Acquisitions

12 Months Ended

Apr. 30, 2022

Note 4 – 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 2022

XYZ Media

On December 29, 2021, we completed the acquisition of certain assets of XYZ Media Inc. (XYZ Media). XYZ Media is a company that generates leads for higher education institutions. The results of XYZ Media are included in our Education Services segment results. The fair value of consideration transferred at the date of acquisition was $45.4 million, which included $38.0 million of cash and approximately 129 thousand shares of Wiley Class A common stock, or approximately $7.4 million. We financed the payment of the cash consideration with a combination of cash on hand and borrowings under our Amended and Restated RCA (as defined below in Note 14, “Debt and Available Credit Facilities”).

The XYZ Media acquisition was accounted for using the acquisition method of accounting. The preliminary excess purchase price over identifiable net tangible and intangible assets acquired, and liabilities assumed, has been recorded to Goodwill in our 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. The goodwill will be deductible for tax purposes. The acquisition related costs to acquire XYZ Media were expensed when incurred and were approximately $0.1 million for the year ended April 30, 2022. Such costs were allocated to the Education Services segment and are reflected in Operating and administrative expenses on the Consolidated Statements of Net Income (Loss) for the year ended April 30, 2022.

XYZ Media’s revenue and operating loss included in our Education Services segment results for the year ended April 30, 2022 was $3.6 million and $(1.5) million, respectively.

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

	Preliminary Allocation
Total consideration transferred	$	45,363

Assets:
Current assets		913
Intangible assets, net		22,711
Goodwill		22,226
Other non-current assets		46
Total assets	$	45,896

Liabilities:
Current liabilities		533
Total liabilities	$	533

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

	Estimated Fair Value		Weighted-Average Useful Life (in Years)
Developed technology	$	20,930		7
Customer relationships		1,340		6
Covenants not to compete		323		5
Tradename		118		1
Total	$	22,711

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.

Other Acquisitions in Fiscal Year 2022

On November 30, 2021, we acquired the assets of the eJournalPress (EJP) business from Precision Computer Works, Inc. EJP is a technology platform company with an established journal submission and peer review management system. The results of EJP are included in our Research Publishing & Platforms segment results.

On October 1, 2021, we completed the acquisition of certain assets of J&J Editorial Services, LLC. (J&J). J&J is a publishing services company providing expert offerings in editorial operations, production, copyediting, system support, and consulting. The results of J&J are included in our Research Publishing & Platforms segment results.

We also completed in the year ended April 30, 2022 the acquisition of two immaterial businesses included in our Research Publishing & Platforms segment and the acquisition of one immaterial business in our Education Services segment.

The aggregate preliminary fair value of consideration transferred for these other acquisitions was approximately $41.2 million during the year ended April 30, 2022, which included $36.2 million of cash paid at the acquisition dates and $5.0 million of additional cash to be paid after the acquisition dates. The fair value of the cash consideration transferred, net of $1.2 million of cash acquired was approximately $34.9 million. These other acquisitions were accounted for using the acquisition method of accounting as of their respective acquisition dates.

Associated with these other acquisitions, the preliminary aggregate excess purchase price over identifiable net tangible and intangible assets acquired, and liabilities assumed of $24.8 million has been recorded to Goodwill on our Consolidated Statements of Financial Position as of April 30, 2022 and $15.6 million of intangible assets subject to amortization have been recorded, including developed technology, customer relationships, trademarks, covenants not to compete, and content that is being amortized over preliminary estimated weighted-average useful lives of 4, 8, 2, 4, and 4 years, respectively. The fair value assessed for the majority of the tangible assets acquired and liabilities assumed approximated their carrying value. Goodwill represents synergies and economies of scale expected from the combination of services. Goodwill of $24.8 million has been allocated to the Research Publishing & Platforms segment and none has been allocated to the Education Services segment. Approximately $18.7 million of the goodwill will be deductible for tax purposes, and $6.1 million will not be deductible for tax purposes. The incremental revenue for the year ended April 30, 2022 related to these other acquisitions was approximately $8.1 million. The aggregate acquisition related costs to acquire these other acquisitions was expensed when incurred and was approximately $0.5 million for the year ended April 30, 2022.

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 reports, 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.

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 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 14, “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 excess purchase price over identifiable net tangible and intangible assets acquired, and liabilities assumed, has been recorded to Goodwill in our Consolidated Statements of Financial Position. 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 Hindawi were expensed when incurred and were approximately $2.4 million for the year ended April 30, 2021. Such costs were allocated to the Research Publishing & Platforms segment and are reflected in Operating and administrative expenses on the Consolidated Statements of Income (Loss) for the year ended April 30, 2021.

Hindawi’s incremental revenue and operating income included in our Research Publishing & Platforms segment results for the year ended April 30, 2022 was $34.6 million and $8.0 million, respectively. Hindawi’s revenue and operating loss included in our Research Publishing & Platforms segment results for the year ended April 30, 2021 was $12.0 million and $(2.1) million, respectively.

During the year ended April 20, 2022, no revisions were made to the allocation of the consideration transferred to the assets acquired and liabilities assumed. The following table summarizes the consideration transferred to acquire Hindawi and the final allocation of the purchase price among the assets acquired and liabilities assumed.

	Final Allocation
Total consideration transferred	$	300,086

Assets:
Current assets		2,812
Technology, property and equipment, net		844
Intangible assets, net		194,900
Goodwill		147,388
Operating lease right-of-use assets		3,762
Other non-current assets		69
Total assets	$	349,775

Liabilities:
Current liabilities		3,594
Deferred income tax liabilities		37,031
Operating lease liabilities		3,150
Other long-term liabilities		5,914
Total liabilities	$	49,689

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)
Content and publishing rights	$	188,500		15
Developed technology		5,000		6
Trademarks		1,000		2
Customer relationships		400		10
Total	$	194,900

The allocation of the consideration transferred to the assets acquired and the liabilities assumed was finalized during the three months ended January 31, 2022.