
	Acquisitions

Jencal Training

On March 1, 2016, we acquired the share capital of Jencal Training Limited (Jencal Training) and its subsidiary B2B Engage Limited (B2B), an independent provider of vocational skills training in the United Kingdom. The upfront purchase price was $2.7 million in cash and is subject to a working capital adjustment which we expect will be finalized and agreed upon with the sellers in the second quarter of 2016. In addition, the purchase agreement requires up to an additional $0.4 million of consideration, contingent upon attaining incremental funding levels under a customer contract prior to July 31, 2016. The preliminary purchase price allocation for the acquisition primarily includes $1.4 million of customer-related intangible assets which are being amortized over four years from the acquisition date and $1.7 million of goodwill. None of the goodwill recorded for financial statement purposes is deductible for tax purposes. The acquired Jencal Training business is included in the Learning Solutions segment and the results of its operations have been included in the consolidated financial statements beginning March 1, 2016. The pro-forma impact of the acquisition is not material to our results of operations.

Contingent Consideration

Accounting Standards Codification (“ASC”) Topic 805 requires that contingent consideration be recognized at fair value on the acquisition date and be re-measured each reporting period with subsequent adjustments recognized in the consolidated statement of operations. We estimate the fair value of contingent consideration liabilities based on financial projections of the acquired companies and estimated probabilities of achievement and discount the liabilities to present value using a weighted-average cost of capital. Contingent consideration is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. We believe our estimates and assumptions are reasonable; however, there is significant judgment involved. At each reporting date, the contingent consideration obligation is revalued to estimated fair value, and changes in fair value subsequent to the acquisitions are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to, and volatility in, our operating results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods, changes in the timing and amount of revenue and/or earnings estimates and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria.

Below is a summary of the potential maximum contingent consideration we may be required to pay in connection with completed acquisitions during 2016 as of March 31, 2016 (dollars in thousands):



	Original range	Maximum payments due in
	of potential undiscounted	Maximum payments due in
Acquisition:	payments	2016
Jencal Training	$0 - $429	$	429
Effective Companies	$0 - $5,280	$	2,640

Below is a summary of the changes in the recorded amount of contingent consideration liabilities from December 31, 2015 to March 31, 2016 (dollars in thousands):



	Liability as of December 31,		Additions		Change in Fair Value of Contingent		Foreign Currency		Liability as of March 31,
Acquisition:	2015		(Payments)		Consideration		Translation		2016
Jencal Training	$	—	$	294	$	—	$	9	$	303
Effective Companies	2,381		—		159		100		2,640
Total	$	2,381	$	294	$	159	$	109	$	2,943

As of March 31, 2016 and December 31, 2015, contingent consideration is considered a current liability and is included in accounts payable of $2.9 million and $2.4 million, respectively.