Business Combinations

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition of ProQuest

On December 1, 2021, we acquired 100% of ProQuest, a leading global software, data and analytics provider to academic, research and national institutions, and its subsidiaries from Cambridge Information Group (“CIG”), Atairos and certain other equity holders (collectively, the “Seller Group”). The aggregate consideration in connection with the closing of the ProQuest acquisition was $4,994.3, net of $52.5 cash acquired. The aggregate consideration was composed of (i) $1,094.9 from the issuance of 46.9 million ordinary shares to the Seller Group and (ii) approximately $3,951.9 in cash, including approximately $917.5 to fund the repayment of ProQuest debt.


Issuance of 46.9 million shares(1)	$	1,094.9
Cash consideration(2)	3,951.9
Total purchase price	5,046.8
Cash acquired(3)	(52.5)
Total purchase price, net of cash acquired	$	4,994.3

(1) Based on the Company’s closing share price of $23.34 on November 30, 2021.
(2) Based on the Closing Statement, total cash consideration of $3,951.9 includes a base cash consideration of $3,988.0, less working capital adjustments of $31.7, less closing indebtedness adjustments of $36.6, plus closing cash consideration of $32.2 as defined in the Transaction Agreement.
(3) Cash acquired includes $52.5 of total cash acquired, less $2.0 of restricted cash acquired as defined in the Transaction Agreement.

The excess of the purchase price over the net tangible and intangible assets is recorded to Goodwill and primarily reflects the assembled workforce and expected synergies. The majority of goodwill is deductible for tax purposes. During the three months ended March 31, 2022 and 2021, total transaction costs incurred in connection with the acquisition of ProQuest were $5.7 and $0.1, respectively. The ProQuest acquisition is reported as part of the Science Segment, see Note 18 - Segment Information for further details.

The purchase price allocation for the ProQuest acquisition as of the close date of December 1, 2021 is preliminary and may change upon completion of the determination of the fair value of assets acquired and liabilities assumed. For example, the attrition assumptions used in valuing the customer relationship intangible assets acquired are provisional. A 0.5% change in the attrition assumption used would represent a material change in the purchase price allocation. The following table summarizes the preliminary purchase price allocation for this acquisition:


	Original Purchase Price Allocation		Measurement Period Adjustments		Updated Purchase Price Allocation
Accounts receivable	$	113.5	$	1.2	$	114.7
Prepaid expenses	22.3		0.9		23.2
Other current assets	23.7		—		23.7
Property and equipment, net	62.3		3.1		65.4
Other intangible assets(1)	3,534.7		—		3,534.7
Other non-current assets	18.0		—		18.0
Deferred income taxes	3.5		—		3.5
Operating lease right-of-use assets	28.4		—		28.4
Total assets	$	3,806.4	$	5.2	$	3,811.6
Accounts payable	17.1		—		17.1
Accrued expenses and other current liabilities	136.8		(2.3)		134.5
Current portion of long-term debt	1.1		—		1.1
Current portion of deferred revenue	335.2		—		335.2
Current portion of operating lease liabilities	8.0		—		8.0
Long-term debt	33.4		—		33.4
Deferred income taxes	58.6		0.1		58.7
Non-current portion of deferred revenue	6.8		—		6.8
Other non-current liabilities	89.2		1.7		90.9
Operating lease liabilities	23.1		—		23.1
Total liabilities	709.3		(0.5)		708.8
Fair value of acquired identifiable assets and liabilities	$	3,097.1	$	5.7	$	3,102.8

Purchase price, net of cash	$	4,994.3	$	—	$	4,994.3
Less: Fair value of acquired identifiable assets and liabilities	3,097.1		5.7		3,102.8
Goodwill	$	1,897.2	$	(5.7)	$	1,891.5


(1) Of the $3,534.7, $3,528.0 relates to the valued intangible assets as per the purchase price allocation and $6.7 relates to acquired assets under construction.

The identifiable intangible assets acquired are amortized on a straight-line basis over their estimated useful lives. The following table summarizes the estimated fair value of ProQuest's identifiable intangible assets acquired and their remaining amortization period (in years):


	Fair Value as of December 1, 2021		Remaining Range of Years
Customer relationships	$	2,773.0	17-23
Technology & databases(1)	709.3		5-17
Trade names	45.7		2-10
Total identifiable intangible assets	$	3,528.0
(1) Technology and databases intangible assets include both acquired technology intangible assets and acquired databases intangible assets.

Unaudited pro forma information for the Company for the relevant periods presented as if the acquisition had occurred January 1, 2020 is as follows:


	Three Months Ended March 31,
	2021
Pro forma revenues, net	$	648.1
Pro forma net loss attributable to the Company's shareholders	(71.8)

The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisition taken place on the date indicated, or the future consolidated results of operations of the Company. The pro forma financial information presented above has been derived from the historical consolidated financial statements of the Company and from the historical accounting records of ProQuest.

The unaudited pro forma results include certain pro forma adjustments to net loss that were directly attributable to the acquisition, assuming the acquisition had occurred on January 1, 2020, including the following: (i) additional amortization expense that would have been recognized relating to the acquired intangible assets, (ii) adjustments to interest expense to reflect the removal of ProQuest debt and the additional Company borrowings in conjunction with the acquisition, and (iii) acquisition-related transaction costs which reduced expenses by $0.1 for the three months ended March 31, 2021.