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ACQUISITIONS AND DIVESTURES
12 Months Ended
Dec. 31, 2023
Business Combinations [Abstract]  
ACQUISITIONS AND DIVESTURES ACQUISITIONS AND DIVESTITURES
Orinter Acquisition

On January 31, 2023 (the “Orinter Closing Date”), the Company acquired all of the outstanding equity interests in Orinter Tour & Travel, S.A. (“Orinter”) from OTT Holding Ltd (the “Orinter Sellers”) (such transaction referred to as the “Orinter Acquisition”). Orinter is a high-growth and leading travel provider that currently serves a multitude of travel companies, with a strong presence in Brazil and Latin America. Through this acquisition, the Company has expanded its geographic footprint to include Brazil’s domestic and outbound travel market. Additionally, Orinter’s direct relationships with Latin American hotels will provide valuable cross-sell opportunities for the Company.
The acquisition date fair value of consideration transferred for Orinter is as follows (in thousands):
Cash consideration (i)
$21,085 
Issuance of Class A Common Stock (ii)
16,037 
Fair value of earn-out consideration (iii)
3,060 
Total purchase price consideration$40,182 
(i) Cash consideration of $20.0 million paid and $1.5 million holdback consideration transferred to an escrow account as a guarantee in case of necessity of reimbursement, payment and/or use by Orinter for fulfillment of obligations of Orinter deriving from customers credits and customers prepayment. The Company intends to claw back the net working capital adjustment of $0.5 million against the holdback consideration, and recorded this clawback amount in prepaid expenses and other current assets on the consolidated balance sheet.

(ii) Issuance of 1,726,405 shares of common stock to be maintained in an escrow account. The release of the shares are as follows: (a) 903,202 after a period of 12 months from the Orinter Closing Date, and (b) 823,203 shares after a period of 24 months from the Orinter Closing Date.

(iii) The purchase consideration includes an earn-out obligation of $10.0 million (paid in equal installments over 3 years) contingent on Orinter meeting certain EBITDA targets for the years ended December 31, 2024, 2025 and 2026, respectively.
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Assets acquired:Estimated Fair Value
Cash$624 
Accounts receivable39,960 
Prepaid expenses and other current assets1,447 
Property and equipment336 
Goodwill14,524 
Operating lease right-of-use-assets172 
Indemnification asset2,651 
Intangible assets29,650 
Fair value of assets acquired89,364 
Liabilities assumed:
Accounts payable31,243 
Accrued expenses and other current liabilities6,437 
Operating lease liabilities103 
Indemnification liability2,651 
Deferred tax liability8,748 
Fair value of liabilities assumed49,182 
Total purchase consideration$40,182 
Goodwill
The excess of the purchase price consideration over the fair values assigned to the assets acquired and liabilities assumed was recorded as goodwill. The resulting goodwill is primarily attributable to expected post-acquisition synergies from integrating Orinter’s technology with Mondee’s platform and technology. Goodwill recorded in connection with the acquisition was allocated to the travel marketplace segment and is not amortizable for income tax purposes. The goodwill attributable to the acquisition was recorded as a non-current asset and is not amortized but is subject to an annual review for impairment.
Identifiable Intangible Assets
The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (fair value in thousands):
Useful life (years)Fair value
Customer relationships11$22,000 
Trade names157,650 
Total acquired intangibles$29,650 
Since the acquisition, Orinter was included in the Company’s travel marketplace segment.

For the year ended December 31, 2023, the Company recorded $0.4 million of acquisition costs related to the Orinter Acquisition in general and administrative expenses on the consolidated statements of operations. The amounts of revenue and pretax net income of Orinter included in the Company’s consolidated statement of operations from the Orinter Closing Date to December 31, 2023 were $63.7 million and $11.7 million, respectively.

Indemnification asset and liability

The Company recorded an indemnification asset and corresponding liability of $2.7 million for the outcome of a contingency from tax liabilities related to employment and other taxes with respect to Orinter’s pre-acquisition activities, for which we are indemnified by Orinter Sellers.
Interep Acquisition
On May 12, 2023 (the “Interep Closing Date”), the Company acquired all of the outstanding stock of Interep Representações Viagens E Turismo S.A. (“Interep”, such transaction referred to as the “Interep Acquisition”). Interep is a Brazilian travel operator that focuses on the upscale segment of the travel market. This acquisition further expands the Company’s geographical footprint in Latin America, enhance its product offerings and provide a complementary distribution network to that of Orinter, given Interep’s focus on the luxury market.

The acquisition date fair value of consideration transferred for Interep is as follows (in thousands):
Cash consideration (i) (ii)
$4,633 
Issuance of Class A Common Stock (iii)
3,097 
Other consideration - travel credit (iv)
50 
Fair value of earn-out consideration (v)
1,700 
Total purchase consideration$9,480 
In connection with the acquisition, the Company agreed to pay total consideration of (i) $4.0 million on the Interep Closing Date, (ii) a deferred payment of $0.7 million paid over 36 installments, (iii) 411,000 shares of Company Class A Common Stock, (iv) $0.1 million in travel credits, and (v) an earn-out component up to an aggregate of $3.0 million contingent on Interep meeting certain adjusted EBITDA targets by the end of fiscal year 2025.

The Company estimated the preliminary fair value of acquired assets and liabilities as of the effective time of the Interep Acquisition based on information currently available and continues to adjust those estimates upon refinement of market participant assumptions for integrating businesses. The Company is continuing to obtain information to determine the acquired assets and liabilities, including the customer deposit liability balance, tax liabilities and other attributes. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period, but no later than one year from the date of the Interep Closing Date. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized, to the assets acquired and liabilities assumed, with a corresponding offset to goodwill. Final determination of the fair values may result in further adjustments to the values presented in the following table.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Assets acquired:Estimated Fair Value
Cash$2,925 
Accounts receivable21,989 
Prepaid expenses and other current assets683 
Property and equipment61 
Operating lease right-of-use-assets63 
Other non-current assets
Goodwill2,403 
Indemnification asset1,844 
Intangible assets7,570 
Fair value of assets acquired37,547 
Liabilities assumed:
Accounts payable22,962 
Accrued expenses and other current liabilities1,112 
Operating lease liabilities63 
Other long-term liabilities14 
Indemnification liability1,844 
Deferred tax liability2,072 
Fair value of liabilities assumed28,067 
Total purchase consideration$9,480 
The Company recorded $5.2 million for customer relationships with an estimated useful life of 7.5 years, and $2.3 million for trade names with an estimated useful life of 15 years. The resulting goodwill is primarily attributable to the assembled workforce and expanded market opportunities from the Interep Acquisition. Goodwill recorded in connection with the acquisition was allocated to the travel marketplace segment and is not amortizable for income tax purposes. The Company recorded an indemnification asset and corresponding liability of $1.8 million for the outcome of a contingency from tax liabilities related to employment and other taxes with respect to Interep’s pre-acquisition activities, for which we are indemnified by Interep sellers.

For the year ended December 31, 2023, the Company recorded $0.1 million of acquisition costs related to the Interep Acquisition in general and administrative expenses in the consolidated statements of operations.

The amounts of revenue and pretax net income of Interep included in the Company’s consolidated statement of operations from the Interep Closing Date to December 31, 2023 were $18.3 million and $2.3 million, respectively.
Consolid Acquisition
On May 12, 2023 (the “Consolid Closing Date”), the Company acquired all of the outstanding stock in Consolid Mexico Holding, S.A. P.I. de C.V. (“Consolid”) (such transaction referred to as the “Consolid Acquisition”). Consolid is a high-growth, leading travel provider based in Mexico with the main objective of generating higher income for travel agencies in Mexico and around the world through first-class technological tools with products and services. Through this acquisition, the Company expands its geographic footprint in Mexico’s domestic and outbound travel market, as well as in other areas of Latin America.

The acquisition date fair value of consideration transferred for Consolid is as follows (in thousands):
Amount
Cash consideration$3,406 
Fair value of earn-out consideration1,820 
Total purchase consideration$5,226 
In connection with the Consolid Acquisition, the Company agreed to pay cash consideration of $3.4 million and an earn-out component up to an aggregate of $1.0 million in cash and 400,000 shares of the Company’s Class A Common Stock, contingent on Consolid meeting certain adjusted EBITDA targets for the trailing 12 months ending May 12, 2024 and the year ended December 31, 2024. The Company intends to claw back the net working capital adjustment of $0.6 million against future earn-out payments, and therefore, the $0.6 million is recorded net against the fair value of the earn-out liability on the consolidated balance sheet since these amounts have the right to offset.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Assets acquired:Estimated Fair Value
Cash$4,050 
Accounts receivable3,569 
Prepaid expenses and other current assets1,236 
Deferred income tax assets690 
Property and equipment90 
Goodwill1,662 
Operating lease right-of-use-assets143 
Intangible assets1,174 
Other non-current assets41 
Fair value of assets acquired12,655 
Liabilities assumed:
Accounts payable5,441 
Accrued expenses and other current liabilities1,534 
Operating lease liability143 
Other long-term liabilities311 
Fair value of liabilities assumed7,429 
Total purchase consideration$5,226 
The intangible assets acquired include customer relationships with a fair value of $0.7 million and an estimated useful life of 8.5 years, as well as trade names with a fair value of $0.5 million and an estimated useful life of 15 years. The resulting goodwill is primarily attributed to the assembled workforce and expanded market opportunities obtained through the Consolid Acquisition. Goodwill recorded in connection with the acquisition was allocated to the travel marketplace segment and is not deductible for income tax purposes. For the year ended December 31, 2023, the Company recorded $0.3 million of acquisition costs related to the Consolid Acquisition in general and administrative expenses in the consolidated statements of operations.

The amounts of revenue and pretax net income of Consolid included in the Company’s consolidated statement of operations from the Consolid Closing Date to December 31, 2023 were $5.7 million and $1.2 million respectively.
Skypass Acquisition
On August 12, 2023 (the “Skypass Closing Date”), the Company executed the Share Purchase Agreement to purchase all of the outstanding shares of Skypass Travel Inc., Skypass Travel de Mexico Sa de CV, Skypass Travel Private Limited and Skypass Holidays, LLC (collectively, “Skypass”) (such transaction referred to as the “Skypass Acquisition”). Skypass is an international travel operator specializing in national and international air travel and hotel bookings primarily for travelers and employees associated with international corporations. The Skypass Acquisition allows the Company to expand its reach in the cruise and holiday packages travel sectors.

The acquisition date fair value of consideration transferred for Skypass is as follows (in thousands):
Amount
Cash consideration(i)
$3,214 
Issuance of Class A Common Stock at Closing(ii)
5,320 
Deferred stock consideration(iii)
1,584 
Fair value of earn-out consideration(iv)
434 
Total purchase price consideration$10,552 
In connection with the acquisition, the Company agreed to pay total consideration of (i) $3.0 million on the Skypass Closing Date, with an adjustment for working capital, (ii) 900,000 shares of the Company’s Class A Common Stock on the Skypass Closing Date, (iii) 100,000 shares of the Company’s Class A Common Stock within 60 days after each of the first, second and third anniversaries of the Skypass Closing Date, and (iv) an earn-out component up to an aggregate of 1,800,000 shares of Company Class A Common Stock over a four year period contingent on Skypass meeting certain adjusted EBITDA growth targets. In the event the EBITDA target is exceeded, the Company is required to pay additional shares of 2.5% on excess of the EBITDA target. The number of shares payable will be calculated based on the market value of the Company’s Class A Common Stock at settlement date.

The Company estimated the preliminary fair value of acquired assets and liabilities as of the effective time of the Skypass Acquisition based on information currently available and continues to adjust those estimates upon refinement of market participant assumptions for integrating businesses. The Company is continuing to obtain information to finalize the acquired assets and liabilities, including accounts receivables balance, tax liabilities and other attributes. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period, but no later than one year from the date of the Skypass Closing Date. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized, to the assets acquired and liabilities assumed, with a corresponding offset to goodwill. Final determination of the fair values may result in further adjustments to the values presented in the following table.
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
Assets acquired:Estimated Fair Value
Cash$1,746 
Accounts receivable2,797 
Prepaid expenses and other current assets25 
Goodwill4,009 
Operating lease right-of-use-assets1,006 
Intangible assets4,135 
Fair value of assets acquired13,718 
Liabilities assumed:
Accounts payable668 
Accrued expenses and other current liabilities684 
Operating lease liabilities714 
Deferred income tax1,100 
Fair value of liabilities assumed3,166 
Total purchase consideration$10,552 
The intangible assets acquired include customer relationships with a fair value of $3.4 million and an estimated useful life of 8.4 years, as well as trade names with a fair value of $0.8 million and an estimated useful life of 15 years. The resulting goodwill is primarily attributed to the assembled workforce and expanded market opportunities obtained through the Skypass Acquisition. Goodwill recorded in connection with the acquisition was allocated to the travel marketplace segment and is not deductible for income tax purposes. For the year ended December 31, 2023, the Company recorded $0.2 million of acquisition costs related to the Skypass Acquisition in general and administrative expenses in the consolidated statements of operations.

The Company has included the financial results of Skypass in its consolidated financial statements from the Skypass Closing Date to December 31, 2023, which have not been material to date. Pro forma results of operations have not been presented because the effect of the acquisition was not material to the consolidated statements of operations.
Purple Grids Acquisition
On November 13, 2023 (the “Purple Grids Closing Date”), the Company completed the acquisition of Purple Grids, Inc., a company focused on combining open AI with business intelligence and Robotic Process Automation (“RPA”) to automate customer experiences (such transaction referred to as the “Purple Grids Acquisition”). The acquisition was accounted for as an asset acquisition. The purchase of Purple Grids was $8.7 million, which primarily consisted of $5.5 million in shares of the Company’s Class A Common Stock and an earn-out component of $3.2 million contingent on the achievement of certain revenue and stock price targets. The earn-out consideration is equity-classified in accordance with ASC 815 as it was concluded to be indexed to the Company’s stock. The fair value of the earn-out consideration is estimated as of the acquisition date based on our estimates and assumptions utilizing the Monte Carlo simulation method.

As part of the asset acquisition, the Company recorded $10.9 million for developed technology and $0.5 million for assembled workforce with estimated useful lives of seven years and three years, respectively, and assumed $3.1 million in deferred tax liabilities.
LBF US Divestiture
In July 2023, the Company entered into a letter of intent with a former employee to sell LBF Travel Inc, LBF Travel Holdings LLC, Avia Travel and Tours Inc, and Star Advantage Limited (collectively, "LBF US") for net proceeds of 200,000 shares of the Company’s Class A Common Stock, which was valued at $1.8 million as of the disposal date. The Company allocated $0.5 million of the value of the shares to post-sales support provided to LBF US subsequent to the sale and recognized the remaining $1.3 million as purchase consideration. The divestiture of LBF US closed in September 2023. LBF US was initially acquired by the Company on December 20, 2019 ("2019 Acquisition") and operated within the travel marketplace segment. The buyer was a previous owner of LBF Travel Inc, who then became a Mondee employee along with the 2019 Acquisition until Mondee’s divestiture of LBF US.

In connection with the sale, the Company recognized a net gain of $1.3 million, which was recorded in other income (expense). Additionally, the Company agreed to provide certain short-term transition services to support the divested business through the third quarter of 2023, which was subsequently amended to extend through January 2024. The Company incurred $10.4 million of transition service costs for the year ended December 31, 2023, which was recorded in other income (expense), net. As of December 31, 2023,
the Company has paid $7.7 million towards the LBF US transition services, and have a remaining amount of $2.7 million unpaid. The results of the divested business through date of sale and the transition services provided to LBF US post the sale were reflected within the travel marketplace segment.
Unaudited Pro Forma Operating Results
The following unaudited pro forma combined financial information presented the results of operations as if (i) the business combinations with Orinter, Interep, Consolid and (ii) the divestiture of LBF US were consummated on January 1, 2022 (the beginning of the comparable prior reporting period), including certain pro forma adjustments that were directly attributable to the Orinter, Interep, and Consolid Acquisitions, including additional amortization adjustments for the fair value of the assets acquired. These unaudited pro forma results do not reflect any synergies from operating efficiencies post their acquisition dates. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations. The unaudited pro forma financial information did not include the effect of Skypass Acquisition due to its insignificant impact to the Company's consolidated operation results.
Year Ended December 31,
(in thousands)20232022
Revenues, net$232,983$191,885
Net loss(43,715)(75,193)