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 |
|
|
|
|