The Business Combination of the Company and E2open Holdings was completed on February 4, 2021. The Business Combination was accounted for as a business combination under ASC 805, Business Combinations. The acquisition of E2open Holdings constitutes the acquisition of a business for purposes of ASC 805, and due to the change in control, has been accounted for using the acquisition method with the Company as the accounting acquirer and E2open Holdings as the accounting acquiree. E2open Parent Holdings, Inc. has been determined to be the accounting acquirer based on evaluation of the following factors:

These factors support the conclusion that E2open Parent Holdings, Inc. acquired a controlling interest in E2open Holdings and is the accounting acquirer. E2open Parent Holdings, Inc. is the primary beneficiary of E2open Holdings, which is a variable interest entity, since it has the power to direct the activities of E2open Holdings that most significantly impact E2open Holdings economic performance through its role as the managing member. E2open Parent Holdings, Inc.’s variable interest in E2open Holdings includes ownership of E2open Holdings, which results in the right and obligation to receive benefits and absorb losses of E2open Holdings that could potentially be significant to E2open Parent Holdings, Inc. Therefore, the Business Combination represented a change in control and is accounted for using the acquisition method. Under the acquisition method of accounting, the purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed from E2open Holdings based on their estimated acquisition-date fair values.

The cash consideration in the Business Combination included cash from (1) the Trust Account in the amount of $414.0 million which was received in CCNB1’s IPO, (2) $525.0 million in proceeds from the issuance of a new term loan, (3) $695.0 million in proceeds from the investors purchasing an aggregate of 69.5 million Class A Common Stock in connection with the Business Combination (PIPE Investment) and (4) $200.0 million in proceeds from the Forward Purchase Agreement. E2open Holdings received $627.5 million of the PIPE Investment funds prior to the closing of the Business Combination.

The following summarizes the estimated fair value of the Business Combination:


($ in thousands)	Fair Value
Equity consideration paid to existing E2open Holdings ownership, net (1)	$	461,549
Cash consideration to E2open Holdings, net of $15.1 million post business combination expense		585,971
Cash repayment of debt		978,521
Contingent consideration		158,598
Tax receivable agreement payable (2)		49,892
Cash paid for seller transaction costs		38,135
Estimated fair value of the Business Combination	$	2,272,666

(1)

Equity consideration paid to E2open Holdings equity holders consisted of the following:


(In thousands, except per share data)	Consideration
Common shares subject to sales restriction		43,300
Fair value per share	$	10.98
Equity consideration paid to existing E2open Holdings ownership	$	475,434
Less: Acceleration of Class A and Class B units post business combination expense		(13,885	)
Equity consideration paid to existing E2open Holdings ownership, net	$	461,549

(2)

Payable for 85% of the tax savings realized during the exchange of Common Units for shares of common stock, cash or other tax benefits under the Tax Receivable Agreement, as defined below. See Note 12, Tax Receivable Agreement for additional information.

The Company recorded the preliminary allocation of the purchase price to the Predecessor’s tangible and intangible assets acquired and liabilities assumed based on their fair values as of February 4, 2021. The preliminary purchase price allocation is as follows:


($ in thousands)	Fair Value
Cash and cash equivalents	$	180,115
Account receivable, net		124,168
Other current assets		23,623
Property and equipment, net		37,924
Intangible assets		830,000
Goodwill (1)		2,628,964
Non-current assets		4,930
Current liabilities (2)		(159,463	)
Notes payable and capital lease obligations		(511,762	)
Warrant liability		(91,959	)
Noncurrent liabilities (2)		(402,986	)
Noncontrolling interest (3)		(390,888	)
Total assets acquired and liabilities assumed	$	2,272,666

(1)

Goodwill that arises from a step-up in tax basis from a business combination is generally deductible by the Company; however, this transaction did not create any tax deductible goodwill in any jurisdiction.

(2)

The deferred revenue reflects a $60.7 million reduction in deferred revenues related to the estimated fair values of the acquired deferred revenue. The adjustment is based on the fair value estimates for deferred revenue, adjusted for costs to fulfill the liabilities assumed, plus a normal profit margin.

(3)

Noncontrolling interest represents the 16.0% ownership in E2open Holdings not owned by the Company as of the Closing Date. The fair value of the noncontrolling interest follows:


(In thousands, except per share data)	Fair Value
Common shares subject to sale restriction		35,600
Fair value per share	$	10.98
Noncontrolling interest	$	390,888

The fair value of the intangible assets is as follows:


($ in thousands)	Weighted Average Useful Lives	Fair Value
Indefinite-lived
Trademark / trade name (1)	Indefinite	$	110,000
Definite-lived
Client relationships (2)	20		300,000
Technology (3)	8.5		370,000
Content library (4)	10		50,000
Total definite-lived			720,000
Total intangible assets		$	830,000

(1)

The trademark and trade name represent the tradenames that E2open Holdings originated or acquired which were valued using the relief-from-royalty method.

(2)

The client relationships represent the existing client relationships of E2open Holdings that was estimated by applying the with-and-without methodology, a form of the income approach.

(3)

The developed technology represents technology acquired and developed by E2open Holdings for the purpose of generating income for E2open Holdings, which was valued using the multi-period excess earnings method, a form of the income approach considering technology migration.

(4)

The content library represents the content contributed by network participants to the E2open Holdings business network, which was valued using the replacement cost method.

The allocation of the purchase price was based on valuations performed to determine the fair value of the net assets as of the Closing Date. Refinements have been made to the purchase price throughout the year with specific adjustments to stockholders' equity and goodwill. See Note 7, Goodwill and Note 19, Stockholders' Equity for additional information.

E2open Holdings incurred $6.5 million of expenses directly related to the Business Combination from March 1, 2020 through February 3, 2021 which were included in acquisition-related expense in the Consolidated Statements of Operations. From January 14, 2020 (inception) through the date of its last filing for the year ending December 31, 2020, CCNB1 incurred $3.9 million of transaction related expenses. From January 1, 2021 through February 3, 2021, CCNB1 incurred $0.8 million of expenses related to the Business Combination. E2open Holdings paid $0.6 million of debt issuance costs on the Closing Date which were capitalized and recorded as a reduction to the outstanding debt balances. On the Closing Date, the Company paid $14.5 million of deferred underwriting costs related to CCNB1’s initial public offering. At the closing of the Business Combination, $10.9 million fees related to the PIPE Investment and $20.2 million of debt issuance costs, including the $0.6 million paid by E2open Holdings, were paid by the Company. Additionally, $31.0 million and $16.9 million of acquisition-related advisory fees related to the reverse merger were paid by E2open Holdings and CCNB1, respectively, at the closing of the Business Combination and as these advisory fees were contingent upon the consummation of the Business Combination, they are not recognized in the Consolidated Statements of Operations of the Predecessor or Successor, and are success fees in nature. The nature of these fees relate to advisory and investment banker fees that were incurred dependent on the success of the Business Combination. The deferred underwriting commissions and costs pertaining to the reverse merger were treated as a reduction of equity while merger-related costs were expensed in the period from February 4, 2021 through February 28, 2021. The debt issuance costs were capitalized as a reduction to the outstanding debt balances.

The Investor Rights Agreement parties agreed that until the date that is the later of (a) one year after the Closing Date and (b) the date of the Company’s 2022 annual meeting of stockholders (Standstill Period), they will not (1) solicit proxies to vote or seek to advise or influence any person with respect to the voting of any of our securities in favor of electing any person as a director who is not nominated pursuant to the Investor Rights Agreement or by the board of directors or the Nominating and Corporate Governance Committee or in opposition of any individual nominated by us pursuant to the Investor Rights Agreement, (2) nominate any person as a director who is not nominated pursuant to the Investor Rights Agreement or by our board of directors (or the Nominating and Corporate Governance Committee) (other than by making a non-public proposal or request to our board of directors or the Nominating and Corporate Governance Committee in a manner which would not require our board of directors or us to make any public disclosure), (3) take certain actions contrary to the Company’s governance structure other than in accordance with the Investor Rights Agreement, (4) subject to certain exceptions, enter into a voting trust, voting agreement or similar voting arrangement with respect to any of the Company’s equity securities, (5) form, join or participate in a “group,” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (Exchange Act), in connection with any of the foregoing actions or (6) make any public disclosure inconsistent with the foregoing.

The director appointment rights under the Investor Rights Agreement will terminate as to a party when such party, together with its permitted transferees, has less than certain ownership thresholds (with respect to the affiliates of Insight Partners, the greater of 33% of the economic interests in us that such affiliates of Insight Partners owned immediately after the Closing Date and 2% of the Company’s voting securities, and with respect to CC Capital (on behalf of the Sponsor), less than 17% of the economic interests in the Company that it owned immediately after the Closing Date). The registration rights in the Investor Rights Agreement will terminate as to each holder of the Company’s shares of common stock when such holder ceases to hold any of the Company’s common stock or securities exercisable or exchangeable for the Company’s common stock.

On May 27, 2021, we entered into a Purchase Agreement with the BluJay Sellers to acquire all the outstanding equity of BluJay. On September 1, 2021 (Acquisition Date), we completed the acquisition of BluJay (BluJay Acquisition). The BluJay Acquisition was accounted for as a business combination under ASC 805, Business Combinations.

The cash consideration in the BluJay Acquisition was provided by $380.0 million in proceeds from the issuance of an incremental term loan, $300.0 million in PIPE financing from institutional investors for the purchase of an aggregate of 28,909,022 shares of our Class A Common Stock and cash on hand.

The following summarizes the consideration paid for the BluJay Acquisition.


($ in thousands)	Fair Value
Equity consideration paid to BluJay (1)	$	730,854
Cash consideration to BluJay		350,658
Preference share consideration paid to BluJay (2)		86,190
Cash repayment of debt		334,483
Cash paid for seller transaction costs		26,686
Estimated consideration paid for the BluJay Acquisition	$	1,528,871

(1)

Equity consideration paid to BluJay equity holders consisted of the following:


(In thousands, except per share data)	Consideration
Common shares subject to sales restriction		72,383
Fair value per share	$	10.097
Equity consideration paid to BluJay	$	730,854

(2)

Represents the liability and dividends owed related to the BluJay preference shares at the of the acquisition.

We recorded the preliminary allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the Acquisition Date. The preliminary purchase price allocation is as follows:


($ in thousands)	November 30, 2021			Adjustments (4)			February 28, 2022
Cash and cash equivalents	$	23,773		$	—		$	23,773
Account receivable, net		33,834			(12	)		33,822
Other current assets		10,352			865			11,217
Property and equipment, net		6,503			—			6,503
Operating lease right-of-use assets		9,018			—			9,018
Intangible assets		484,800			—			484,800
Goodwill (1)		1,152,084			3,237			1,155,321
Non-current assets		2,200			(2,016	)		184
Accounts payable		(11,773	)		143			(11,630	)
Current liabilities (2)		(33,530	)		3,277			(30,253	)
Deferred revenue (3)		(39,283	)		—			(39,283	)
Deferred taxes		(101,936	)		(5,494	)		(107,430	)
Non-current liabilities		(7,171	)		—			(7,171	)
Total assets acquired and liabilities assumed	$	1,528,871		$	—		$	1,528,871

(1)

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired in the BluJay Acquisition. Goodwill associated with the BluJay Acquisition is not deductible for tax purposes.

(2)

Current liabilities includes a $2.7 million deferred acquisition liability that was acquired related to a prior acquisition by BluJay. The deferred acquisition liability is a fixed amount that was determined at the closing of the acquisition and
payable after a certain period of time. The deferred acquisition liability was paid in December 2021.

(3)

The deferred revenue was recorded under ASC 606 in accordance with ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers; therefore, a reduction in deferred revenues related to the estimated fair values of the acquired deferred revenues was not required.

(4)

The adjustments primarily relate to the jurisdictional netting of income taxes, impact of a tax rate change on the deferred balance and the reinstatement of income tax receivables.


($ in thousands)	Useful Lives	Fair Value
Trade name	1	$	3,800
Developed technology (1)	5.9		301,000
Client relationships (2)	3		180,000
Total intangible assets		$	484,800

(1)

The developed technology represents technology developed by BluJay and acquired by E2open, which was valued using the multi-period excess earnings method, a form of the income approach considering technology migration.

(2)

The client relationships represent the existing client relationships of BluJay and acquired by E2open that was estimated by applying the with-and-without methodology, a form of the income approach.

The preliminary allocation of the purchase price is based on preliminary valuations performed to determine the fair value of the net assets as of September 1, 2021. This allocation is subject to revision as the assessment is based on preliminary information subject to refinement.

We incurred $33.7 million of expenses directly related to the BluJay Acquisition during the year ended February 28, 2022 which are included in acquisition-related expense in the Consolidated Statements of Operations. Included in these expenses were $13.4 million acquisition-related advisory fees which were incurred on the Acquisition Date. In addition, we paid $10.4 million of debt issuance costs associated with the $380.0 million incremental term loan on the Acquisition Date which were capitalized and recorded as a reduction of the outstanding debt balances. At the closing of the BluJay Acquisition, we paid $7.1 million in fees related to the $300.0 million PIPE financing which were recorded as a reduction to the proceeds from the issuance of Class A Common Stock in the Consolidated Statements of Stockholders' Equity. Additionally, we paid $26.7 million of acquisition-related advisory fees and other expenses related to the BluJay Acquisition on behalf of BluJay. These expenses were part of the purchase price consideration and not recognized as expense in our or BluJay's Consolidated Statements of Operations.

The following unaudited pro forma combined financial information presents the results of operations as if the BluJay Acquisition happened as of March 1, 2021. The unaudited pro forma results may not necessarily reflect actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma results reflect the step-up amortization adjustments for the fair value of intangible assets acquired, the elimination of historical interest expense incurred by BluJay on its debt and the incurrence of interest expense related to the issuance of debt in connection with the BluJay Acquisition, transaction expenses, nonrecurring post combination compensation expense and the related adjustment to the income tax provision.


	Fiscal Year Ended
($ in millions)	February 28, 2022			February 28, 2021
Total revenue	$	505.3		$	507.5
Net loss		(193.5	)		(142.8	)
Less: Net loss attributable to noncontrolling interest		(24.6	)		(18.1	)
Net loss attributable to E2open Parent Holdings, Inc.	$	(168.9	)	$	(124.7	)

Additionally, the Investor Rights Agreement was amended and restated to add certain of BluJay's existing stockholders as parties, including certain affiliates of Francisco Partners and Temasek as well as include a six month lock-up period from September 1, 2021 through February 28, 2022 for certain equity holders of E2open and BluJay. The Investor Rights Agreement also provides Francisco Partners and Temasek the right to nominate one member each to our board of directors. Mr. Deep Shah and Mr. Martin Fichtner became new directors on September 1, 2021.

In July 2019, E2open Holdings acquired Amber Road, Inc. (Amber Road), a leading provider of cloud-based global trade management software, trade content and training. E2open Holdings acquired Amber Road for approximately $428.6 million in fixed consideration. The acquisition was funded by proceeds from the Term Loan Due 2024 and the Amber Term Loan of $35.6 million. See Note 13, Notes Payable.

The aggregate amount of consideration paid by E2open Holdings was allocated to Amber Road’s net tangible assets and intangible assets based on their estimated fair values. The excess of the purchase price over the value of the net tangible assets and intangible assets was recorded as goodwill.

The table below presents the allocation of the purchase price to the net assets acquired based on their estimated fair values, as well as the associated estimated useful lives of the acquired intangible assets.


($ in thousands)	Amounts		Useful Lives
Net assets:
Content library	$	57,000	10 years
Client relationships		103,100	12 years
Technology		41,000	7 years
Total identified intangible assets		201,100
Cash and cash equivalents		6,524
Accounts receivable		19,191
Prepaid expenses and other current assets		2,145
Fixed assets		3,160
Other non-current assets		1,261
Total tangible assets		32,281
Goodwill		263,317
Total assets		496,698
Accounts payable		2,100
Accrued expenses and other liabilities		6,901
Deferred revenue		29,872
Other long-term liabilities		29,181
Total liabilities assumed		68,054
Net assets acquired	$	428,644

The goodwill recognized in connection with the acquisition of Amber Road will not be deductible for tax purposes. The weighted-average amortization period for the acquired intangible assets was 10.4 years.

The operating results of Amber Road have been included in the Company’s consolidated financial statements as of the closing date of the acquisition.

In May 2019, E2open Holdings acquired Averetek, a channel marketing engine enabling clients and their channel partners to plan and execute marketing campaign tactics. Averetek was acquired for $8.7 million in fixed consideration with $2.0 million in consideration contingent upon successful attainment of earn-out criteria that extend two years subsequent to closing. The fair value of the contingent consideration was $2.0 million at closing, February 29, 2020 and February 28, 2021. The contingent consideration was paid in July 2021.

The fixed consideration was comprised of a cash payment of $7.6 million and a deferred payment of $1.1 million which was paid in May 2020. The deferred payment was not contingent on performance criteria and was included in acquisition-related obligations in the Consolidated Balance Sheets.

The aggregate amount of consideration paid by E2open Holdings was allocated to Averetek’s net liabilities assumed of $0.6 million and intangible assets of $4.1 million based on their estimated fair values. The excess of the purchase price over the value of the net tangible assets and intangible assets of $7.2 million was recorded to goodwill. The goodwill recognized in connection with the acquisition of Averetek will be deductible for tax purposes. The weighted-average amortization period for the acquired intangible assets was 8.3 years.

The operating results of Averetek have been included in the Company’s consolidated financial statements from the closing date of the acquisition.

The Company does not disclose the actual results of acquired companies post acquisition. E2open integrates the operations of acquired companies, therefore making it impractical to report separate results.