Business Combinations

9 Months Ended

Sep. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Business Combinations

Business Combinations

On July 1, 2021, we acquired Softbank's 50% interest in Bloom Energy Japan, for an aggregate purchase price of $2.0 million, as set forth in the Share Purchase Agreement between the parties (the "Purchase Agreement"). After purchasing the remaining 50% interest in Bloom Energy Japan from Softbank, we own 100% of Bloom Energy Japan. The transaction was accounted for as a step acquisition, which required the re-measurement of our previously held 50% ownership interest in the joint venture to fair value and the acquired net assets became part of our operations upon closing.

In accordance with ASC 805, we allocated the purchase price of our acquisitions to the tangible assets, liabilities and intangible assets acquired based on fair values and we recorded the excess purchase price over those fair values as goodwill. The fair value of assets acquired and liabilities assumed as part of this transaction are not material. The fair value of net tangible assets acquired approximated their carrying value. The Purchase Agreement included an earn-out related to a potential sale of Energy Servers to an identified customer (up to 10.5 megawatts of aggregate baseload) for an additional payment of up to approximately $3.6 million, which can be earned on or before the two year anniversary of the BEJ Closing Date. We believe that the fair value of this contingent consideration falls within Level 3 of the fair value hierarchy as a result of the unobservable inputs used for the measurement of this future event and have recorded the value in other long-term liabilities. Acquisition-related costs were expensed as incurred and were not material.

Goodwill resulting from the transaction constitutes the excess of the consideration paid over the fair values of the assets acquired and liabilities assumed and primarily represents the expected benefits of streamlining our marketing and sales activities in Japan. We recognized acquired goodwill of $1.7 million which is is recorded in long-term assets as of September 30, 2021. This acquired goodwill is not deductible for tax purposes. In connection with the acquisition and as a result of the re-measurement, we recognized $2.0 million fair value investment on the previously written-off equity investment in our original 50% interest in Bloom Energy Japan as of July 1, 2021 as a gain in other income (expense), net on our condensed consolidated statement of operations.