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Business Combinations | 3 Months Ended
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Mar. 31, 2023
Business Combinations [Abstract] |
Business Combinations | Note 8. Business Combinations Cohort Go On July 13, 2022, Flywire acquired all of the issued and outstanding shares of Cohort Go, an Australian-based education payments provider that simplifies the student recruitment process by bringing together students, agents and essential student services such as health insurance into one platform. The acquisition of Cohort Go contributed to the Company's global expansion and accelerated the growth of Flywire's agent related revenue, in which Flywire partners with agents who refer students to the Company. The agent related revenue is reported as transaction revenue for Flywire, while the health insurance related revenue is reported as platform revenue. The acquisition of Cohort Go has been accounted for as a business combination. During the fourth quarter of 2022, the cash consideration, net of cash acquired and the purchase price allocation was adjusted to reflect a working capital true-up and a change to the deferred tax liability, which was due to additional tax basis associated with the acquired technology intangible asset. This resulted in a $0.2 million increase in the cash consideration, net of cash acquired, a $1.4 million decrease to deferred tax liability and a $1.2 million decrease to goodwill from the quarter ended September 30, 2022 to the year ended December 31, 2022. The adjusted purchase price allocation is reflected in the condensed consolidated balance sheet as of March 31, 2023 and purchase price allocation below. Pursuant to the terms of the business combination agreement, the Company acquired Cohort Go for estimated total purchase consideration of $33.0 million or $23.1 million, net of cash acquired, which consisted of (in thousands):
Cash consideration, net of cash acquired |  | $ | 17,140 |
Estimated fair value of shares of common stock |  |  | 4,287 |
Estimated fair value of contingent consideration |  |  | 1,695 |
Total purchase consideration, net of cash acquired |  | $ | 23,122 |
Contingent consideration, which totaled up to $1.7 million represented additional payments that Flywire was required to make which was dependent upon Cohort Go's achievement of specific post-acquisition milestones and was subject to exchange rate fluctuation adjustment between the U.S. Dollar and Australian Dollar. During March 2023, the Company made a payment of contingent consideration in the amount of $1.7 million, in the form of cash, based on Cohort Go's successful and timely achievement of the contracted milestones. No additional contingent consideration is due or payable with respect to the Cohort Go acquisition. The table summarizes the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed (in thousands):
Cash |  | $ | 9,880 |
Accounts receivable |  |  | 558 |
Funds receivable from payment partners |  |  | 3,767 |
Prepaid expenses and other current assets |  |  | 314 |
Other assets |  |  | 494 |
Goodwill |  |  | 16,197 |
Identifiable intangible assets |  |  | 16,408 |
Total assets acquired |  |  | 47,618 |
Deferred tax liabilities |  |  | 5,012 |
Deferred revenue |  |  | 264 |
Funds payable to clients |  |  | 4,071 |
Accounts payable |  |  | 1,740 |
Accrued expenses and other current liabilities |  |  | 3,529 |
Total liabilities assumed |  |  | 14,616 |
Net assets acquired |  |  | 33,002 |
Less: cash acquired |  |  | 9,880 |
Net assets, less cash acquired |  | $ | 23,122 |
Goodwill arising from the acquisition of $16.2 million was attributable to the assembled workforce of Cohort Go and the synergies expected to arise from the acquisition. The Company expects that no goodwill from this acquisition will be deductible for income tax purposes. The following table reflects the estimated fair values of the identified intangible assets of Cohort Go and their respective weighted-average estimated amortization periods.
|  | Estimated Fair Values |  |  | Weighted- Average Estimated Amortization Periods |
|  | (in thousands) |  |  | (years) |
Developed technology |  | $ | 5,356 |  |  |  | 7 |
Agent and customer relationships |  |  | 11,052 |  |  |  | 13 |
|  | $ | 16,408 |  |  |  |
The results of Cohort Go have been included in the condensed consolidated financial statements since the date of the acquisition. Cohort Go contributed $3.5 million in transaction revenue and $2.5 million in platform revenue during the three months ended March 31, 2023. The Company has not disclosed net income or loss since the acquisition date as the business was fully integrated into the consolidated Company’s operations and therefore it was impracticable to determine this amount. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information shows the results of the Company’s operations for the three months ended March 31, 2022 as if the acquisition had occurred on January 1, 2021. The unaudited pro forma financial information is presented for information purposes only and is not necessarily indicative of what would have occurred if the acquisition had occurred as of that date. The unaudited pro forma information is also not intended to be a projection of future results due to the integration of the acquired operations of Cohort Go. The unaudited pro forma information reflects the effects of applying the Company’s accounting policies and a pro forma adjustment to the combined historical financial information of the Company and Cohort Go, which includes incremental amortization expense associated with the estimated fair value of identified intangible assets.
|  | Three Months Ended March 31, 2022 |
|  | Actual |  |  | Pro Forma |
|  | (in thousands) |
Revenue |  | $ | 64,553 |  |  | $ | 70,217 |
Net Loss |  | $ | (10,149 | ) |  | $ | (9,373 | )

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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- References No definition available. + Details
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