Quarterly report pursuant to Section 13 or 15(d)

Business Combinations (Tables)

v3.22.1
Business Combinations (Tables)
3 Months Ended
Apr. 30, 2022
Business Acquisition [Line Items]  
Summary of unaudited pro forma financial information

The following unaudited pro forma financial information summarizes the results of operations for the Company as though the acquisitions of Skillsoft, Global Knowledge and Codecademy had occurred on February 1, 2021 (in thousands):

Unaudited Pro Forma Statement of Operations

Three months

ended April 30,

    

2022

Revenue

$

171,972

Net loss

 

(35,347)

Unaudited Pro Forma Statement of Operations

Three months

ended April 30,

    

2021

Revenue

$

168,151

Net loss

 

(32,250)

SLH  
Business Acquisition [Line Items]  
Summary of purchase consideration

The following summarizes the purchase consideration (in thousands):

Description

    

Amount

Class A common stock issued

$

258,000

Class B common stock issued*

 

48,375

Cash payments

505,000

Second Out Term Loan

20,000

Cash settlement of seller transaction costs

1,308

Total Purchase Price

$

832,683

*Shares of Class B common stock were converted into Successor Class A common stock at the time of the Skillsoft Merger.

Summary of fair value of the purchase price allocation

The Company preliminarily recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands):

Updated

Preliminary Purchase

Preliminary Purchase

Description

Price Allocation

Adjustments (1)(2)

    

Price Allocation

Cash, cash equivalents and restricted cash

$

120,273

$

$

120,273

Current assets

118,847

706

119,553

Property and equipment

 

10,825

 

1,632

 

12,457

Intangible assets

769,799

(4,701)

765,098

Long term assets

 

18,629

 

 

18,629

Total assets acquired

1,038,373

(2,363)

1,036,010

Current liabilities

 

(49,056)

 

(350)

 

(49,406)

Debt, including accounts receivable facility

 

(552,977)

 

 

(552,977)

Deferred revenue

 

(123,300)

 

(114,047)

 

(237,347)

Deferred and other tax liabilities

 

(99,699)

 

15,920

 

(83,779)

Long term liabilities

 

(18,325)

 

1

 

(18,324)

Total liabilities assumed

(843,357)

(98,476)

(941,833)

Net assets acquired

195,016

(100,839)

94,177

Goodwill

637,667

100,839

738,506

Total purchase price

$

832,683

$

$

832,683

(1) The increase in deferred revenue (and the corresponding increase to Goodwill by the same amount) is the result of the adoption of ASU 2021-08 in the quarter ended October 31, 2021.
(2) All other changes represent measurement period adjustments attributable to the Company’s review of inputs and assumptions utilized in valuation models and additional information being obtained on preacquisition liabilities, since the initial purchase price allocation. The measurement period adjustments did not have a significant impact on the Company’s results of operations in prior periods.

Summary of identifiable intangible assets and estimated useful lives

The preliminary values allocated to identifiable intangible assets and their estimated useful lives are as follows (in thousands):

Description

    

Amount

    

Life

Trademark/tradename – Skillsoft

$

84,700

 

indefinite

Trademark/tradename – SumTotal

 

5,800

 

9.6

years

Courseware

186,600

 

5

years

Proprietary delivery and development software

114,598

2.5-7.6

years

Publishing Rights

 

41,100

 

5

years

Customer relationships

 

271,400

 

12.6

years

Backlog

 

60,900

 

4.6

years

Total

$

765,098

 

  

GK  
Business Acquisition [Line Items]  
Summary of purchase consideration

The following summarized the purchase consideration (in thousands):

Description

    

Amount

Cash consideration

$

170,199

Warrants Issued

 

14,000

Joinder Term Loans

70,000

Cash settlement of seller transaction costs

4,251

Total Purchase Price

$

258,450

Summary of fair value of the purchase price allocation

The Company preliminarily recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands):

Updated

Preliminary Purchase

Preliminary Purchase

Description

Price Allocation

Adjustments (1)(2)

    

Price Allocation

Cash, cash equivalents

$

17,524

$

157

$

17,681

Current assets

 

47,849

 

(2,347)

 

45,502

Property and equipment

5,531

1,625

7,156

Intangible assets

185,800

185,800

Long term assets

 

12,401

 

(3,106)

 

9,295

Total assets acquired

269,105

(3,671)

265,434

Current liabilities

 

(74,463)

 

10,944

 

(63,519)

Deferred revenue

 

(23,018)

 

(8,191)

 

(31,209)

Deferred and other tax liabilities

(16,934)

(8,571)

(25,505)

Long term liabilities

(4,248)

2,177

(2,071)

Total liabilities assumed

(118,663)

(3,641)

(122,304)

Net assets acquired

150,442

(7,312)

143,130

Goodwill

108,008

7,312

115,320

Total Purchase Price

$

258,450

$

$

258,450

(1) The increase in deferred revenue (and the corresponding increase to Goodwill by the same amount) is the result of the adoption of ASU 2021-08 in the quarter ended October 31, 2021.
(2) All other changes represent measurement period adjustments attributable to the Company’s review of inputs and assumptions utilized in valuation models and additional information being obtained on preacquisition liabilities, since the initial purchase price allocation. The measurement period adjustments did not have a significant impact on the Company’s results of operations in prior periods.

Summary of identifiable intangible assets and estimated useful lives

The preliminary values allocated to identifiable intangible assets and their estimated useful lives are as follows (in thousands):

Description

    

Amount

    

Life

Trademark/tradename

$

25,400

 

indefinite

Courseware

 

1,500

 

3

years

Proprietary delivery and development software

2,500

 

0.6

years

Vendor relationships

43,900

2.6

years

Customer relationships

 

112,500

 

10.6

years

Total

$

185,800

 

  

Codecademy [Member]  
Business Acquisition [Line Items]  
Summary of purchase consideration

The following summarizes the purchase consideration (in thousands):

Description

    

Amount

Cash payments

$

202,119

Class A common stock issued

182,550

Cash settlement of seller transaction costs and other

1,315

Total Purchase Price

$

385,984

Summary of fair value of the purchase price allocation

The Company preliminarily recorded the fair value of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed as follows (in thousands):

Preliminary Purchase

Description

Price Allocation

Cash, cash equivalents and restricted cash

$

4,262

Current assets

3,671

Property and equipment

 

385

Intangible assets

112,000

Total assets acquired

120,318

Current liabilities

 

(4,290)

Deferred revenue

 

(18,396)

Deferred tax liabilities

 

(21,615)

Total liabilities assumed

(44,301)

Net assets acquired

76,017

Goodwill

309,967

Total purchase price

$

385,984

Summary of identifiable intangible assets and estimated useful lives

The preliminary values allocated to identifiable intangible assets and their estimated useful lives are as follows (in thousands):

Description

    

Amount

    

Life

Tradename

$

44,000

 

13.8

years

Developed Technology

 

40,000

 

5

years

Content

18,000

 

5

years

Customer relationships

 

10,000

 

5.8

years

Total

$

112,000