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Merger with Capella Education Company
6 Months Ended
Jun. 30, 2018
Merger with Capella Education Company [Abstract]  
Merger with Capella Education Company

2.    Merger with Capella Education Company

 

On October 29, 2017, the Company entered into a merger agreement with Capella Education Company (“Capella”). Capella provides post-secondary education and job-skills programs primarily through its subsidiary Capella University. The merger was approved by the Company’s stockholders and by Capella’s shareholders on January 19, 2018. Upon consummation of the merger, Capella became a wholly-owned subsidiary of the Company and will continue to offer its education programs through Capella University.

 

Pursuant to the merger, the Company issued 0.875 shares of the Company’s Common Stock for each issued and outstanding share of Capella Common Stock. Outstanding equity awards held by current Capella employees and certain non-employee directors of Capella were assumed by the Company and converted into comparable Company awards at the exchange ratio. Outstanding equity awards held by Capella non-employee directors who will not serve as directors of the Company after completion of the merger and by former Capella employees were settled upon completion of the merger in exchange for cash payments as specified in the merger agreement. Following the merger, stockholders of the Company and Capella own approximately 52% and 48%, respectively, of the outstanding combined company shares on a fully diluted basis, based on the number of shares outstanding immediately prior to the effective time of the merger.

 

Also, in connection with the completion of the merger, and as approved by the Company’s shareholders on January 19, 2018, the Company changed its name to Strategic Education, Inc. and increased the number of shares of authorized Common Stock to 32,000,000. The merger was completed on August 1, 2018.

 

During the three and six months ended June 30, 2018, the Company incurred $2.8 million and $8.2 million of merger costs, respectively. These costs were primarily attributable to legal, accounting, and integration support services incurred by the Company in connection with the merger, and are included in merger costs in the accompanying unaudited condensed consolidated statement of income for the three and six months ended June 30, 2018.