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Acquisition | 9 Months Ended
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Sep. 30, 2019
Acquisition |
Acquisition | 3. Acquisition On January 22, 2019, GCE acquired Orbis Education for $361,184 (inclusive of closing date adjustments and net of cash acquired). Orbis Education is an education services company that supports healthcare education programs for 21 university partners across the United States. Concurrent with the closing of the Acquisition, GCE entered into an amended and restated credit agreement and used $191,000 from the amended and restated credit agreement and $171,034 of operating cash on hand to complete the purchase. See Note 11 of our consolidated financial statements for a description of the amended and restated credit agreement. The fair value of the assets acquired, less the liabilities assumed exceeded the purchase price by $157,930 which was recorded as goodwill. Transaction costs for the Acquisition for the year ended December 31, 2018 were $808 and for the nine months ended September 30, 2019 were $3,966, which are included in the Loss on transaction in our consolidated income statement. The Acquisition was accounted for in accordance with the acquisition method of accounting. Under this method the cost of the target is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The following table provides a tabular depiction of the Company’s allocation of the total purchase price to each of the assets acquired and liabilities assumed based on the Company’s fair value estimates. ​
​ | ​ | ​ | ​
Assets acquired |  | ​ | ​
Cash, including $300 of pledged collateral | ​ | $ | 4,793
Accounts receivable, net of allowance of $0 | ​ | $ | 3,236
Property and equipment | ​ | $ | 5,392
Right-of-use assets | ​ | $ | 13,069
Intangible assets | ​ | $ | 210,280
Other assets | ​ | $ | 2,793
Liabilities assumed | ​ | ​ | ​
Accounts payable | ​ | $ | 4,308
Accrued and other liabilities | ​ | $ | 4,451
Lease liability | ​ | $ | 13,069
Deferred tax liability | ​ | $ | 9,643
Deferred revenue | ​ | $ | 45
Total net asset or liability purchased and assumed | ​ | $ | 208,047
​ | ​ | ​ | ​
Purchase price | ​ | $ | 365,977
​ | ​ | ​ | ​
Excess of fair value of net assets acquired over consideration given | ​ | $ | 157,930
​ The estimated fair values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature. The majority of property and equipment were also estimated based upon historical costs as they approximated fair value. Identified intangible assets of $210,280 consisted primarily of university partner relationships that were valued at $210,000. The fair value of university partner relationships was determined using the multiple-period excess earnings method. The amounts recorded related to the Acquisition are subject to adjustment as the Company has not yet completed the final allocation of the purchase price. The Company adjusted its allocation of the purchase price by $9,643 in the three months ended June 30, 2019, primarily as the result of the tax effect of a lower tax basis in the acquired assets. The Company has one year from the date of the Acquisition to complete the allocation of the purchase price. The Company has consolidated the results of operations for Orbis Education since its Acquisition on January 22, 2019. Consolidated net revenue and consolidated net income for the nine months ended September 30, 2019 include $62,289 of service revenue and a loss, net of taxes, of $1,297 from Orbis Education, which includes $6,044 of amortization of intangible assets. The following table reports pro forma information as if the Acquisition of Orbis Education had been completed at the beginning of the earliest period presented: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | Nine Months Ended September 30,
​ |  | 2019 |  | 2018 | ​ | 2019 |  | 2018
Net revenue | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
As Reported | ​ | $ | 193,289 | ​ | $ | 155,454 | ​ | $ | 565,396 | ​ | $ | 667,953
Pro forma | ​ | $ | 193,289 | ​ | $ | 171,265 | ​ | $ | 568,646 | ​ | $ | 712,304
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
As Reported | ​ | $ | 58,151 | ​ | $ | 33,761 | ​ | $ | 182,506 | ​ | $ | 153,480
Pro forma | ​ | $ | 58,151 | ​ | $ | 29,886 | ​ | $ | 171,261 | ​ | $ | 130,713
​ The pro forma information above for the three and nine months ended September 30, 2019 and 2018 includes acquisition related costs in both periods, amortization of intangible assets as a result of the Acquisition, additional interest expense on the debt issued to finance the Acquisition, depreciation expense based on the estimated fair value of the assets acquired, and warrant expense and related tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been consummated on January 1, 2019 and 2018.

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