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Acquisitions | 3 Months Ended
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Sep. 30, 2021
Acquisitions [Abstract] |
Acquisitions | 3. Acquisitions Walden University On August 12, 2021, Adtalem completed the acquisition of 100% of the equity interests of Walden for $1,481.8 million, net of cash and restricted cash of $83.4 million. Adtalem funded the purchase with the $800 million in Notes (as defined in Note 13 “Debt”), the $850 million Term Loan B (as defined in Note 13 “Debt”), and available cash on hand. Walden offers more than 100 online certificate, bachelor’s, master’s, and doctoral degrees. The acquisition furthers Adtalem’s growth strategy into becoming a leading workforce solutions provider. The operations of Walden are included in Adtalem’s Walden reportable segment (see Note 20 “Segment Information”). The results of Walden’s operations have been included in the Consolidated Financial Statements of Adtalem since the date of acquisition, which included revenue of $68.6 million and net loss of $9.2 million from the operations of Walden for the three months ended September 30, 2021. In addition, we incurred acquisition-related costs of $22.3 million and $8.6 million for the three months ended September 30, 2021 and 2020, respectively, which were included in business acquisition and integration expense in the Consolidated Statements of Income (Loss). The acquisition was accounted for as a business combination and the preliminary allocation of the purchase price to the assets acquired and liabilities assumed was based upon preliminary valuations performed to determine the fair values of the acquired items as of the acquisition date. As these valuations, particularly as they relate to intangible assets, were preliminary, they may be adjusted for up to one year after the closing date to reflect final valuations. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): ​
​ | ​ | ​ | ​
​ | ​ | August 12,
​ | ​ | 2021
Assets acquired: | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 65,010
Restricted cash | ​ | ​ | 18,389
Accounts receivable, net | ​ | ​ | 22,091
Prepaid expenses and other current assets | ​ | ​ | 8,819
Property and equipment, net | ​ |  | 25,882
Operating lease assets | ​ | ​ | 6,096
Intangible assets | ​ |  | 833,351
Goodwill | ​ |  | 642,554
Other assets | ​ |  | 21,316
Total assets acquired | ​ |  | 1,643,508
Liabilities assumed: | ​ |  | ​
Accounts payable | ​ |  | 31,971
Accrued payroll and benefits | ​ |  | 24,376
Accrued liabilities | ​ |  | 591
Deferred revenue | ​ | ​ | 10,958
Current operating lease liabilities | ​ | ​ | 1,983
Long-term operating lease liabilities | ​ | ​ | 4,343
Other liabilities | ​ | ​ | 4,098
Total liabilities assumed | ​ |  | 78,320
Net assets acquired | ​ | $ | 1,565,188
​ Goodwill, which represents the excess of the purchase price over the fair value of the net assets acquired, was all assigned to the Walden reporting unit and reportable segment. The entire goodwill amount is expected to be tax deductible. Factors that contributed to a purchase price resulting in the recognition of goodwill includes Walden’s strategic fit into Adtalem’s workforce solutions provider strategy, the reputation of the Walden brand as a leader in online education industry, and potential future growth opportunity. Of the $833.4 million of acquired intangible assets, $495.8 million was assigned to Title IV eligibility and accreditations and $119.6 million was assigned to trade names, each of which has been determined not to be subject to amortization. The preliminary values and estimated useful lives of other intangible assets acquired are as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | August 12, 2021
​ | ​ | Value | ​ | Estimated
​ | ​ | Assigned | ​ | Useful Life
Student relationships | ​ | $ | 161,900 | ​ | 3 years
Curriculum |  | $ | 56,091 |  | 5 years
​ The Title IV eligibility and accreditations intangible asset was valued using the with and without method of the income approach. The student relationships intangible asset was valued using the multi-period excess earnings method. The trade name intangible asset was valued using the relief-from-royalty method. The curriculum intangible asset was valued using the cost to replace method. Significant judgments and assumptions were used in these valuations. The following unaudited pro forma financial information summarizes our results of operations as though the acquisition occurred on July 1, 2020 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​
​ | ​ | September 30, | ​
​ | ​ | 2021 | ​ | 2020 | ​
Revenue | ​ | $ | 417,566 | ​ | $ | 435,601 | ​
Net loss attributable to Adtalem | ​ | $ | (14,693) | ​ | $ | (23,411) | ​
​ The unaudited pro forma financial information includes adjustments to reflect the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from July 1, 2020, with the consequential tax effects. The unaudited pro forma financial information also includes adjustments to reflect the additional interest expense on the debt we issued to fund the acquisition (see Note 13 “Debt” for additional information). As the ticking fees are representative of the historical interest expense incurred by Adtalem on the Term Loan B from the period of February 12, 2021 to August 12, 2021 and the unaudited pro forma financial information for the three months ended September 30, 2020 has been adjusted to include interest expense assuming the Term Loan B had been entered into as of July 1, 2020, we have made a further adjustment to remove the ticking fees recognized in the unaudited pro forma financial information for the three months ended September 30, 2021 (see Note 13 “Debt” for additional information on ticking fees). Had the Term Loan B been drawn upon on July 1, 2020 none of the ticking fees would have been incurred and, accordingly, the inclusion of such amounts would be duplicative to the interest expense incurred by Adtalem on a pro forma basis. The acquisition transaction costs we incurred in connection with the Walden acquisition are reflected in the unaudited pro forma financial information results for the three months ended September 30, 2020. This unaudited pro forma financial information is for informational purposes only. It does not reflect the integration of the business or any synergies that may result from the acquisition. As such, it is not indicative of the results of operations that would have been achieved had the acquisition been consummated on July 1, 2020. In addition, the unaudited pro forma financial information amounts are not indicative of future operating results.

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