ACQUISITIONS

GXS Group, Inc.

On January 16, 2014, we acquired GXS Group, Inc. (GXS), a Delaware corporation and leader in cloud-based, business-to-business (B2B) integration. The acquisition is expected to reinforce OpenText's leadership in Enterprise Information Management (EIM) by combining OpenText's Information Exchange portfolio with GXS' portfolio of B2B integration services and managed services. Total consideration for GXS was $1.2 billion, inclusive of the issuance of 2,595,042 OpenText Common Shares on a post stock-split basis. In accordance with ASC Topic 805 "Business Combination" (ASC Topic 805), this acquisition was accounted for as a business combination.

The results of operations of GXS have been consolidated with those of OpenText beginning January 16, 2014.

The following tables summarize the preliminary consideration paid for GXS and the amount of the assets acquired and liabilities assumed, as well as the preliminary goodwill recorded as of the acquisition date:



Cash consideration paid	$	1,102,053
Equity consideration paid	$	116,777
Preliminary purchase consideration	$	1,218,830
Acquisition related costs (included in Special charges in the Condensed Consolidated Statements of Income) for the nine months ended March 31, 2014	$	6,782

As set forth in the purchase agreement, $60.0 million of the total cash consideration paid is currently being held by an escrow agent for indemnification purposes. Subject to certain conditions being met, this consideration will be released to the former equity holders of GXS in the amount of $30.0 million nine months from the date of acquisition, and the remaining amount on the final release date in January 2016.

Preliminary Purchase Price Allocation

The preliminary purchase price of GXS has been allocated to GXS' tangible and identifiable intangible assets acquired and liabilities assumed, based on their estimated fair values as of the acquisition date. For certain assets and liabilities, the book values as of the balance sheet date have been determined to reflect fair values. The excess of the purchase price over the net tangible and identifiable intangible assets has been recorded as goodwill. The preliminary allocation of the purchase price was based upon a preliminary valuation and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date).

Our preliminary purchase price allocation for GXS is as follows:



Current assets (inclusive of cash acquired of $24,382)	$	127,463
Non-current tangible assets	47,501
Intangible customer assets	364,600
Intangible technology assets	123,200
Liabilities and non-controlling interest assumed	(282,213		)
Total identifiable net assets	380,551
Goodwill	838,279
Net assets acquired	$	1,218,830

The finalization of the above purchase price allocation is pending the determination of the finalization of the fair value for taxation-related balances and for potential unrecorded liabilities. We expect to finalize this determination on or before December 31, 2014.

No portion of the goodwill recorded upon the acquisition of GXS is expected to be deductible for tax purposes.

The fair value of current assets acquired includes accounts receivable with a fair value of $94.3 million. The gross amount receivable was $108.2 million of which $13.9 million of this receivable was expected to be uncollectible.

The amount of GXS’ revenues and net income included in our Condensed Consolidated Statements of Income for the three months ended March 31, 2014 is set forth below:



	January 16, 2014— March 31, 2014
Revenues	$	95,099
Net income	$	1,838

The unaudited pro forma revenues and net income (loss) of the combined entity for the three and nine months ended March 31, 2014 and 2013, respectively, had the acquisition been consummated as of July 1, 2012, are set forth below:



	Three Months Ended March 31,					Nine Months Ended March 31,
	2014			2013		2014		2013
Supplemental Unaudited Pro forma Information
Total revenues	$	462,683		$	456,441	$	1,396,816	$	1,382,618
Net income (loss)*	$	(24,514	)	$	16,891	$	37,927	$	94,264

* Included in pro forma net income (loss) for the three and nine months ended March 31, 2014 are estimated amortization charges relating to the allocated values of intangible assets, estimated interest expense as though the incurrence of debt used to finance the acquisition occurred on July 1, 2012, and approximately $69.0 million of one-time expenses incurred by GXS on account of the acquisition. These one-time expenses include a) approximately $29.0 million in employee change in control payments, b) approximately $32.0 million of interest expense on account of penalties incurred on the early extinguishment of GXS’ debt, as part of the purchase agreement, and c) approximately $8.0 million of transaction fees triggered by the closing of the acquisition.

The unaudited pro forma financial information in the table above is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the periods presented or the results that may be realized in the future.