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Acquisitions
9 Months Ended
Nov. 30, 2023
Business Combinations [Abstract]  
Acquisitions

3. Acquisitions

Logistyx Acquisition

On March 2, 2022, E2open, LLC, our subsidiary, acquired all of the issued and outstanding membership interests of Logistyx for a purchase price of $185 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 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. An additional payment of $1.1 million for working capital was made to Logistyx on December 5, 2022.

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

The following summarizes the consideration paid for the Logistyx Acquisition.

 

($ in thousands)

 

Fair Value

 

Cash consideration to Logistyx at fair value

 

$

153,090

 

Cash repayment of debt

 

 

29,777

 

Cash paid for seller transaction costs

 

 

489

 

Working capital adjustment

 

 

(2,550

)

Estimated consideration paid for the Logistyx Acquisition

 

$

180,806

 

 

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. The final purchase price allocation was as follows:

 

($ in thousands)

 

Final Purchase Price Allocation

 

Cash and cash equivalents

 

$

1,563

 

Account receivable, net

 

 

5,332

 

Other current assets

 

 

3,335

 

Property and equipment, net

 

 

144

 

Intangible assets

 

 

66,800

 

Goodwill (1)

 

 

123,746

 

Non-current assets

 

 

619

 

Accounts payable

 

 

(5,897

)

Current liabilities

 

 

(3,931

)

Deferred revenue (2)

 

 

(10,747

)

Non-current liabilities

 

 

(158

)

Total assets acquired and liabilities assumed

 

$

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)
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.

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.

We incurred $4.1 million of expenses directly related to the Logistyx Acquisition through February 28, 2023 which are included in acquisition-related expenses 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, we paid $0.5 million in acquisition-related advisory fees and other expenses related to the Logistyx Acquisition on behalf of Logistyx, which were accounted for as part of the purchase price consideration.