ACQUISITION (Tables)

6 Months Ended

Aug. 02, 2020

Business Combinations [Abstract]

Schedule of Consideration Transferred and Acquisition Related Expenses

The following table summarizes the fair value of the consideration transferred at the date of acquisition, as well as the calculation of goodwill based on the excess of consideration over the provisional fair value of net assets acquired. As part of the transaction, the Company assumed $30.1 million of MIRROR's outstanding debt. This included $15.1 million of external debt that was settled as part of the transaction and $15.0 million of debt previously owed by MIRROR to the Company, which

represents the effective settlement of a preexisting relationship. The debt was determined to be at market terms and was recognized as a component of the consideration transferred, and no gain or loss was recorded on settlement.

	July 7, 2020
	(in thousands)
Fair value of consideration transferred:
Cash paid to shareholders	$	428,261
Employee options attributed to pre-combination vesting	4,569
Acquired debt settled on acquisition	30,122
Fair value of existing lululemon investment	1,782
	464,734
Less cash and cash equivalents acquired	(12,153)
Fair value of consideration transferred, net of cash and cash equivalents acquired	$	452,581
Less net assets acquired:
Assets acquired:
Inventories	$	16,734
Prepaid expenses and other current assets	3,492
Intangible assets	85,000
Other non-current assets	5,648
	$	110,874
Liabilities assumed:
Current liabilities	$	(13,465)
Current and non-current lease liabilities	(3,246)
Net deferred income tax liability	(4,074)
	$	(20,785)
Net assets acquired	$	90,089
Goodwill	$	362,492

The following table summarizes the acquisition-related expenses recognized during fiscal 2020:

	Quarter Ended  August 2, 2020		Two Quarters Ended  August 2, 2020
	(in thousands)
Acquisition-related expenses:
Transaction and integration costs	$	7,201	$	9,246
Gain on existing investment	(782)		(782)
Acquisition-related compensation	5,045		5,045
	$	11,464	$	13,509
Income tax effects of acquisition-related expenses	$	(1,967)	$	(1,967)

Schedule of Acquired Finite-Lived Intangible Assets

The fair value of the separately identifiable intangible assets, and their estimated useful lives as of the acquisition date were as follows:

	Estimated Fair Value		Estimated Useful Life
	(In thousands)
Intangible assets:
Brand	$	26,500	20.0 years
Customer relationships	28,000		10.0 years
Technology	25,500		7.5 years
Content	5,000		5.0 years
	$	85,000