk: 207

Company: ROCKWELL AUTOMATION, INC
Filing Date: 2025-11-12
Form: 10-K
Item: Item 6
Chunk 207
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 average royalty rate of 2.05 percent; other assumptions included forecasted revenue growth rates and the discount rate.The purchase price included up to $50 million in contingent consideration that can be earned by sellers if Clearpath achieves revenue targets that it had established prior to the acquisition in two performance periods ending February 29, 2024, and February 28, 2025. We developed various risk-based scenarios and a probability outcome model to measure the fair value of the contingent consideration. We determined the fair value to be $43 million as of the acquisition date, which is considered a level 3 measurement under the U.S. GAAP fair value hierarchy. We updated the fair value measures quarterly during the performance periods to reflect actual contingent consideration earned.

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Table of ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents the fair value of the contingent consideration in the Consolidated Balance Sheet (in millions):Period ended February 29, 2024Period ended February 28, 2025TotalContingent consideration as of December 31, 2023$17 $26 $43 Adjustment for earnout achieved for first performance period(7)— (7)Adjustment to fair value— (21)(21)Payment of earnout achieved for first performance period(10)— (10)Contingent consideration as of September 30, 2024$— $5 $5 Adjustment for earnout forfeited for second performance period— (5)(5)Contingent consideration as of September 30, 2025$— $— $— No consideration was earned or paid for the second performance period. The consideration for the amount earned for the first performance period was paid during the third quarter of 2024.In November 2023, we acquired Verve Industrial Protection (Verve), a cybersecurity software and services company that focuses specifically on industrial environments. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of November 1, 2023. The aggregate purchase price allocation is as follows (in millions):Purchase Price AllocationReceivables$8 Goodwill 133 Intangible assets47 All other assets1 Total assets acquired189 Less: Liabilities assumed(6)Net assets acquired$183 Purchase ConsiderationTotal purchase consideration, net of cash acquired$183 We assigned the full amount of goodwill