We estimate that the net proceeds from our sale of shares of common
stock in this offering at an assumed initial public offering price of
$ per share, the midpoint of the price range set forth on the
cover page of this prospectus, after deducting estimated underwriting
discounts and commissions and estimated offering expenses payable by us,
will be approximately $ million, or $ million if the
underwriters’ option to purchase additional shares is exercised in full.
A $1.00 increase (decrease) in the assumed initial public offering price
would increase (decrease) the net proceeds to us from this offering by
$ million, assuming the number of shares offered by us, as set
forth on the cover page of this prospectus, remains the same and after
deducting the estimated underwriting discounts and commissions.
We will not receive any proceeds from the sale of shares of common stock
by the selling stockholders although we will bear certain of the costs,
excluding underwriting discounts and commissions, associated with the sale
of these shares.
We intend to use the net proceeds of this offering primarily for general
corporate purposes and other operating expenses, including: capital
expenditures, expenditures relating to the expansion of our operations;
sales and marketing expenses; and general and administrative expenses.
In addition, if appropriate opportunities arise to acquire or invest in
complementary businesses, product lines, products or technologies, we may
use a portion of the net proceeds for such acquisition or investment.
However, we are not currently discussing any such potential acquisition
or investment with any third party. We may also use a portion of the net
proceeds for repayment of our existing indebtedness. The amount and timing of
these expenditures will vary depending on a number of factors, including
competitive and technological developments and the rate of growth, if any,
of our business.
Pending their use, we plan to invest our net proceeds from this offering
in short-term, interest-bearing obligations, investment-grade instruments,
certificates of deposit or direct or guaranteed obligations of the U.S.
government.
While we do not believe that any specific competitor offers the breadth of
business network solutions and collaborative capabilities that we do, the
distinct markets that make up the business network space are each rapidly
evolving and highly competitive. We face competition from the following
types of companies:
• ERP vendors: Companies such as Infor, Oracle and SAP offer ERP extension
solutions that provide features similar to a limited subset of our offerings
in the area of trading partner portals. These companies may include those
solutions as part of their larger ERP or business application offerings. As
each trading partner is likely to have some form of existing ERP system, we
are able to provide a common platform tying these disparate systems together
as a business network. Our solutions generally do not replace the current
functionality of existing ERP systems and therefore tend not to undermine
our customers’ investments in their existing business applications. Our
customers have found that our solutions extend and enhance the value of
their existing ERP systems by adding integration, multi-enterprise processes,
and real-time collaboration capabilities. Therefore, we do not believe
traditional ERP vendors view our solutions as a competitive alternative
to their own offerings.
• Multi-enterprise B2B infrastructure vendors: Companies like GXS Corporation,
IBM/Sterling Commerce and SPS Commerce provide point solutions in the B2B
integration space. We do not view these offerings as competitive with our
solutions. While our strategy is to provide a broader solution which can
include B2B integration functionality, we believe integration platforms as
standalone solutions lack the business processes and analytics that E2open
provides.
• Niche applications vendors: Companies like JDA Software Group, Inc. have
specialized functionality for specific process areas such as transportation
management, demand planning or network design. Niche applications may provide
important functionality for enterprises, but they typically are not built for
multi-enterprise process management or a multi-tier environment.
• Internally developed solutions: Potential customers with large in-house IT
departments are capable of developing applications customized for their
businesses and many have. Typically, these applications lack complete
functionality required to run complex, multi-tier trading networks.
strategies and complex trading networks to compete in today’s global economy.
They use our solutions to gain visibility into and control over their trading
networks through the real-time information, integrated business processes and
advanced analytics that we provide. Our solutions enable our customers and
their trading partners to overcome problems arising from communications across
disparate systems by offering a reliable source of data, processes and
analytics, which our customers rely on as the single version of the truth.
Our solutions empower our customers to manage demand they cannot predict and
supply they do not control.
We refer to the combination of our software applications delivered on our
cloud-based platform, the content contributed by our network participants
and our enabling services as the E2open Business Network. The E2open Business
Network has grown to over 30,000 unique registered trading partners. It allows
our network participants to access and share data and execute business
processes in a secure, real-time manner, while providing them with
collaboration tools and analytics so that our customers can make more
informed and efficient decisions. Our customer base includes companies
that represent five of the top eight supply chains in the world, according
to Gartner, Inc., and spans several industries including many large
multinational companies such as Boeing, Cisco, Dell, the Gap, GE,
Flextronics, IBM, Lab126 (part of the Amazon.com, Inc. group of companies),
Motorola and Vodafone. To date, our target markets have been Technology,
Telecommunications, Aerospace and Defense, and Consumer Products.
E2open transcends traditional supply chain software categories, which include
business-to-business, or B2B, integration, procurement, forecasting, planning
and execution, by enabling coordination and collaboration among enterprises,
which we call “collaborative execution.” By providing our solutions in an
integrated cloud-based environment, our customers and their trading partners
can easily share detailed and relevant content and data to gain the visibility
they need for collaborative execution across their extended trading network.
Our customers benefit from the following key differentiating features of the
E2open Business Network:
• Cross-network analytics . We provide cross-network analytics for real-time
monitoring and control of large volumes of data to sense and respond quickly
and collaboratively to changes, opportunities or disruptions in the supply
chain.
• Multi-enterprise, multi-tier supply and demand process management . We
support key operational processes, such as forecast, order and inventory
management, for our customers and their multi-tiered supply and demand
trading networks.
• Scalable, secure cloud-based connectivity platform . Our solutions combine
B2B connectivity and integration capabilities that allow our customers to
securely connect, share and act on information across their trading networks
that can include thousands of partners.
• Integration with existing systems . Our highly-configurable solutions
integrate with many Enterprise Resource Planning, or ERP, systems to
efficiently manage complex networks and facilitate the interchange of
transactions.
We believe that the E2open Business Network is strategic to our customers
in that it enables them to increase revenue and productivity, and to reduce
operating expenditures, working capital and cost of goods sold. Our solutions
seamlessly integrate with and enhance our customers’ mission critical business
systems and processes across their trading networks.
We have achieved strong growth as our network has scaled and as we have
expanded our solutions. Our platform originated as a solution to help our
customers connect with their manufacturing and distribution partners in
their trading network. Next, we introduced solutions for multi-enterprise
supply management, and then we introduced solutions to help our customers
coordinate multi-enterprise demand management. Our revenue has grown from
$37.7 million in fiscal 2009 to $44.4 million in fiscal 2010 to $55.5 million
in fiscal 2011 and $59.7 million in fiscal 2012. Effective March 1, 2011, we
adopted new accounting guidance relating to multiple-element arrangements,
which had the effect of increasing fiscal 2012 revenue by $10.9 million more
than would have been recognized during the year had such accounting guidance
not been adopted. Bookings were $57.5 million for fiscal 2010, $56.9 million
for fiscal 2011 and $72.6 million for fiscal 2012. Additionally, from March
1, 2008 through February 29, 2012, we increased backlog from $24.4 million
to $78.6 million, representing a 221.9% increase.
-----------
E2open, LLC commenced operations in 2000 as a venture between a number of
strategic corporate investors, financial investors and advisors. In 2003,
E2open, Inc. was incorporated in Delaware, and merged with E2open, LLC,
with E2open, Inc. becoming the surviving entity in the merger.
Our principal executive offices are located at 4100 East Third Avenue, Suite
400, Foster City, California 94404, and our telephone number is
(650) 645-6500. Our website address is www.e2open.com.
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