Acquisitions

9 Months Ended

Jan. 31, 2021

Note 3 — Acquisitions

Pro forma financial information related to these acquisitions has not been provided as it is not material to our consolidated results of operations.

Fiscal Year 2021

Hindawi

On December 31, 2020, we completed the acquisition of 100% of the outstanding stock of Hindawi Limited (“Hindawi”). Hindawi is a scientific research publisher and an innovator in open access publishing. Its results of operations are included in our Research Publishing & Platforms segment.

The preliminary fair value of the consideration transferred at the acquisition date was $300.1 million which included $299.3 million of cash and $0.8 million related to the settlement of a preexisting relationship. We financed the payment of the cash consideration primarily through borrowings under our Amended and Restated RCA (as defined below in Note 15, “Debt and Available Credit Facilities”) and using cash on hand. The fair value of the cash consideration transferred, net of $1.0 million of cash acquired was approximately $298.3 million.

The Hindawi acquisition was accounted for using the acquisition method of accounting. The preliminary excess purchase price over identifiable net tangible and intangible assets has been recorded to Goodwill in our Condensed Consolidated Statements of Financial Position. Goodwill represents synergies and economies of scale expected from the combination of services. We recorded the preliminary fair value of the assets acquired and liabilities assumed on the acquisition date. None of the goodwill will be deductible for tax purposes. The acquisition related costs to acquire Hindawi were expensed when incurred and were approximately $2.3 million. Such costs were allocated to the Research Publishing and Platforms segment and are reflected in Operating and Administrative Expenses on the Unaudited Condensed Consolidated Statements of Income for the three months ended January 31, 2021.

Hindawi’s revenue and operating loss included in our Research Publishing and Platforms segment results for the three months ended January 31, 2021 was $1.6 million and $3.7 million, respectively.

The following table summarizes the preliminary consideration transferred to acquire Hindawi and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed.

	Preliminary Allocation
Total preliminary consideration transferred	$	300,086

Assets:
Current Assets		2,902
Technology, Property and Equipment, net		844
Intangible Assets, net		194,400
Goodwill		141,775
Operating Lease Right-of-Use Assets		3,716
Other Non-Current Assets		177
Total Assets	$	343,814

Liabilities:
Current Liabilities		3,657
Deferred Income Tax Liabilities		36,936
Operating Lease Liabilities		3,135
Total Liabilities	$	43,728

The following table summarizes the preliminary identifiable intangible assets acquired and their weighted-average useful life at the date of acquisition.

	Estimated Fair Value		Weighted-Average Useful Life (in Years)
Content and Publishing Rights	$	188,500		15
Developed Technology		4,500		5
Trademarks		1,000		2
Customer Relationships		400		15
Total	$	194,400

The allocation of the total consideration transferred to the assets acquired, including intangible assets and goodwill, and the liabilities assumed is preliminary, and could be revised as a result of additional information obtained due to the finalization of the third-party valuation report, leases and related commitments, tax related matters and contingencies and certain assets and liabilities, including receivables and payables, but such amounts will be finalized within the measurement period, which will not exceed one year from the acquisition date. We are also in the process of aligning our accounting policies, which could result in changes related to financial statement presentation.

Fiscal Year 2020

mthree

On January 1, 2020, we completed the acquisition of 100% of the outstanding stock of mthree. mthree is a rapidly growing education services provider that addresses the IT skills gap by finding, training and placing job-ready technology talent in roles with leading corporations worldwide. Its results of operations are included in our Education Services segment.

The fair value of the consideration transferred was $129.9 million (£98.5 million) which included $122.2 million of cash at the acquisition date, $6.4 that was paid in cash after the acquisition date as part of the assumed liabilities, and $1.3 million of cash to be paid after the acquisition date. We financed the payment of the cash consideration primarily through borrowings under our Amended and Restated RCA (as defined below in Note 15, “Debt and Available Credit Facilities”) and using cash on hand. The fair value of the cash consideration transferred including those amounts paid after the acquisition date in fiscal year 2020, net of $2.2 million of cash acquired was approximately $126.4 million.

At the time of the acquisition, Wiley entered into agreements with certain employees of mthree who will remain employees after the acquisition. Cash payments will be made based on reaching certain revenue and EBITDA targets in each year over a four-year period.

Such payments are subject to continuing employment and would therefore be considered compensation expense for services provided subsequent to the acquisition. Such expense would be recognized when it becomes probable that the targets will be achieved.

The mthree acquisition was accounted for using the acquisition method of accounting. The excess purchase price over identifiable net tangible and intangible assets has been recorded to Goodwill in our Condensed Consolidated Statements of Financial Position. The fair value assessed for the majority of the tangible assets acquired and liabilities assumed equaled their carrying value. Goodwill represents synergies and economies of scale expected from the combination of services. We recorded the fair value of the assets acquired and liabilities assumed on the acquisition date. None of the goodwill will be deductible for tax purposes. The acquisition related costs to acquire mthree were expensed when incurred and were approximately $1.3 million for the twelve months ended April 30, 2020. Such costs were primarily allocated to the Education Services segment and were reflected in Operating and Administrative Expenses on the Consolidated Statements of (Loss) Income in the year ended April 30, 2020.

mthree’s incremental revenue included in our Education Services segment results for the three and nine months ended January 31, 2021 was $7.7 million and $32.6 million, respectively.

The following table summarizes the consideration transferred to acquire mthree and the final allocation of the purchase price among the assets acquired and liabilities assumed.

	Preliminary Allocation as of April 30, 2020		Measurement Period Adjustments			Final Allocation as of January 31, 2021

Total cash consideration at the acquisition date and cash to be paid	$	122,242	$	1,289		$	123,531


Assets
Current Assets		8,750		473			9,223
Technology, Property and Equipment, net		484		—			484
Intangible Assets, net		56,836		—			56,836
Goodwill		82,561		—			82,561
Operating Lease Right-of-Use Assets		3,710		—			3,710
Total Assets	$	152,341	$	473		$	152,814

Liabilities:
Current Liabilities		14,380		(816	)		13,564
Deferred Income Tax Liabilities		12,722		—			12,722
Operating Lease Liabilities		2,692		—			2,692
Other Long-Term Liabilities		305		—			305
Total Liabilities	$	30,099	$	(816	)	$	29,283

The following table summarizes the identifiable intangible assets acquired and their weighted-average useful life at the date of acquisition.

	Fair Value		Weighted-Average Useful Life (in Years)
Customer Relationships	$	48,792		12
Trademarks		6,725		10
Content		1,319		4
Total	$	56,836

The allocation of the consideration transferred to the assets acquired and the liabilities assumed is final.

Zyante Inc.

On July 1, 2019, we completed the acquisition of Zyante Inc. (“zyBooks”), a leading provider of computer science and STEM education courseware. The results of operations of zyBooks are included in our Academic & Professional Learning segment results. The fair value of the consideration transferred at the acquisition date was $57.1 million which included $55.9 million of cash and $1.2 million of additional consideration to be paid after the acquisition date, inclusive of purchase price adjustments which were finalized in the three months ended January 31, 2020. The fair value of the cash consideration transferred after the acquisition date, that was paid during the nine months ended January 31, 2021 was $0.3 million.

zyBooks incremental revenue included in our Academic & Professional Learning segment results for the three and nine months ended January 31, 2021 was none and $1.3 million, respectively.

The allocation of the consideration transferred to the assets acquired and the liabilities assumed was final as of April 30, 2020. This included goodwill of $36.9 million allocated to the Academic & Professional Learning segment, and $24.5 million of intangible assets.

Other Acquisitions in Fiscal Year 2020

The preliminary fair value of cash consideration transferred during the year ended April 30, 2020 for all other acquisitions was approximately $48.5 million. These other acquisitions were accounted for using the acquisition method of accounting as of their respective acquisition dates.

During the nine months ended January 31, 2021, a revision of $11.7 million from goodwill to intangibles assets was made to the allocation of the consideration transferred to the assets acquired and liabilities assumed for the Informatics and Madgex acquisitions, due to additional information obtained related to the third-party valuation. The excess purchase price over identifiable net tangible and intangible assets of $16.9 million has been recorded to Goodwill on our Condensed Consolidated Statements of Financial Position as of January 31, 2021, and $39.4 million of intangible assets subject to amortization have been recorded, including customer relationships, developed technology, content and trademarks that are being amortized over estimated weighted average useful lives of 7, 8, 10, and 10 years, respectively. The fair value assessed for the majority of the tangible assets acquired and liabilities assumed equaled their carrying value. Goodwill represents synergies and economies of scale expected from the combination of services. Goodwill of $8.5 million has been allocated to the Academic & Professional Learning segment, and $8.4 million has been allocated to the Research Publishing & Platforms segment. The incremental revenue for the three and nine months ended January 31, 2021 related to these other acquisitions was approximately $4.7 million and $11.1 million, respectively.

On April 1, 2020, we completed the acquisition of Bio-Rad Laboratories Inc.’s Informatics products including the company’s spectroscopy software and spectral databases (“Informatics”). The results of Informatics are included in our Research Publishing & Platforms segment results.

On March 2, 2020, we completed the acquisition of Madgex Holdings Limited (“Madgex”), a market-leading provider of advanced job board software and career center services. The results of Madgex are included in our Research Publishing & Platforms segment results.

The allocation of the total consideration transferred to the assets acquired and the liabilities assumed for Informatics and Madgex is preliminary, and could be revised as a result of additional information obtained due to the finalization of the third-party valuation report, leases and related commitments, tax related matters and contingencies and certain assets and liabilities, including receivables and payables, but such amounts will be finalized within the measurement period, which will not exceed one year from the acquisition dates.

On May 31, 2019, we completed the acquisition of certain assets of Knewton, Inc. (“Knewton”). Knewton is a provider of affordable courseware and adaptive learning technology. The results of Knewton are included in our Academic & Professional Learning segment results. The allocation of the consideration transferred to the assets acquired and the liabilities assumed for Knewton was final as of April 30, 2020.

We also completed in fiscal year 2020 the acquisition of two immaterial businesses, which are included in our Research Publishing & Platforms segment, one immaterial business included in our Academic & Professional Learning segment results and one immaterial business in our Education Services business. The allocation of the consideration transferred to the assets acquired and the liabilities assumed for these other acquisitions was final as of October 31, 2020.