Acquisitions and Dispositions of Businesses

3 Months Ended

Mar. 31, 2025

Acquisitions And Dispositions [Abstract]

Acquisitions and Dispositions of Businesses

ACQUISITIONS AND DISPOSITIONS OF BUSINESSES

Acquisitions. During 2024, the Company acquired two small businesses. The assets and liabilities of the companies acquired were recorded at their estimated fair values at the date of acquisition.

In January 2024, the Company acquired one small business which is included in other businesses.

In May 2024, Kaplan acquired one small business which is included in its international division.

Acquisition-related costs for acquisitions that closed during the first three months of 2024 were expensed as incurred.

Disposition of Businesses. In March 2025, World of Good Brands (WGB) completed the sale of a small business, which was included in other businesses.

In June and September 2024, WGB completed the sales of small businesses. In July 2024, Kaplan completed the sale of a small business, Red Marker, which was included in Kaplan International.

During the first quarter of 2025, Kaplan initiated the sale of a small business, BridgeU Limited (BridgeU), which is included in Kaplan International. As a result, the Company classified BridgeU’s assets and liabilities as held for sale in the Company’s Condensed Consolidated Balance Sheet as of March 31, 2025. The held for sale assets and liabilities consist of $1.7 million of current assets (included in Other current assets), $2.8 million of noncurrent assets (included in Deferred Charges and Other Assets), $0.6 million of current liabilities (included in Accounts payable, vehicle floor plan payable and accrued liabilities), and $2.2 million of noncurrent liabilities (included in Other Liabilities). The sale closed in April 2025.

Other Transactions. On February 25, 2025, the Company and a group of minority shareholders entered into an agreement to settle a significant portion of the mandatorily redeemable noncontrolling interest related to GHC One LLC (GHC One), including CSI Pharmacy Holding Company, LLC (CSI), for a total of $205 million, which consisted of approximately $186.25 million in cash and $18.75 million in Graham Holdings Company Class B common stock.

The settlement agreement resulted in a $66.2 million increase to the mandatorily redeemable noncontrolling interest obligation, which the Company recorded as interest expense in the first quarter of 2025. The remaining mandatorily redeemable noncontrolling interest obligation related to GHC One and GHC Two LLC (GHC Two) was $20.7 million at March 31, 2025, with $8.4 million included in current liabilities due to the expected dissolution of GHC One by March 31, 2026.

In December 2024, the Company acquired some of the minority-owned shares of CSI for a total estimated amount of $2.0 million. The Company paid cash of $0.6 million and entered into a promissory note with the minority owner for the remaining $1.4 million at an interest rate of 5.5% per annum. The note is included in other indebtedness (see Note 7) and is due and payable on January 31, 2026. Following the redemption, the Company owns 87.5% of CSI.

As of March 31, 2025, the Company holds a controlling financial interest in GHC One and GHC Two and therefore includes the assets, liabilities, results of operations and cash flows in its consolidated financial statements. GHC One acquired Clarus during 2019. GHC Two acquired Impact Medical during 2021 and Skin Clique and Surpass in 2022. The Company accounts for the minority ownership of the group of senior managers in GHC One and GHC Two as a mandatorily redeemable noncontrolling interest (see Note 8).