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. 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 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 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 value 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 8, Goodwill and Note 21, 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 expenses 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 were not recognized in the Consolidated Statements of Operations of the Predecessor or Successor, and were success fees in nature. The nature of these fees related 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.

On May 27, 2021, the Company entered into a Purchase Agreement to acquire all the outstanding equity of BluJay TopCo Limited, a private limited liability company which owned BluJay Solutions, a cloud-based logistics execution platform company (BluJay). The agreement was between the Company and BluJay and its subsidiaries (BluJay Sellers). The acquisition of BluJay (BluJay Acquisition) was completed on September 1, 2021 (Acquisition Date) and was accounted for as a business combination under ASC 805.

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 the Company's 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.

The allocation of the purchase price was recorded to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the Acquisition Date and adjusted certain items as noted below. The final purchase price allocation was as follows:


($ in thousands)	Preliminary Purchase Price Allocation			Adjustments (4)			Final Purchase Price Allocation
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			(2,218	)		1,149,866
Non-current assets		2,200			(2,016	)		184
Accounts payable		(11,773	)		143			(11,630	)
Current liabilities (2)		(33,530	)		10,652			(22,878	)
Deferred revenue (3)		(39,283	)		—			(39,283	)
Deferred taxes		(101,936	)		(7,414	)		(109,350	)
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 was 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 was 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 related to the jurisdictional netting of income taxes, impact of a tax rate change on the deferred balance and the reinstatement of income tax receivables along with the true-up of accrued liabilities.

The fair value of the intangible assets was as follows:


($ 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 Company incurred $33.7 million of expenses directly related to the BluJay Acquisition during the year ended February 28, 2022 which were included in acquisition-related expenses 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, the Company 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, the Company 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, the Company 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 the Company's or BluJay's Consolidated Statements of Operations.

On March 2, 2022, E2open, LLC acquired all of the issued and outstanding membership interests of Logistyx Technologies, LLC, a private limited liability company which connects top retailers, manufacturers and logistics providers to more than 550 in-network carriers with strategic parcel shipping and omni-channel fulfillment technology (Logistyx). The purchase price was $185 million, with an estimated fair value of $183.4 million, including $90 million paid in cash at closing (Logistyx Acquisition). An additional $95 million, which was subject to standard working capital adjustments and other contractual provisions, was paid in two installments on May 31, 2022 and September 1, 2022. The Company had the option to finance the remaining payments, at its discretion, through cash or a combination of cash and Class A Common Stock. The May 31, 2022 payment of $37.4 million was paid in cash.

On September 1, 2022, E2open, LLC made a cash payment of $54.0 million to Logistyx as the final installment payment for the Logistyx Acquisition which reflected a working capital adjustment of $3.6 million. The Logistyx sellers disputed the working capital adjustment pursuant to the terms of the Membership Interest Purchase Agreement. During October 2022, the parties agreed to a working capital adjustment of $2.6 million. The additional payment for working capital was made to Logistyx on December 5, 2022.

The Logistyx Acquisition was accounted for as a business combination under ASC 805.

The allocation of the purchase price was recorded to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of March 2, 2022 and adjusted certain items as noted below. The final purchase price allocation was as follows:


($ in thousands)	Preliminary Purchase Price Allocation			Adjustments (3)			Final Purchase Price Allocation
Cash and cash equivalents	$	1,563		$	—		$	1,563
Account receivable, net		5,332			—			5,332
Other current assets		3,335			—			3,335
Property and equipment, net		144			—			144
Intangible assets		67,200			(400	)		66,800
Goodwill (1)		125,896			(2,150	)		123,746
Non-current assets		619			—			619
Accounts payable		(5,897	)		—			(5,897	)
Current liabilities		(3,931	)		—			(3,931	)
Deferred revenue (2)		(10,747	)		—			(10,747	)
Non-current liabilities		(158	)		—			(158	)
Total assets acquired and liabilities assumed	$	183,356		$	(2,550	)	$	180,806

(1)

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired in the Logistyx Acquisition. Goodwill associated with the Logistyx Acquisition was deductible for tax purposes at the U.S. entity level.

(2)

(3)

The adjustments primarily related to the $0.4 million change in fair values of the intangible assets due to a change in the deferred revenue and $2.6 million working capital adjustment.

The fair value of the intangible assets was as follows:


($ in thousands)	Useful Lives	Fair Value
Trade name	1	$	500
Developed technology (1)	6.4		33,500
Client relationships (2)	13		32,000
Backlog (3)	2.5		800
Total intangible assets		$	66,800

(1)

The developed technology represents technology developed by Logistyx 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 Logistyx and acquired by E2open that was estimated by applying the with-and-without methodology, a form of the income approach.

(3)

The backlog represents the present value of future cash flows from contracts with clients where service has not been performed and billing has not occurred.

The Company incurred $4.1 million ($0.7 million as of February 28, 2022) of expenses directly related to the Logistyx Acquisition through February 28, 2023 which are included in acquisition-related expense in the Condensed Consolidated Statements of Operations. Included in these expenses were $1.6 million acquisition-related advisory fees which were incurred on March 2, 2022. At the closing of the Logistyx Acquisition, E2open, LLC paid $0.5 million of acquisition-related advisory fees and other expenses related to the Logistyx Acquisition on behalf of Logistyx. These expenses were part of the purchase price consideration and not recognized as expense in E2open, LLC's or Logistyx's Condensed Consolidated Statements of Operations.

The following unaudited pro forma combined financial information presents the results of operations as if the BluJay and Logistyx acquisitions occurred 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 and Logistyx on its debt and the incurrence of interest expense related to the issuance of debt in connection with the BluJay and Logistyx acquisitions, transaction expenses, nonrecurring post-combination compensation expense and the related adjustment to the income tax provision.


	Fiscal Year Ended
($ in millions)	February 28, 2022
Total revenue	$	562.4
Net loss		(238.0	)
Less: Net loss attributable to noncontrolling interest		(25.6	)
Net loss attributable to E2open Parent Holdings, Inc.	$	(212.4	)

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 14, Notes Payable.

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 28, 2021 or prior to payment. The contingent consideration was paid in July 2021.

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.