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Acquisitions and Divestitures | 12 Months Ended
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Apr. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions Pro forma financial information related to this acquisition has not been provided as it is not material to our consolidated results of operations. Fiscal Year 2023 On November 1, 2022, we completed the acquisition of an immaterial business included in our Learning segment. The fair value of consideration transferred was $6.1 million, which included $5.2 million of cash at the acquisition date and $0.9 million to be paid after the acquisition date. The acquisition was accounted for using the acquisition method of accounting. We recorded the aggregate excess purchase price over identifiable net tangible and intangible assets acquired and liabilities assumed, which included an allocation of $3.9 million of goodwill allocated to the Learning segment and $3.7 million of intangible assets subject to amortization. The allocation of the total consideration transferred to the assets acquired, including intangible assets and goodwill, and the liabilities assumed was finalized during the three months ended October 31, 2023. Divestitures As part of our ongoing initiatives to simplify our portfolio to drive sustained performance improvement, we have completed certain dispositions as of April 30, 2024, and committed to a plan to divest additional businesses which are expected to be substantially completed by the second quarter of fiscal year 2025. On June 1, 2023, Wiley’s Board of Directors approved a plan to divest certain businesses that we determined are non-core businesses. Those businesses are University Services, Wiley Edge, and CrossKnowledge. In accordance with FASB ASC Topic 205, “Presentation of Financial Statements,” we determined that the planned divestitures of University Services, Wiley Edge, and CrossKnowledge each do not represent a strategic shift that will have a major effect on our consolidated results of operations, and therefore their results of operations were not reported as discontinued operations. We concluded that the businesses met all the requisite held-for-sale criteria as of June 1, 2023. Therefore, the related assets and liabilities were reclassified as of that date as held-for-sale on the Consolidated Statement of Financial Position until the date of sale. As a result of these planned divestitures, in the three months ended July 31, 2023 we reorganized our segments and our new structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). The operations of University Services, Wiley Edge, and CrossKnowledge are reported in the Held for Sale or Sold segment until the date of sale. See Note 20, “Segment Information” for more details regarding our reportable segments. See Note 1 1, “Goodwill and Intangible Assets” for more details on the interim goodwill impairment tests and the impairment charges. On January 1, 2024 we completed the sale of University Services. On January 8, 2024 we entered into an agreement to sell our Wiley Edge business, which closed on May 31, 2024, with the exception of its India operations. The sale of Wiley Edge’s India operation will be finalized later in calendar year 2024. We expect to complete the sale of CrossKnowledge by the second quarter of fiscal year 2025. As of April 30, 2024, both Wiley Edge and CrossKnowledge continue to be reported as held-for-sale. Fiscal Year 2024 University Services On January 1, 2024, we completed the sale of University Services, which was included in our Held for Sale or Sold segment, pursuant to a Membership Interest and Asset Purchase Agreement with Academic Partnerships LLC, a Delaware limited liability company (Academic Partnerships), and Education Services Upper Holdings Corp., a Delaware corporation. The selling price for University Services at the date of sale which was updated during the three months ended April 30, 2024 for an estimation of the working capital adjustment, had a fair value of $119.1 million, paid in the form of (i) an unsecured promissory note with an initial aggregate principal amount of $89.4 million (Se ller Note), subject to customary working capital adjustments; (ii) $17.8 million of additional contingent consideration in the form of an earnout recorded at fair value based on revenue targets during each of the two fiscal years in the period from May 1, 2024 through April 30, 2026 (Earnout); and (iii) a number of common units of TVG-Academic Partnerships Holdings, LLC, the ultimate parent company of Academic Partnerships equal to 10% of the total common units outstanding at the date of sale valued at $11.9 million (T VG Investment). The Seller Note, Earnout, and TVG Investment are reflected in Other non-current assets in our Consolidated Statements of Financial Position. The principal amount of the Seller Note is subject to an increase of up to approximately $12 million in the event certain third-party customer consents are obtained prior to January 1, 2025. The maximum amount of the Earnout at the end of the target periods noted above will be impacted by the third-party customer consents up to approximately $4 million. The fair value of the Earnout will be impacted by these third-party customer consents until settled. Our total common units in the TVG Investment will also increase as certain third-party customer consents are obtained. The Seller Note has a maturity date that is the earlier of (i) one year after the maturity date of Academic Partnerships’ material secured indebtedness for borrowed money and (ii) January 1, 2031. The Seller Note bears interest at the rate of 10% per annum commencing on January 2, 2024, increasing to 12% per annum on and after January 1, 2026. Interest income from the note receivable represents non operating income and is included in Other (expense) income, net on the Consolidated Statements of (Loss) Income. The maximum Earnout amount is $40 million, subject to adjustments for the third-party customer consents as noted above. We elected to record the fair value of the Earnout as of the date of the sale, and will update that fair value as applicable until settled. The fair value of the Earnout was based on a Monte Carlo simulation. This fair value was categorized as Level 3 within the ASC Topic 820 fair value hierarchy. This method considers the terms and conditions in the Membership Interest and Asset Purchase Agreement, our best estimates of forecasted revenue for the Earnout periods and simulates a range of revenues over the applicable periods based on an estimate of revenue volatility. The fair value of the Earnout was estimated as the present value of the potential range of payouts averaged across the range of simulated revenues using an estimated risk-adjusted discount rate for the simulated revenues. The Earnout amount is subject to change based on final results and calculations. Our TVG Investment will be accounted for under the cost method minus impairment. The pretax loss on sale was $107.0 million after accounting for the assets sold, liabilities transferred upon sale, and transaction costs and is included in (Losses) gains on sale of businesses and certain assets and impairment charges related to assets held-for-sale in our Consolidated Statements of (Loss) Income for the year ended April 30, 2024. The loss was updated during the three months ended April 30, 2024 due to an estimation of the working capital adjustment and the disposal of certain customers asset and liability balances. In connection with the held-for-sale classification, we recognized cumulative impairment charges of $75.4 million on the remeasurement of the disposal group at the lower of carrying value or fair value less costs to sell. Upon the completion of the sale, we recognized an additional loss of $31.6 million due to subsequent changes in the fair value less costs to sell, as well as changes in the carrying amount of the disposal group. We entered into a transition services agreement (TSA) to facilitate the transition of the divested business. Tuition Manager On May 31, 2023, we completed the sale of our tuition manager business (Tuition Manager), which was included in our Held for Sale or Sold segment. The divestiture did not represent a strategic shift that would have a major effect on our consolidated results of operations, and therefore its results of operations were not reported as discontinued operations. The cash received net of transaction costs at the date of sale was $0.5 million, and $0.5 million of additional cash was received after the date of sale. The pretax loss on sale was $1.5 million after accounting for the assets sold, liabilities transferred upon sale, and transaction costs and is included in (Losses) gains on sale of businesses and certain assets and impairment charges related to assets held-for-sale in our Consolidated Statements of (Loss) Income for the year ended April 30, 2024. The carrying value of the net assets included in the pretax loss on sale was $2.5 million, including intangible assets of $1.0 million and no goodwill. Fiscal Year 2023 Test Prep and Advancement Courses On February 28, 2023, we completed the sale of Wiley’s Efficient Learning test prep portfolio business. In addition, on March 31, 2023, we completed the sale of our advancement courses business. Both were included in our Held for Sale or Sold segment. Neither disposition constituted a strategic shift, and the impact on our overall operations and financial results was not material. Accordingly, the operations associated with the dispositions are not reported in discontinued operations. The selling price for both dispositions was $16.5 million, which included $15.5 million of cash received net of transaction costs at the date of disposition, and $1.0 million to be received after the disposition date. The pretax gain on sale was $10.2 million, after accounting for the assets sold, liabilities transferred upon sale, and transaction costs and is included in (Losses) gains on sale of businesses and certain assets and impairment charges related to assets held-for-sale in our Consolidated Statements of (Loss) Income for the year ended April 30, 2023. As a result of the closing of the transactions, we derecognized net assets of $6.4 million, including goodwill of $5.3 million and intangible assets of $2.4 million. Assets and Liabilities Held-for-Sale As of April 30, 2024, Wiley Edge and CrossKnowledge continue to be reported as held-for-sale. We measured each disposal group at the lower of carrying value or fair value less costs to sell. The determination of the fair value less costs to sell is based on the indicative sales values and includes value associated with contingent consideration to be received in the form of an earnout for Wiley Edge. This fair value was categorized as Level 3 within the ASC Topic 820 fair value hierarchy. In the year ended April 30, 2024, we recorded held-for-sale pretax noncash impairment charges of $74.8 million. The total impairment charge for Wiley Edge in the year ended April 30, 2024 was $19.4 million. The total impairment charge for CrossKnowledge in the year ended April 30, 2024 was $55.4 million. The pretax noncash impairment charges are reflected in (Losses) gains on sale of businesses and certain assets and impairment charges related to assets held-for-sale on the Consolidated Statements of (Loss) Income for the year ended April 30, 2024. The impairments are included as a valuation allowance or contra-asset account within Current assets held-for-sale and Non-current assets held-for-sale on the Consolidated Statement of Financial Position as of April 30, 2024. The major categories of assets and liabilities that have been classified as held-for-sale on the Consolidated Statement of Financial Position as of April 30, 2024 were as follows:
| Cross Knowledge |  | Wiley Edge |  | Total
Assets held-for-sale: |  |  |  |  |
Current assets |  |  |  |  |
Cash and cash equivalents (1) | $ | 6,305 |  |  | $ | 9,887 |  |  | $ | 16,192 |
Accounts receivable, net | 12,914 |  |  | 13,897 |  |  | 26,811 |
Prepaid expenses and other current assets (1) | 3,780 |  |  | 5,548 |  |  | 9,328 |
Valuation allowance | (17,909) |  |  | — |  |  | (17,909) |
Total current assets held-for-sale | $ | 5,090 |  |  | $ | 29,332 |  |  | $ | 34,422 |
Technology, property and equipment, net | 3,786 |  |  | 2,888 |  |  | 6,674 |
Intangible assets, net | 17,777 |  |  | 34,612 |  |  | 52,389 |
Operating lease right-of-use assets | 1,091 |  |  | 1,008 |  |  | 2,099 |
Other non-current assets | 14,877 |  |  | 53 |  |  | 14,930 |
Valuation allowance | (37,531) |  |  | (19,401) |  |  | (56,932) |
Total non-current assets held-for-sale | $ | — |  |  | $ | 19,160 |  |  | $ | 19,160 |
Liabilities held-for-sale: |  |  |  |  |
Current liabilities |  |  |  |  |
Accounts payable | $ | 494 |  |  | $ | — |  |  | $ | 494 |
Accrued royalties | 268 |  |  | — |  |  | 268 |
Contract liabilities | 16,796 |  |  | — |  |  | 16,796 |
Accrued employment costs | 7,805 |  |  | 3,990 |  |  | 11,795 |
Short-term portion of operating lease liabilities | 319 |  |  | 468 |  |  | 787 |
Other accrued liabilities | 2,762 |  |  | 4,730 |  |  | 7,492 |
Total current liabilities held-for-sale | $ | 28,444 |  |  | $ | 9,188 |  |  | $ | 37,632 |
Accrued pension liability | 1,037 |  |  | — |  |  | 1,037 |
Deferred income tax liabilities | 4,420 |  |  | 4,448 |  |  | 8,868 |
Operating lease liabilities | 251 |  |  | 159 |  |  | 410 |
Other long-term liabilities | 694 |  |  | 228 |  |  | 922 |
Total long-term liabilities held-for-sale | $ | 6,402 |  |  | $ | 4,835 |  |  | $ | 11,237 |
(1) | The following table shows a reconciliation of our cash, cash equivalents, and restricted cash included in current assets held-for-sale in our Consolidated Statement of Financial Position to our Consolidated Statement of Cash Flows for the year ended April 30, 2024:
Cash and cash equivalents | $ | 83,249 |
Restricted cash included in Prepaid expenses and other current assets | 50 |
Total cash, cash equivalents, and restricted cash per Consolidated Statement of Financial Position as of April 30, 2024 | 83,299 |
Cash and cash equivalents held-for-sale | 16,192 |
Restricted cash held-for-sale included in Prepaid expenses and other current assets | 52 |
Total cash, cash equivalents, and restricted cash held-for-sale as of April 30, 2024 | 16,244 |
Total cash, cash equivalents, and restricted cash per Consolidated Statement of Cash Flows for the year ended April 30, 2024 | $ | 99,543 |
On January 8, 2024, we entered into a stock and asset purchase agreement (Purchase Agreement) with Inspirit Vulcan Bidco Limited, a private limited company incorporated in England & Wales (Inspirit), pursuant to which we agreed to sell our emerging talent and reskill training business, Wiley Edge (Business), to Inspirit (Transaction). We closed on the Transaction on May 31, 2024, with the exception of our India operation. The sale of Wiley Edge’s India operation will be finalized later in calendar year 2024. The results of Wiley Edge will continue to be reported in our operating results in the Held for Sale or Sold segment until the date of sale. We entered into a TSA to facilitate the transition of the divested business.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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