Dispositions

9 Months Ended

Sep. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Dispositions

Dispositions

Honduras Divestiture

On March 8, 2021, the Company completed the divestiture of its operations in Honduras to Fundación Nasser, a not-for-profit foundation in Honduras. In connection with the transaction, the Company transferred control of Fundaempresa, which manages Universidad Tecnológica Centroamericana (UNITEC), including Centro Universitario Tecnológico (CEUTEC). The proceeds received, net of cash sold, closing costs and a working capital adjustment that was completed during the second quarter of 2021, were approximately $24,000. Under the transaction terms, additional consideration of $2,000 was paid into an escrow account at closing and, assuming certain conditions are met, will be released to the Company based on the following schedule: 50% after 18 months, 25% after 24 months and 25% after 36 months. The Company recognized a pre-tax loss of approximately $1,700, which is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the nine months ended September 30, 2021.

Receipt of Remaining Escrow Receivable from Sale of China Operations

On January 25, 2018, the Company completed the sale of LEI Lie Ying Limited in China. At the closing of the sale on January 25, 2018, a portion of the total transaction value was paid into an escrow account, to be distributed to the Company pursuant to the terms and conditions of the escrow agreement. In June 2020, the Company received approximately one-half of the escrow account, and the remainder was due in January 2021. In April 2021, the Company received 168,284 Hong Kong Dollars (approximately $21,650 at the date of receipt), which represented payment in full for the remainder of the escrow account. Accordingly, the Company recognized a gain of approximately $13,600, which is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the nine months ended September 30, 2021.

Brazil Divestiture

On May 28, 2021, the Company completed the sale of its operations in Brazil to Ânima Holding S.A. (Anima). The proceeds received, net of cash sold, transaction fees and settlement of foreign currency swaps, were approximately $625,500. The Company used a portion of the proceeds to repay the remaining balance outstanding under its Senior Notes due 2025. Additionally, the buyer assumed indebtedness, gross of cash sold, of approximately $121,000. The Company recognized a pre-tax gain on the sale of approximately $26,100, which included a working capital adjustment that was completed during the third quarter of 2021. This gain is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the nine months ended September 30, 2021.

Walden Divestiture

On August 12, 2021, the Company closed the previously disclosed transaction pursuant to the Membership Interest Purchase Agreement (the Walden Purchase Agreement), dated September 11, 2020, with Adtalem Global Education Inc., a Delaware corporation (the Walden Purchaser). Pursuant to the Walden Purchase Agreement, the Company sold to the Walden Purchaser all of the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (Walden), and its subsidiary, Walden University, LLC, a Florida limited liability company and an indirect wholly owned subsidiary of the Company (together with Walden, the Walden Group).

The proceeds received, net of cash sold, transaction fees, and certain closing adjustments, were approximately $1,397,200. At closing, the Company also recorded a receivable of $74,000, representing the portion of the transaction value that was paid into an escrow account, to be released to the Company one year following the closing of the transaction pursuant to the terms and conditions of the escrow agreement. In addition, approximately $83,600 of restricted cash on the Company's balance sheet related to collateralized regulatory obligations is expected to be released within the next twelve months. The Company recognized a pre-tax gain on the sale of approximately $615,200, as well as estimated tax expense of approximately $278,000, which is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the three and nine months ended September 30, 2021.

Collection of Note Receivable from Divestiture of Chilean Operations

On September 10, 2020, the Company completed the divestiture of its operations in Chile. Under the terms of the agreement, the purchase price included a note receivable of $21,500 that was payable one year from the date of divestiture. In September 2021, the Company collected this receivable.